Professional Practice (Contract Managment)

 

A.  PAM CONTRACT 2006 (WITH QUANTITIES)  PAM CONTRACT 2006 CLS.

CONDITIONS OF CONTRACT

2.0 

ARCHITECT’S INSTRUCTION  INSTRUCTION (‘AI’) (‘AI’)  

2.1

Contractor to comply with AI

The Contractor shall comply the AI issue to him in relate to any matters where Architect has the authority to issue such instructions under the Contract. The word ‘comply’ does not mean that any AI issue to Contractor, he shall carry out immediately. If there is any unclear instruction issued under AI, Contractor shall write the query to Architect. Architect can delegate his power to others so long as Architect provides written instruction and cite the clause. However, this does not mean that Architect has the right to simply delegate to any person. The person who Architect delegate to shall  be a Professional Architect.

2.2

AI

All instructions or other form of written instructions for example drawings issued  by Architect Archite ct shall valid as “A “Arch rchitect’s itect’s Instruction” (‘AI’) which Contractor has to comply when, (1)  Contractor written a ‘Confirmation of Architect’s Instruction (CAI)’ to Architect on the drawing ;and (2)  Architect upon confirmation of his own other form of written instruction issue an AI to Contractor. Others recorded instructions during site meeting or any task order letter are not as valid instructions under PAM 2006. In PAM 2006 Clause 2.2, there is no longer oral instruction as this is provided in Clause 2.5 of PAM 1998. For example, if Contractor comply comp ly Architect’s draft written instruction on a piece of paper without issue CAI to Architect and Architect confirm with his own written form of instruction by issued an AI, it is deemed as Contractor’s fault. In this case, Contractor is not entitled to Extension of time (EOT) and Loss and/or Expense (L/E). Contractor shall bear his own cost and time.

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2.3

Provisions empowering instructions

If there is any issue given in Architect’s written instructions, Contractor shall raise query to the Architect within the period of compliance. For example, if clause number is missing or wrongfully stated in AI, Contractor shall request to Architect to specify the clause issued under AI. The instruction shall assume has  been given under such provisions or rightful clause if Contractor without requests Architect to specify in writing in case there is any ambiguity in the AI given. For example, Architect Jason issued an AI for variation work, however, the clause stated in the AI is clause 23 (Extension Of Time). If Contractor comply without questioning the query, then the AI is deemed given under the right clause. The Contractor has no obligation to comply any instruction until the Architect has satisfactorily responded to the request and which empowering under the  provision. However, when the Architect has delay in giving the answer upon Contractor’s request, the Contractor is entitle for Extension of Time (EOT)  and Loss or/and Expense under Clause 23.8 (e) and Clause 24.3 (a) respectively if Contractor submit his application in sufficient time before the commencement of affected works so that the Architect manage to issue the AI without delay the  progress of works. 2.4

Failure of Contractor to comply with AI

If Contractor fails to comply within 7 days from AI issued, the Employer may employ others to ‘execute ‘execute any works which may be necessary to give effect to  such instructions’. instructions’. The Employer can pay the third party (other Contractor or other person who is deemed fit) to carry out of the said Works. The cost shall be set-off by the Employer. In case the Employer has set-off unnecessary fees from Contractor, the Contractor is entitled to raise the issue provided that he has enough evidence to prove it such as preparing estimation on the work which including quotation. Under clause 2.4, case law required Employer through Architect write to Contractor if the Contractor does not comply within 7 days upon AI issued. The notice shall state the intention of Employer employ other person to carry out of the works and the cost that will be incurred. However, if the Contractor still refused to carry out the AI issued within 7 days upon receipt of the written notice, then Employer may employ and pay other person to carry out of the AI.

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PWD FORM 203A (2010) 5.0 

S.O.’S INSTRUCTION

5.1

Similar provision as PAM 2006 Clause 2.1. S.O. usually is a senior officer from government technical agency, however in PAM 2006 where the Contract Administrator must be a registered Architect (principal submitting person). However in PWD, the S.O. is the Contract Administrator who entitled to issue instruction but S.O. right to make decision is up to certain limit as stated in clause 4 of PWD.  PWD. 

5.2

Similar provision as PAM 2006 clause 2.2. The different is whenever S.O. given oral instruction to Contractor, S.O. shall issue a written instruction within 7 days after the issuance of the oral instruction. The Contractor shall not commence the works based on oral instruction until he has received the written instruction from S.O.. The Contractor has the rights not to start the works due to merely oral instruction given.

5.3

Similar provision as PAM 2006 clause 2.4.

5.4

Similar provision as PAM 2006 clause 2.4. In fact, under PWD provides on-cost charges. On-cost charges are calculated by applying the percentage stated in appendix to the amount incurred which is 5% or 10%. For example, Contractor commences the work without insurance then the Government acts on behalf to  purchase it. Therefore the on-cost charges consist of insurance cost, a percentage stated in appendix to the amount incurred and other expenses such as travelling cost.

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PAM SUB-CONTRACT 2006 5.0 

ARCHITECT’S INSTRUCTION  INSTRUCTION (‘AI’) (‘AI’)  

5.1

AI and CAI

Similar provision as PAM 2006 clause 2.2, but the instruction given to SubContractor can be issued by Contractor or Architect with the consent of Contractor. 5.2

Consent by Contractor for Architect to issue AI directly to Sub-Contractor Sub-Contra ctor

Similar provision as PAM 2006 clause 2.2, but the contractual relationship in Sub-contract is between the main Contractor and Sub-Contractor. The Contractor may request in writing to the Architect to issue a written instruction to Sub-Contractor in order for Sub-Contractor to commence his works. However, the Contractor also can request Architect to issue instruction directly to Sub-Contractor within reasonable time provided that the Architect will issue further copy to the Contractor.

5.3

Provisions empowering instructions

Similar provision to PAM 2006 clause 2.3, but the difference is Sub-Contractor make a request to Contractor to confirm the empowerment of Architect in issuance of such instructions.

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A.  PAM CONTRACT 2006 (WITH QUANTITIES)  PAM CONTRACT 2006 CLS.

CONDITIONS OF CONTRACT

10.0 

SITE STAFF

10.1

Duty of Site Staff

Clause 10.1 entitles the Employer from time to time to appoint such number of Site Staff when the Employer feels that it is necessary. The Employer is not required to appoint Site Staff at one time. The number of Site Staff employed depends on the size and complexity of the project. The larger the project, the more the site staff to be employed. employed. Resident architect or resident engineer may work as a Site Staff. The Site Staff work under the direction of the Architect but not the Employer, although they are employed and paid by the Employer. In contract, the Site Staff inspect work on behalf of Architect, in practice they work for all consultants. For instance, if the Quantity Surveyor missed out something to measure during site valuation, he can ask the Site Staff to measure for him. Besides, Contractor is obliged to provide reasonable facilities for the Site Staff to carry out inspection. For example, if the Site Staff requires cat ladder to climb up to second floor for inspection, the Contractor shall provide it. However, if the Contractor does not provide the facilities, Employer may provide on behalf of the Contractor and the costs of providing the facilities will deduct from the next  payment given to the Contractor. Contractor.

