WEEK 4LEARNING OUTCOMES (CO1-PO1)

•Understand the contract document•Understand how to prepare the bill of quantities

• Agreement of at least two parties with purpose of creating legal obligation between the parties and capable of being enforced by the court of law.

• Contract = offer + acceptance + consideration

CONTRACT

What is contract document?

@nurkamaliahmustaffa2013

Contract Document

Can be defined as a legally binding Can be defined as a legally binding agreement between parties. agreement between parties.

In civil engineering works, the contract In civil engineering works, the contract document is normally an agreement to document is normally an agreement to have work done in return for a specified have work done in return for a specified sum of money.sum of money.

The client commissioning the work is The client commissioning the work is legally known as the ‘employer’ while the legally known as the ‘employer’ while the party carrying out the work is legally party carrying out the work is legally known as the ‘contractor’.known as the ‘contractor’.

@nurkamaliahmustaffa2013

Who is involve in the contract?• The client commissioning the work is legally

known as the ‘employer’. • The party carrying out the work is legally

known as the ‘contractor’.

It is very important for the person preparing the contracting requirements and other documents to fully understand the implications of what does, and does not, constitute the “Contract Documents”; failure to properly designate the Contract Documents can be a significant contractual flaw.

Construction Documents

• Construction Documents are defined as the written and graphic documents prepared or assembled by the A/E for communicating the design of the project and administering the contract for its construction.

• 2 major groups

1.Bidding Requirements

Used to attract bidders & explains bidding process

2.Contract Documents

Legally enforceable requirements that become part of the contract

Include all construction documents except bidding forms

CONSTRUCTION DOCUMENTS

Introduction to contractsIntroduction to contracts

Why Use contract in construction:Describe scope of workEstablish time frameEstablish cost and payment provisionSet fourth obligations and relationshipMinimize disputesImprove economic return of investment

Content of the Content of the contractcontracto Identify the parties

o Promises and responsibilities

o Scope of work

o Price and payment terms

o Commercial terms and conditions

o Project execution plan.

CONTRACT DOCUMENTATION

1.General Condition of Contract - Provide legal binding agreement between parties and they cover the essential points such as completion date of work, method of payments and access to the work etc.

2.Contract Drawing – Show the location, scope of works and design intricacies (details) and what else are required to be constructed are also shown as far as possible.

3.Specifications – Details out the quality and standards expected of the works since the construction drawing are not able to graphically show the entire quality required. As such, it is essential for the specifications to be read in conjunction with the drawings in order to comprehend the full extent of the quality and standards required since the specifications will detail out the quality and standards of materials and workmanship required or expected of the works.

CONTRACT DOCUMENTATION – CONT…

4.Bill of Quantities – In section 1 paragraph 7 (rule 1.7) of the CESMM, it is defined that quantities are “List of items that gives brief identifying descriptions and estimated quantities of work comprised in contract”. This definition emphasizes the importance of being brief but yet concise in the preparation of BQ and thus, similar information should not be repeated. The term “estimated” is used in the definition because of the uncertain nature of civil engineering works which is thus the reason for the requirement of re-measurement of works on site to determine the actual quantities utilized or executed.

* In view of the status of the current of Form of Contracts used, BQ is not mandatory document to the contract but it is complimentary to the other 3 essential document which would have (or should have) adequately described what are actually required to be done contractually.

The contract documents normally used in a civil engineering contract consists 6 items:

Form of contractForm of contract General condition of contract

General condition of contract

SpecificationSpecification

Bill of quantitiesBill of quantitiesContract drawingsContract drawings

Form of tenderForm of tender

@nurkamaliahmustaffa2013

Form of contractForm of contract

It is a formal agreement between client and contractor for the execution of the work accordance

with the other contract document.

Generally covered by the ‘Form of Agreement @ Contract’ incorporated in the General Condition of Contract for the use in connection with works of civil engineering construction.

@nurkamaliahmustaffa2013

@nurkamaliahmustaffa2013

General condition General condition of contractof contract

Generally define the terms under which the

work is to be undertaken The relationship between the client or employer

The engineer and the contractor

The powers of the engineer

The terms of paymentvariation and

valuation of variation

method of measurementmaintenance

completion date

access to the work

sequence of construction

storage available to the contractor

Provide legal binding agreement between parties and they cover the essential points such as completion date of work, method of payments and access to the work etc.

@nurkamaliahmustaffa2013

SpecificationSpecification

It describes in detail the nature

quality and workmanship required in the work

method to be adopted in the

execution of the work

details of any special responsibility to be borne by the contractor

any detail which not covered in the General Condition of Contract

Details out the quality and standards expected of the works since the construction drawing are not able to graphically show the entire quality required. As such, it is essential for the specifications to be read in conjunction with the drawings in order to comprehend the full extent of the quality and standards required since the specifications will detail out the quality and standards of materials and workmanship required or expected of the works.

@nurkamaliahmustaffa2013

Bill of QuantityBill of Quantity

A list of items giving brief identifying descriptions

unit of measurement and estimated quantities of the

work comprised in a contract.

Source: KAMALALDIN ABD. LATIF (2010) JKR. MALAYSIA

@nurkamaliahmustaffa2013

Contract DrawingsContract Drawings

These indicate the location, scope and design complexity of the works

and show graphically the full extent of what is required to be constructed.

@nurkamaliahmustaffa2013

@nurkamaliahmustaffa2013

It is a formal offer to execute the contract works in accordance with the various contract documents for the contract price or tender sum

and the contract periodcontract period which the contractor is tocomplete the works. A performance bond performance bond is a surety bond (jaminan)

issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.

For example, a contractor may cause a performance bond to be issued in favor of a client for whom the contractor is constructing a building. If the contractor fails to construct the building according to the specifications laid out by the contract (most often due to the bankruptcy of the contractor), the client is guaranteed compensation for any monetary loss up to the amount of the performance bond.

Form of TenderForm of Tender

@nurkamaliahmustaffa2013