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10.2

Directions given by Site Staff

Site Staff are permitted to issue directions to the Contractor. However the directions have no effect and can be ignored by the Contractor unless the direction is given in writing, in other words it shall not be oral direction. Besides, the Site Staff shall also get a written permission from Architect to issue such direction. If the Architect fails to issue the express authorisation, the Contractor can choose not to comply any direction given by the Site Staff. There are also restrictions on the issuance of directions. All direction given by the Site Staff if involving a variation shall have no effect unless confirmed by the Architect in the form of an instruction. For example, if the Site Staff found out that the type of wall tiles is not complying the specification in the contract, he wrote a letter to the Contractor suggesting him to change the wall tiles, the Contractor may refuse to change unless there is an Architect’s Instruction (AI) instructing the Contractor to change the wall tiles in written.

PWD FORM 203A (2010) 3.0

THE S.O. AND S.O.’s REPRESENTATIVE  REPRESENTATIVE 

3.2

S.O.’s Representative  Representative 

PWD Form 203A does not have the provision for Site Staff. Yet the S.O.’s representative mentioned in Clause 3.2 has the similar role as Site Staff. The S.O.’s representatives include the Engineers, Quantity Surveyor, Landscape Architect, Interior Designer etc. The S.O.’s representatives do the same inspection work as Site Staff.

PAM SUB-CONTRACT 2006

PAM SUB-CONTRACT 2006 does not have this provision.

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A)  PAM CONTRACT 2006 (WITH QUANTITIES) (Cont’d)  PAM CONTRACT 2006 CLS.

CONDITIONS OF CONTRACT

15.0

PRACTICAL COMPLETION AND DEFECTS LIABILITY

15.1

Practical Practical Completion

Practical Completion means in the opinion of Architect, Employer can have full use of the works for their intended purposes despite of minor works and/or defects pending completion and/or rectification by the Contractor within a reasonable time. Minor works for example small crack that need to be done. So long as the works can be used by Employer, Contractor can get the Certificate of Practical Completion (CPC). 15.2

Certificate Certificate of Practical Practical Completion

When works are practically completed, Contractor shall notify Architect to verify. A joint final completion inspection will be conducted by Architect and all consultants to inspect the works. After the joint final completion inspection, Architect decides whether works are not practically completed with reason stated or works practically completed and issue CPC. Pursuant to clause 15.1, Architect may still issue CPC despite of minor defects that are non-critical and not major. CPC date will be the date when contractor send out notice to undertake defects. If no defects, it shall be the date when Contractor sent out the notice. Once receive CPC, Contractor’s liabilities to pay liquidated damages bring to an end and mark the beginning of the Defects Liability Period (DLP) 15.3

Contractor’s failure to comply comply with undertaking Contractor shall write an undertaking letter to Architect and specify the time required by him to make good the defects. With the undertaking letter by Contractor, Architect issues CPC to Contractor. In the event Contractor does not carry out to make good the defects, Employer may have three options: (1)  Architect can access the situation and where reasonable then grant Contractor excess time/ex-gratia time to complete the defects; or (2)  Employer can employ and pay others to rectify defects and all the costs incurred shall be set-off by Employer; or (3)  Contractor can leave all defects but all costs incurred shall be set-off by Employer.

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15.4

Schedule of Defects

Architect shall deliver a schedule of defects to Contractor within 14 days after DLP expired. Contractor shall make good within 28 days of receipt of schedule of defects. Employer can employ and pay others to rectify minor defects when the Contractor does not comply undertaking to rectify within time specified and all the costs incurred shall be set-off by Employer. 15.5

Instruction to make good Defects

Architect has the right to issue AI to instruct Contractor to make good critical defects at his own cost that appear within the DLP. Employer can employ and  pay others to rectify r ectify defects when the Contractor does not complied undertaking to rectify within time specified and all the costs incurred shall be set-off by employer. 15.6

Certificate of Making Good Defects

Contractor gives written notice to Architect. Architect in his opinion to decide within 14 days either no more defects and issue Certificate of Making Good Defects (CMGD) or defects have not been made good and give notice stating reasons for non-issuance of CMGD.

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PWD FORM 203A (2010) 39.0

COMPLETION OF WORKS

39.139.6

This clause is similar to PAM sub-clause 15.1-15.2 but the sub-clause of defects liability is separate to different diff erent clause which is clause 48 in PWD203A. As in the opinion of S.O., works is completed when Government have full, proper and  beneficial use of the work for their intended purpose, passed testing and commissioning, fit for occupation and essential services like external works as stated in contract.

48.0

DEFECTS AFTER COMPLETION

48.1

Any defect shall be reported by S.O. to Contractor within 14 days after DLP and Contractor shall make good the defects within 3 months of notice iin n PWD clause 48.1(b) whereas in PAM clause 15.4 stated that Contractor shall make good within 28 days of notice.

48.2

This sub-clause is not applicable in PAM. If Contractor failed to make good the defects, deduction from Performance Bond or from any monies due to Contractor may occur. S.O. can appoint third party where the cost of rectification plus 10% on-cost charges will be deducted from any money due or to become due to the Contractor.

48.3

Deduction from the amount to be paid to Contractor or from Performance Bond if the defect is impracticable or inconvenient for Government to have Contractor to remedy the same.

48.4

After Contractor has made good of defects, Certificate of Completion of Making Good Detects will be issued by S.O. to Contractor.

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PAM SUB-CONTRACT 2006 17.0

PRACTICAL COMPLETION AND DEFECTS LIABILITY

17.117.6

17.1 Practical Completion, 17.2 Certificate of Practical Completion, 17.3 Sub-Contractor’s SubContractor’s failure to comply with undertaking, 17.4 Obligation to clear out on completion, 17.5 Schedule of Defects, 17.6 Instruction to make good Defects

PAM sub-contract clause 17.0 is similar to PAM clause 15.0. If works are  practically completed, Sub-Contractor shall give a written notice to Contractor with a copy to Architect. 17.7

Remedial work due to Defects in the Sub-Contract Sub-Contract Works

The cost of execution remedial work to main contract works due to defects in sub-contract works shall be set-off by Contractor. 17.8

Remedial work due to Defects in the Main Contract Works

If Contractor or Architect instructs Sub-Contractor to execute remedial work, Contractor shall pay Sub-Contractor of the execution cost.

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A)  PAM CONTRACT 2006 (WITH QUANTITIES) (Cont’d)  PAM CONTRACT 2006 CLS.

CONDITIONS OF CONTRACT

22.0

DAMAGES FOR NON-COMPLIANCE

22.1

Liquidated Damages and Certificate of Non-Completion

If Contractor unable to complete the works by completion date and no EOT is given to Contractor, Architect shall issue Certificate of Non-Completion (CNC). Upon the issuance of CNC by Architect, the Employer shall have the right for Liquidated Damages (LD) which calculated per day basis from Completion Date to date of Practical Completion. Architect has the duty to advise on the amount of LD that the Employer is entitled to deduct from any sum payable to the Contractor but LD shall not be taken into account in the issuance of payment certificates and Final Certificate. 22.2

Agreed Liquidated Damages amount

LD is a genuine pre-estimate of loss and/or damage for injured parties. Employer must consider the loss and damage he may encounter and the calculation method for LD may need to be proved by Employer if the contrary is  proven by the Contractor. 22.3

Certificate of Non-Comple Non-Completion tion revoked by subsequent Certificate of Extension of Time

If Certificate of EOT issued (new Completion Date set) after the issuance of CNC, then CNC issued previously will be revoke. Employer must do adjustment on the LD amount he is entitled to retain based on the new Completion Date. If repayment needs to be made to Contractor, it shall be repaid within the period of Honouring Certificates from the date of the latest Certificate of EOT. If Contractor still does not complete the works on or before the new Completion Date, Architect shall further issue a CNC.

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PWD FORM 203A (2010) 40.0

DAMAGES FOR NON-COMPLIANCE

40.1

S.O shall issue CNC if Contractor failed to complete the works on time.

40.2

Government has the right to terminate the Contract with Contractor, Government entitled to recover from the Contractor, LAD calculated from the period of the issuance of CNC to the date of termination of this Contract. S.O entitled to issue  Notice to the Contractor for his intention before LAD is imposed. imposed.

40.3

Government have the right to avoid the necessity to prove actual cost suffered. This clause in fact is contrary to PAM whereby in our opinion, we think that in PWD, Government should prove the loss and /or damages suffered so that it is fair to Contractor. However, we understood that, Contractor is the one who signed and entered the Contract, therefore LAD should be paid by him in the event his work is completed beyond the Completion Date.

40.4

Contractor remains responsible to complete his works although the payment or deduction of LAD has been made.

PAM SUB-CONTRACT 2006 16.0

FAILURE OF SUB-CONTRACTOR TO COMPLETE ON TIME

16.1

This clause is similar to PAM clause 22.1, but the loss and/or expense that suffered by Contractor shall be set-off by Contractor in PAM Sub-Contract and the loss and/or expense that suffered by Employer shall be set-off by Employer in PAM.

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A)  PAM CONTRACT 2006 (WITH QUANTITIES) (Cont’d)  PAM CONTRACT 2006 CLS.

CONDITIONS OF CONTRACT

25.0

DETERMINATION DETERMINATI ON OF CONTRACTOR’S EMPLOYMENT BY EMPLOYER

25.1

Defaults by Contractor

Only Employer has the right to determine the employment of the Contractor as he is the parties who sign the contract with the Contractor. It is the employment of the Contractor that is being determined and not the contract. If the contract is  being determined, there is no more contract between the Employer and the Contractor. The Contractor does not have to compensate the Employer even if there is any default by the Contractor as the Contractor has no more contractual relationship with the Employer. There are are six Contractor’s defaults which entitle the Employer to contractually determine the Contractor’s employment. One of the defaults is the Contractor fails to proceed regularly and diligently with the Works. For instance, the Contractor claims that the Employer did not pay for his works, so the Contractor stops the works. The Contractor instructs his workers to  pretend working only when the Architect comes for inspection. After the Architect has left the site, the workers stop the works again. This is not considered as working diligently. The Contractor persistently refuses or neglects to comply with an AI is also another default. The Contractor has duty to comply with the AI upon receipt of a valid AI. If the Contractor breached in his contractual obligation to comply with AI, in other words the Contractor  persistently refused or neglected to comply with AI and the non-compliance has caused serious effects, the Employer may determine the Contractor’s employment. The non-compliance must be persistent but not one-off act.

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25.2

Procedure for determination

If the Employer decides to determine the Contractor’s employment when the Contractor committed breach under Clause 25.1, the Employer or Architect who represents the Employer may issue letter of default to the Contractor specifying the clause and date that the Contractor committed breach. The letter must be delivered either by hand or registered post. If the Contractor corrects the default within 14 days from the receipt of the default notice, the process of determination does not need to proceed further. If the Contractor ignores the notice and continues with the default, the Employer may have 10 days to decide whether to determine the Contractor’s employment. If the Employer decides to determine the Contractor’s Contractor’s employment, the Employer must issue a letter of determination informing the Contractor that his employment has been determined within 10 days from the expiry of the 14 days from the Contractor’s receipt of the default notice. The letter of determination has to be issued by Employer, the Architect can only issue letter of default on behalf of the Employer but not letter of determination. In the case that the Employer misses the said 10-day period, he has to repeat the procedures of issuing the default notice followed by the determination notice within the stipulated time periods. If the Contractor commits the same breach two months later, the Employer can directly issue the letter of determination to the Contractor as the warning has  been given two months ago. ago. 25.3

Contractor’s insolvency  insolvency 

If the Contractor went into bankruptcy, the employment of the Contractor can be directly determined by Employer.

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25.4

Rights and duties of Employer and Contractor

Rights and duties of Employer and Contractor on the determination of the employment of Contractor are mentioned under Clause 25.4. Under Clause 25.4(a), the Contractor shall stop all his works on site and hand  back possession of the site to the Employer and remove his labour force from the site but not the construction plant, tools, materials and goods. The Employer may employ and pay another contractor to complete the remaining or outstanding work. The Contractor is required to leave all the temporary  buildings, construction plant, tools, materials and goods on the si site, te, except those construction plant hired by the Contractor. The Employer may buy or lease from the Contractor the plant and equipment that are owned by the Contractor. The replacement Contractor is allowed to use all the items already on the site and he may also purchase all the materials and goods required to carry out and complete the remaining and outstanding works. In the situation that the construction plant and equipment that are already on the site do not belong to the Contractor and the Employer decides to use them to complete the works, the Contractor shall within 21 days of the date of determination assign to the Employer the benefit of any agreement to continue hiring the construction plant and equipment already on the site. Clause 25.4(b) stated that the Employer and the Architect may require the Contractor to assign to the Employer the benefit of any agreement for the supply of materials, goods and for the execution of any work. The Contractor must undertake the assignment within 21 days of the date of determination and shall not request for any payment. For example, the Contractor has agreement with the domestic supplier which supply timber door, the Contractor shall assign the agreement to the Employer and then the replacement Contractor may sign the agreement with the domestic supplier. If previously the Contractor has hired a lawyer to draw up the agreement, the Employer is not liable to pay the lawyer fees back to the Contractor. Under Clause 25.4(c), upon receipt of written AI, A I, the Contractor shall remove all his items which the Employer does not require for completion of remaining works. The items may include wastage of materials, harden Ordinary Portland Cement and etc. A reasonable time is given for removal of the items. If the Contractor comply with the instruction, then the matter can be considered close. However, if the Contractor defaults, the Employer is permitted to remove and sell off any such property that are owned by the Contractor except those that are not belong to the Contractor. After deducting the costs incurred in removal and disposal of the property, the balance of the proceeds of the sales must be held by the Employer to the credit of the Contractor to be taken into final account.

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25.4

Rights and duties of Employer and Contractor (Cont’d) (Cont’d)  

Clause 25.4(d) enables the Employer to relieve his contractual obligation to make any further payment until after the completion of the remaining works. The payments include the payments certified but not yet paid, the payments outstanding for work done but not certified, Retention Fund etc. The Contractor has to pay the Employer all cost for completing the Works and all loss and/or expense suffered by the Employer due to the event of determination. The cost for completing the Works includes the amount paid to the replacement Contractor and the costs of preparing the contract for completing the remaining works. Upon completion of the remaining works, the value of work done by the Contractor on site, the cost incurred for completion of the Works and the loss and/or expense suffered by the Employer are all taking into Final Account. The  payment retained from the work carried car ried out by the t he Contractor is used to t o off-set the Employer’s claim against the Contractor in the Final Account. 25.5

Records of Works

The Architect or Quantity Surveyor shall give a notice in written to the Contractor to inform him the date of inspection on site to record the extent of the Works that has been carried out by the Contractor and the materials and goods delivered to site. The written notice shall be given within 28 days of the determination of the Contractor’s employment. After completing record, the Architect or Quantity Surveyors shall send a copy to the Contractor. The record will be the basis for evaluation of the value of the works done and the materials and goods delivered to site by the Contractor.

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25.6

Final Account upon determination determination

The Architect or Quantity Surveyor is responsible to prepare the final account and submit to the Employer and Contractor for their agreement within 6 months on completion of the remaining works which means Final Certificate has been issued. Clause 25,6(a) stated that upon receipt of the draft final account from the architect or quantity surveyor, the Employer and Contractor have 3 months from the date of receipt of the final account to review and make decision whether to accept the final account or to dispute it. If nothing is disputed by both parties upon the expiry of the prescribed 3-month period, the final account shall deem agreed by the parties. If the difference between the amount in the final account and the amount payable to the Contractor for the completed work is positive, this means that the Contractor is owing the Employer and so he has to pay the Employer. Or in other way, the Employer may call upon performance bond to recover the sum. However, if the difference is negative, then the Employer has to pay the Contractor the remaining amount of the work done after deducting all costs suffered by the Employer. If any party disputes with the final account, Clause 25.6(b) requires such party to give a written notice which stating the disagreement to other party. The written notice should be given within 3 months from the date of receipt of final account. The Architect and Quantity Surveyor are given the copies of the written notice. Upon receipt of the grounds of dispute, the Architect or Quantity Surveyor has 3 months to review the submissions of disputing party and make decision either amend the final account or not to do so. The party that disagree with the Architect or Quantity Surveyor’s decision must bring the dispute to arbitration within 3 months upon receipt of the Architect or Quantity Surveyor’s decision. If the disagreeing party refer dispute later than the prescribed 3-month period, the final account or amended final account shall deem to be conclusive and agreed  by the parties. Clause 25.6(c) entitles the Employer to refer the dispute regarding Liquidated Damages, set-off and interest to arbitration.

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25.7

Remedy limited to damages only

Once the Contractor receives the written notice by the Employer pertaining to the determination of the Contractor’s employment, the Contractor has 14 days to vacate the site by removing all his personnel and labour force, and hand back  possession of the site to the Employer. However the Contractor shall not remove the construction plant, tools and equipment unless he is instructed by the Architect to do so. If the determination is later found to be invalid, in other words, if the Employer wrongly determines the Contractor, the Contractor is only entitles to claim compensation for damages. The contract cannot be awarded to him again as the contract would have been awarded to other Contractor 25.8

Employer’s rights and remedies not prejudiced

All the provisions under Clause 25.0 will not affect the Employer’s common law rights and so the common law rights is preserved.

PWD FORM 203A (2010) 51.0

EVENT AND CONSEQUENCES OF DEFAULT BY THE CONTRACTOR

P.W.D Form has similar provisions as PAM Form 2006. But there are some additional provisions in P.W.D Form, which is after the contract has been terminated, the Contractor must hand over all plans, designs, specification and other relevant documents relating to the works to the Government without charging the Government. Besides, the Contractor is not allowed to be released from his obligations even though the contract has been terminated. In P.W.D Form there is also an additional provision mentioning that the Contractor is not entitled to claim any losses upon termination of the Contract. P.W.D Form has no provision for records of works and final account upon determination. Also, there is no provision stating the remedy to Contractor if the termination is later found that not valid. So the Contractor might not get his compensation, but the Contractor can write a letter to Government request for compensation.

PAM SUB-CONTRACT 2006 23.0

DETERMINATION DETERMINATION OF SUB-CONTRACTOR’S SUB-CONTRACTOR’S EMPLOYMENT BY CONTRACTOR

PAM SUB-CONTRACT 2006 has similar provisions as PAM Form 2006.

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A)  PAM CONTRACT 2006 (WITH QUANTITIES) (Cont’d)  (Cont’d)  PAM CONTRACT 2006 CLS.

CONDITIONS OF CONTRACT

23.0

EXTENSION OF TIME

23.1

Submission of notice and particulars for extension of time

When the works reasonably apparent to delay beyond completion date, Contractor should submit with all particulars to notify Architect within 28 Days from the date of the AI, CAI or commencement of the Relevant Event. The particular include: (a)  Relevant event causing delay; (b)  Details of the expected effect; and (c)  Estimate the EOT required This notice is a condition precedent to an entitlement of EOT. However, if Contractor fails to submit such particulars to Architect within the stated time it shall be deemed as such Relevant Event will not delay the completion of the Works beyond the Completion Date. 23.2

Delay by Nominated Sub-Contractor Sub-Contractor

After Contractor submits particulars for application of EOT under clause 23.1 where the EOT claim is related to NSC’ NSC ’s work, Contractor should send a copy of the written notice and particulars of the EOT claimed to NSC. 23.3

Insufficient information

Architect can request for additional information within 28 days of receiving Contractor’s notice if  the  the particulars submitted by the Contractor are insufficient for his assessment. Contractor must furnish all relevant information within 28 days from receiving Architect’s reply or within the period as stated stat ed by Architect in writing. writing.  

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23.4

Certificate of Extension of Time

Architect must decide within 6 weeks from receipt of sufficient particulars for assessment whether to grant EOT or to reject Contractor’s application of EOT. Architect may issue Certificate of Extension of Time if EOT is granted or written notice of rejection before or after the completion date. However, if EOT does not grant by Architect and work does not complete on completion date, Architect shall on the completion date issue Certificate of Non Completion (CNC) to avoid time at large. 23.5

Other consideration for extension of time

In accessing the granting of EOT, the following may take into account: (a)  Any work omitted under the Contract. However, Architect do not have the right to fix the Completion Date earlier than the Completion Date stated in the appendix; and (b)  Any other Relevant Events where Architect is in the opinion will effect on Contractor’s right to claim EOT. 23.6

Contractor to prevent delay

When the works are beyond Completion Date, Contractor shall use his best endeavour to prevent, reduce delay or further delay or others to meet the satisfaction of Architect. 23.7

Notification to Nominated Sub-Contractors Sub-Contractors

When a new Completion Date is fixed, Architect should notify all NSC.  NSC should be informed so that they can continue to work on and finish the works on or before new Completion Date.

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23.8

Relevant Events

Under clause 23.8 of PAM 2006, the following Relevant Events may entitle the Contractor an EOT: 23.8(b)

Exceptionally inclement weather

It is an adverse weather condition and deemed as unforeseen situation. For example, the rain has fall heavily continuous for two week and make the site unsuitable to carry out of the works. Contractor has to obtain evidence on the site from Malaysian Meteorological Department as particulars to claim EOT. 23.8(k)

Delay/ Failure by the Employer to supply materials and goods which he has agreed

For example, Employer agreed to supply ceramic tiles for the project. However due to late delivery of the tiles to site have caused Contractor delay in his work  progress. 23.8(q)

Delay caused by Authority or Service Provider

Authority such as Jabatan Bomba dan Penyelamat Malaysia and service  providers such as SYABAS and Tenaga Tenaga National Berhad. For example, Tenaga National Berhad has to cut off electricity for 1 week due to repair purpose and it is not default by Contractor. Thereby, Contractor may entitle for EOT.

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23.9

Extension of time after the issuance of Certificate of Non-Completion

This clause has been drafted to expressly permit the Architect to issue Extension of Time where a Relevant Event that caused EOT occurs after the issuance of the Certificate of Non-Completion (CNC). Such certificate has the effect of revoking the CNC previously issued and  preserving the Employer ’s right to impose LD to the Contractor and refund such amount to Contractor within the Period of Honouring Certificate from the date of the latest Certificate of Extension of Time. The issuance of EOT after CNC is common for example in a large scale  building project where the Relevant Events that caused the EOT occur cannot  be ascertained by the Architect on or before the Completion Date. Architect shall issue CNC to avoid time at large if he cannot ascertain the EOT claim by Contractor on or before the Completion Date. EOT granted after CNC shall be added to the completion date of the works.

23.10

Architect’s review of extension of time after Practical Completion Architect’

In this clause, Architect may review any previous extension of time granted as to minimise the unsatisfactory of Contractor or to avoid the issue being reviewed by the arbitrator. Moreover, it gives Architect to revisit his previous decision. Architect may review on EOT previously granted within 12 Weeks after the date of Practical Completion having regards to any Relevant Events which is fair and reasonable. Completion date will be re-fixed if Architect in his opinion Contractor is entitled for EOT. Such review shall not decrease the EOT previously granted. Excess LD deducted by Employer shall repay to Contractor within Period of Honouring Certificates subject to the Clause 22.3 PAM Contract 2006.

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PWD FORM 203A (2010) 43.0

43.1(c)

DELAY AND EXTENSION OF TIME

Suspension of works works under under clause 50 stated that, S.O. may instruct the Contractor to suspend the work at any time and such suspension maybe continue for a period exceeding 12 months. In this case, even Contractor is entitle to claim for Extension of Time however such delay may cause troubles to Contractor such as financial problem and work  progress of Contractor in other projects.

43.1(e)

Contractor entitle to Extension of Time when such instruction issued by S.O. under Clause 5.0. For example in Clause 5.1(f), Contractor is entitled to Extension of Time for opening up for inspection of any work covered up and no non-compliance found.

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PAM SUB-CONTRACT 2006 21.0

EXTENSION OF TIME

21.121.2, 21.4-

21.1 Notification Notification of Relevant Events causing delay, 21.2 Architect’s written recommendation to an extension of time, 21.4 Relevant Events, 21.5 Delay caused by Contractor, 21.6 Determination of extension of time, 21.7 Sub-

21.9

contractor to prevent delay, 21.8 Review of written recommendation of extension of time by the Architect, 21.9 Final determination of extension of time by the Contractor

Similar provision as PAM clause 23.0 but the time frame given to claim EOT is difference. Sub-Contractor shall give such notice to Contractor within 21 Days from the date of the AI, CAI or commencement of Relevant Event. However Contractor shall give such notice to Architect in 28 Day under PAM. This allows Contractor to have sufficient time to collect information from Subcontractor. 21.3

Appeal’s against Architect’s recommendations  recommendations 

If Sub-contractor has disputes on the written rejection or recommendation of the Architect, he may use Contractor ’s name in any dispute resolution procedure. Provided that giving to Contractor such indemnity or security if required and upon Contractor ’s consent.

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B)  PWD FORM 203A (2010) CLS. 4.0 

4.1(a)

CONDITIONS OF CONTRACT S.O.’S S.O. ’S RIGHT TO TAKE ACTION  ACTION  

All variation issued by S.O. must not exceed the financial limit as stated in the Appendix 1. If the variations have exceeded the limit as stated, the S.O. must get an approval from the designated Government Officer to decide on the issuance of variation.

4.1(b) 

The S.O. can act on behalf Government to issue instructions other than these five clauses namely, clauses 51, 52, 53, 58 and 66. Only the designated Government Officer named in Appendix of Contract Document is empowered to make decision for these five clauses.

4.2

Under this clause, the Contractor is not entitled to claim EOT and loss and expenses if delay by S.O. in seeking the designated Government Officer to approve for the 5 clauses stated in clause 4.1b although it is not default by him. However, Contractor can use his best endeavours to prevent or minimise the losses due to this clause. For example, if Contractor suffers project overrun due to delay in designated Government Officer making decision but Certificate of  Non-Completion issued and Liquidated and Ascertained Damages imposed, Contractor can try his best to minimise the delay. Contractor may do chart or anything else necessary to convince designated Government Officer to approve the variation works to lessen his damages.

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Peculiar condition in PWD Form 203A (2010) 4.0 

S. S.O.’S O.’S RIGHT TO TAKE ACTION 

4.1

S.O has financial limit in respect to the issuance of variation works as stated in the Appendix 1 of the Contract. In PWD Form, the S.O. is entitled to give instructions but he cannot make decision for the six clauses.

4.2

Contractor is not entitled to claim for EOT and loss and expenses if it is delay  by the designated Government Officer to make any decisions for clauses 51, 52, 53, 58 and 66.

The clause 4 is deemed as peculiar when compared to PAM 2006. In PAM 2006, Architect has the right to issue any variation works and in the event Architect has delay in giving decision in respect to variation works, Contractor is entitle for Extension of Time (EOT) and Loss or/and Expenses under clause 23.8 (e) and clause 24.3 (a) of PAM 2006 respectively. Recommendation Recommendat ion to improve such condition

From our point of view, this is unfair to Contractor if designated Government Officer is the one who delay in making decision to instruct and decide on such works. The argument is if designated Government Officer has delay to decide on such works, Contractor has to wait and pay Liquidated and Ascertained Damages if project overrun due to delay in giving such decision? We would like to propose to amend that the Contractor is entitled for at least of EOT if not loss and expenses for the five clauses where the decision delay is due to designated Government Officer. Therefore, we would like to amend clause 4.2 ‘The Contractor shall not  be entitled to extension of time or any additional cost or expense or whatsoever arising from compliance with this clause 4’ into ‘The ‘ The Contractor shall entitled to Extension of Time but not additional cost or expense or whatsoever arising from compliance with this clause 4. PROVIDED ALWAYS, this is not due to any act, negligence, default or breach of Contract  by Contractor and Contractor has taken all reasonable steps to avoid or or reduce such delay’ delay’.

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B)  PWD FORM 203A (2010) (Cont’ (Cont’d) CLS.

CONDITIONS OF CONTRACT

11.0 

INSPECTION OF SITE 

11.1

Before the submission of tender, the Contractor is considered to have inspected, examined and satisfied himself for the following: (a)  Nature of the ground and subsoil; subsoil; (b)  Form and nature of the site; (c)  Extent and nature of the work, materials and goods for the works; (d)  The means of communication and access to the Site; (e)  The accommodation he may require; (f)  Contractor shall obtain for himself all information as to risks, contingencies and all circumstances that will affect his tender. For example, before the tender submission, Contractor has to do a subsoil investigation on the site to determine the suitability of site for the proposed construction project. Under this provision, it is Contractor own cost and time to obtained soil sample from trial pits, boreholes or sampling shells before the closing date for tender submission. This enables the Contractor to determine the difficulties which may arise during the construction process and period. If let say Contractor failed to identify poor soil condition as compared what is  prepared in the tender document and he does not take in account for the costing, Contractor shall bear his own cost to construct a deeper d eeper foundation.

11.2

Any information or document forwarded by the Government to the Contractor shall not relieve Contractor of his obligation under this clause. For example, Government may pass a soil investigation report of the site to Contractor does not mean that Contractor is exempted in doing the soil test. If Contractor used the information to tender and at a later time the information is found not up-todate, it is Contractor’s default.  default.   It shall be the duty and responsibilities of the Contractor to fully inspect and examine the site.

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Peculiar condition in PWD Form 203A (2010) 11.0 

INSPECTION OF SITE 

 No provision is provided in PAM 2006 that Contractor before the submission of tender shall carry out the detailed inspection of the site for ground, subsoil and its nature. However, PWD 203A required Contractor to have a detailed inspection before he submitting the tender. 11.1

During soil investigation, soil samples should be taken from position in the site which are truly representative of the area but are not taken from the actual  position of the proposed foundation. Detailed inspection to the extent of nature of subsoil is quite unfair to the Contractor where in some project the site is large and Contractor is difficult to carry out the sub-soil test for every part. Besides, in a larger site, it is time consuming by doing many sub-soil tests. Contractor might face time is running out and he must take in account for this clause before the submission of tender. In short, Contractor should use his own time and cost to comply the provision of this clause before submitting his tender.

11.2

Besides, one more controversial point is where any data and information given  by S.O. for inspection of site shall not relieve Contractor of his obligations. Clause 11.2 presumably should point any documents. Contractor shall take his own risk for receiving and using any documents given by the S.O. in tendering. Government is not liable if the information is inaccurate.

Recommendation Recommendat ion to improve such condition

We would like to suggest that, the provision in inspection of site should limit to certain extend whereby in 11.1(a), Contractor shall examine and satisfy himself as to the nature of the ground and should not include subsoil. It is the best to exclude the inspection inspecti on of subsoil so Contractor can focus on other works. Hence, we would like to suggest to amend clause 11.1(a) ‘the nature of the ground and subsoil’ into ‘the nature of the ground’. Besides, for clause 11.2, in order to rectify the unfairness to Contractor, Government shall be liable for any documents and information given in the tender documents while information in S.O. Instruction shall be deemed correct. By correcting this, Contractor can manage the  project well by reducing any unnecessary unnecessar y works and this benefit both parties. Therefore, we would like to suggest to amend clause 11.2 ‘Any information or  document   document forwarded by the Government to Contractor shall not relieve the Contractor of his obligations under the  provisions of this clause’ into ‘Contractor shall use his best endeavour in interpreting any document and information provided by Government to Contractor while any document and information provided in Tender Document in regard to inspection of site shall be valid while information provided in S.O. Instruction shall be deemed correct.

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B.  PWD FORM 203A (2010) (Cont’ (Cont’d) CLS.

CONDITIONS OF CONTRACT

13.0

PERFORMANCE PERFORMANCE BOND/ PERFOMANCE GUARANTEE SUM

13.1

On the date of possession of Site, Contractor submits 5% of the total Contract Sum as Performance Bond to Government and it shall remain valid until 12 months after Defects Liability Period or the issuance of Certificate of Completion of Making Good Defects, whichever is later. The objective of Performance Bond or Performance Guarantee Sum is as a security due  performance of the Contractor’s Contractor’s obligations under the Contract. Contract. Performance Bond needs to be provided by the Contractor before commencement of the work as a guarantee to Government. If Contractor fails to do so then Contractor can submit Performance Bond in the form of Performance Guarantee Sum. Performance Guarantee Sum mostly applied to Contractor where: (1)  Contractor’s company is newly establish; or   (2)  Contract sum of the previous project undertake by Contractor is low Therefore without the credibility of the Contractor, no bank is willing to be his guarantor.

13.2

Performance Guarantee Sum is the deduction of 10% made on every progress  payments until the amount deducted up to 5% of Contract Sum. The amount deducted shall be retained by the Government.

13.3

If Contractor fails to construct the building due to an unfortunate event for example bankruptcy of Contractor, Government entitled to call upon Performance Bond as compensation for any monetary loss.

13.4

If there is any claims made during Performance Bond, Contractor will be required to issue additional Performance Bond or bonds as further security at any time where Performance Bond must be equivalent to 5% of Contract Sum.

13.5

After the completion of making good of defects and giving of the Certificate of Completion of Making Good Defects, Performance Bond shall be refunded to Contractor.

13.6

If Contract is terminated by Government due to event and consequences of default by the Contractor, the Performance Bond shall be forfeited.

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Peculiar condition in PWD Form 203A (2010) 13.0

PERFORMANCE PERFORMANCE BOND/ PERFOMANCE GUARANTEE SUM

13.2

Performance Guarantee Sum only applicable under PWD which is not applicable in any others forms of contract.

13.6

If Contract is terminated under any event and consequences of default by the Contractor, the Performance Bond shall be forfeited whereas according to PAM clause 37.5, if Employer determines the employment of Contractor, Employer shall call upon the Performance Bond and utilize the amount needed to complete the Works and recover his loss and/or expenses suffered by Employer and refund the balance to Contractor upon completion of works.

Recommendation Recommendat ion to improve such condition

It is stated in PAM clause 37.6 whereby if Contractor determines his own employment, the Employer shall return Performance Bond within 28 days to Contractor for cancellation. However, there is no provision provided in PWD state that Performance Bond shall return to Contractor in the event Contractor determines his own employment. From Contractor’s point of view, Government should not forfeit the Performance Bond although it is Contractor’s fault. It is quite unfair to Contractor, Contractor shall at least get  back certain amount of the Performance Bond submitted after utilize the amount needed to complete Works. So, we would like to amend that sentence ‘Notwithstanding the above, in the event that this Contract is terminated under clause 51 hereof the said Performance Bond or any balance thereof shall be forfeited.’ into ‘Notwithstanding ‘Notwithst anding the above, in the event that this Contract is terminated under clause 51 hereof the said Performance Bond or any balance thereof shall be utilise for any works suffered by Government and any balance of monies remaining after deducting all losses shall shall be refunded to Contractor.’  Contractor.’  

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B.  PWD FORM 203A (2010) (Cont’ (Cont’d) CLS.

CONDITIONS OF CONTRACT

28.0 

PAYMENT TO CONTRACTOR AND INTERIM CERTIFICATES

28.1

S.O shall make the first valuation when total value of work executed by Contractor including delivery of any unfixed materials or goods intended for the works has reached the sum or minimum value of work as stated in Appendix. Assume value of work to be executed including materials and goods to be delivered before First Interim Certificate is RM10,000.00. When Contractor in his opinion he has executed the work including materials and goods has reached the amount of RM10,000.00, he shall inform S.O. to carry out site valuation. If S.O. valuation is RM9900.00, then Contractor is not entitled for  payment. He should proceeds the t he works until he reach the minimum value as stated in the appendix.

28.2 

In course of months, S.O shall materials make valuation whendelivered Contractor hasthe executed thesucceeding work and including unfixed and goods to the site has reached the minimum mi nimum value stated in appendix. The principal of minimum value is basically same as clause 28.1. However, this clause is subject to clause 28.4 where total value of the work properly executed and up to 90% of the value for unfixed materials and goods delivered to site and less any payment previously paid under the Contract.

28.3

S.O. shall issue an Interim Certificate to the Contractor within 14 days from the date of such valuation being made and subject to the provision under Clause 28.1 where Contractor work done has reached the minimum value. As long as Contractor has returned duly signed Letter of Acceptance of Tender and deposited with S.O. or Government the relevant insurance, S.O. can issue first Interim Certificate (and no other).

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28.4

The amount certified by S.O. should be estimated total value of the work  properly executed and up to 90% of the value of unfixed materials and goods delivered to site and less any payment previously made paid under the Contract. The certificate should only include the value of the unfixed materials and goods are properly and not prematurely delivered to Site and adequately  protected against weather, damage or deterioration on site. The word  prematurely means for example when Contractor doing foundation works, the floor tiles has been delivered to site.

28.5

Any unfixed materials and goods supplied and delivered by NS should not take into account. Payment should be made for full value of unfixed materials and goods because NS only supply material that only entitled to attendance but not  profit, therefore payment should not be made.

28.6

Government should make payment to Contractor as follows: (a)  Government shall make payment as the amount certified in Interim Certificate where the Performance Bond submitted by Contractor is in the form of Banker ’s, Insurance or Finance Company Guarantee; or (b)  Government will only pay 90% on the amount certified in Interim Certificate when Performance Bond is submitted in the form of Performance Guarantee Sum. When the amount so retained is equivalent to 5% of the Contract Sum, full amount certified will be pay to Contractor.

32

 

Peculiar condition in PWD Form 203A (2010) 28.0 

PAYMENT TO CONTRACTOR AND INTERIM CERTIFICATES

28.1

Contractor ’s first payment will only be approved when his value of work reached the sum or minimum value as stated in Appendix however in PAM the valuation is based on regular interval and have no limitation on the amount claim.

28.2 

In an extraordinary condition, Contractor is possible to apply more than one times for valuation within one month when his works has reached the sum or minimum value of work as stated in Appendix. Meanwhile, PAM 2006 and PAM Sub-Contract 2006 provide more consistency since valuation is based on regular interval.

28.3

Period of honouring certificates is not applicable in PWD. Therefore, period of making payment to Contractor might be shorter or longer. In short, lack of consistency in making payment. pa yment.

28.5

No retention sum implant in interim certificate to ensure contractor properly completes the works in accordance with the contract.

28.6

Performance Guarantee Sum is applicable under PWD. This may be view as one of the way for the Government to support and give chance to New Contractor or small scale Contractor to take part in Government project.

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Recommendation Recommendat ion to improve such condition

PWD is a multi-purpose Contract however it does not provide regular interval basis for  payment under Clause 28.0. It might cause Contractor to have cash flow problem as he cannot get payment if his work done does not reach the minimum value as in Appendix. From Contractor's point of view, this clause is not fair where Contractor can only apply for first interim claim when the value of work reach the minimum value as stated in Appendix. Some goes to subsequent payment. In light of this, Government should shorten the time for Contractor to apply claim for example allow Contractor apply for two times before it reach half of the minimum value as stated in Appendix. By doing so, the burden of Contractor can be reduce and avoid cash flow  problem for Contractor. Hence, we would like to suggest clause cl ause 28.1 should amend as ‘when the Contractor ’s total value of work thereof has reached half of the sum referred to in Appendix, S.O. shall make the pre-valuation instead to meet the minimum value of the First Interim Certificates. At the same time, Period of Honouring Certificates should apply into PWD to ensure Government will make payment to Contractor within the  regular time in order to prevent any financial problem to Contractor. For example, Clause 28.3 should amend as whereby after issuance of Interim Certificate by S.O. to Government; Government shall thereafter pay the amount certified to Contractor within the Period of Honouring Certificates.

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B. PWD FORM 203A (2010) (Cont’ (Cont ’d) Clause 32.0 EFFECT OF S.O.’S CERTIFICATES  CERTIFICATES  In case of dispute between Contractor and Government in arbitration or in Court, no certificate issued by the Superintending Officer (S.O.) is final and binding. The S.O.’s certificate is not deemed as a conclusive evidence as to the sufficiency of the work, materials or goods and it shall be the responsibilities of Contractor to make good all defects,

imperfection, shrinkage or fault in this Contract. The words ‘Effect of S.O.’s Certificates’ stated under this clause is means any certificates for example, Certificate of Practical Completion (CPC) and Certificate of Completion of Making Good Defects. For instance, the issuance of Certificate of Completion of Making Good Defects does not mean Contractor liability and responsibilities under the Contract come to an end. Despite the issuance of the certificate, Contractor is still liable at a later time when there is any works which required Contractor to work on. Peculiar condition in PWD Form 203A (2010) The provision as provided in clause 32 of PWD 203A is particular side more on Government. For example, when the Contractor has completed the whole of the works for their intended  purpose, despite of minor defects, S.O. shall issue CPC within 14 days from Contractor

written notice. However, the issuance of CPC does not relieve of Contractor’s obligation under the Contract although the Certificate of Completion of Making Good Defects has issued at a later time. This means in the future for 10 years, 100 years or perhaps 200 years, if the said works has defects, the said Contractor is still liable for making good the defects. In other words, the liability of the Contractor is infinity and does not end with the issuance of CPC. Therefore, any certificate issue by the S.O. is merely a piece of paper, not a ticket to  bring Contractor’s liability to an end under the the Contract. It shall also to take note that, clause 32 has mentioned clearly in case of dispute between Contractor and Government in arbitration or in Court, no certificate issued by the S.O. is final and binding. In short, Contractor shall be reminded that he is always at the unprotected side whereby Government has put in a clause to protect their interest. Since the liability of Contractor who undertake works under PWD 203A is undefinable, therefore the cost in terms of price and time is also high for Contractor. Recommendation to improve such condition Recommendation The effect of S.O. certificates provided in clause 32.0 PWD 203A seems to be unfair to Contractor. Certificate issue by S.O. shall be final and binding to certain extend. It shouldn’t  bound the Contractor’s liabilities with no time limit.  limit.  Therefore, in order to rectify the unfairness as mentioned above, we are in the opinion that clause 32 should add in as ‘W ‘Whereby hereby after the issuance of Certificate of Completion of Making Good Defects by S.O. to Contractor, works which is not defaulted by the Contractor, he shall be entitled to loss and expenses to amend and rectify for the said works ’. For example, at a later time after the issuance of Certificate of Completion of Making Good Defects, if Government is in the opinion that the works is unsatisfactory for use and require Contractor to redo the part or whole of the works, Contractor should entitle to claim the lost and expense for the works. 35

 

B. PWD FORM 203A (2010) (Cont’ (Cont ’d) CLS.

CONDITIONS OF CONTRACT

58.0

EFFECT OF FORCE MAJEURE

58.1

In the event of Force Majeure, neither PAM Contract 2006 nor the P.W.D Form 203A shall be in breach by the Government or Contractor of its obligations under the Contract.

58.2

Force Majeure is defined as an event beyond the control of both Parties, which are: (a) War. For example, Contractor has a project located at Syria, however, during the construction, a bomb drop at the site; (b) Insurrection, revolution, rebellion, military or usurped power, civil war, terrorism. For example, when a place is surrounded with the event mentioned, which makes Contractor difficult to proceed regularly and will affect the carry out of the works; (c) Natural catastrophe which Contractor has not expected to take precaution. Example of natural catastrophe is floods and earthquakes; (d) Nuclear explosion, radioactive, chemical contamination or radiation. For example, Contractor has a construction site at Japan where a nuclear power station has exploded and affects the site. (e) Event of pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds; (f) Riot, commotion or disorder. For example, worker commotion disabled the carry out of the construction works.

58.3

If the party is unable to perform of its obligation under the contract in the event of Force Majeure, the party shall inform the other party with full particulars.

58.4

The Contract may be terminated upon mutual agreement of both parties if the Force Majeure is so severe that will affect the original intention of the Contract.

58.5

All rights, obligations, claims and liabilities by both parties are exempted if the Contract is terminated upon mutual agreement in the Event of Force Majeure.

58.6

If the Event of Force Majeure has not occurred, no parties shall rely upon clause 58.

58.7

If the parts is not affected, delayed or interrupted by the Event of Force Majeure, the Contractor shall continue to perform the other parts of the works.

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Peculiar condition in PWD Form 203A (2010)

First of all, the interpretation of the Force Majeure in PAM 2006 and PWD 203A has different meaning. In PAM, it means exceptional inclement weather which also cannot be foreseen. For example, the rain has fall heavily continuous for two week and make the site unsuitable to carry out of the works. However in PWD 203A, Force Majeure consists of wide variety of range as stated in clause 58.2. In PWD 203A, it provides the provision whereby Contract may be terminated upon mutual agreement of the Parties in the Event of Force Majeure is so severe. Pursuant to clause 58.5, it further explained that the rights, obligations, claims and liabilities are exempted if the Contract is terminated upon mutual agreement in the Event of Force Majeure. However, no  provision is provided in PAM 2006 whereby in the event of Force Majeure, Contract can be determined. In PAM 2006, there are only 3 clauses provided for Employer to determine Contractor’s employment or Contractor determines his own employment. Contractor’s employment can be determined pursuant to clause 25.1, Contractor may determine his own employment pursuant to clause 26.1 while Employer may determine Contractor’s employment or Contractor determines his own employment due to Outbreak of hostilities according to clause 31.

37