ESTIMATING & CONTRACT (BEC 402)

ESTIMATING & CONTRACT(BEC 402)Mohd Ashraf FatehDip. QS, Bsc. QS (Hons.), Msc. ICPM

Credit Hours

Evaluations and Marks Distribution60% Final Exam40% Carry MarksAttendanceTestAssignmentExercisePunctuality, Dress Code & AttitudeClass Representative/Asst. Class Representative

Calculator

Dimension Paper

SMM 2

Basic Math Formula

LECTURE INFORMATIONCOURSE LEARNING OUTCOME (CLO)CLOOUTCOMECLO 1to recognize the estimating methodCLO 2 to describe the procedures, flows and routine in tendering a project

CLO 3to differentiate the type of contracts in the construction industry

CLO 4to discuss the method of dispute resolution in construction.

To understand the basic principles in estimating and contract

To understand any works related to estimating and contract

To appreciate the tendering procedure

SUBJECT OBJECTIVESIntroduction of measurements principlesIntroduction to SMM2Standard method of measurement Measurement of Site ClearingMeasurement of Work Below Lowest Floor Finish (Substructure)Introduction of construction cost estimatingBuilding cost estimating methodsLaw of ContractStandard Forms and Types of Construction ContractTenderingDispute Resolution MethodPayment

LECTURE FRAMEWORKAhamad Abdullah (2003). Pengukuran Kuantiti Bangunan. 1st Edition, Pearson

Ahamad Abdullah (2006). Anggaran Kos Kerja Bangunan. 2nd Edition. Pearson

Bockrath, J., (2000). Contracts and the Legal Environment for Engineers and Architects, 6th. Edition, McGraw-Hill.

Hinze, J., (2001). Construction Contracts, 2nd. Edition, McGraw-Hill.Dearle and Henderson, (1988). Management Contracting, E&FN Spon, London.

Seely, Ivor H., (1987). Civil Engineering Quantities, 4th. Edition, MacMillan Education Ltd.

Bunni, N.G., (1991). The FIDIC form of contract, BSP Professional book, London.

Dearle and Henderson, (1988). Management Contracting, E&FN Spon, London.

Smith, R.C., (1986). Estimating and Tendering for Building Works, Longman Inc., New York.

Bockrath, J., (2000). Contracts and the Legal Environment for Engineers and Architects, 6th. Edition, McGraw-Hill.REFERENCESINTRODUCTION TO MEASUREMENT PRINCIPLES Why do we need to do a measurement/taking off?What is a Bill of Quantities?

Functions of Bill of Quantities:A part of document tender/contractAs a basis for a interim paymentAs a basis to evaluate variation orderTo assist in managing the project As a source of cost dataINTRODUCTION TO MEASUREMENT PRINCIPLES 8Prepared by QsA documents setting out in schedule forms where the quantities, descriptions and rates of the works to be undertakenThe tenderer need to price the BoQ

BILL OF QUANTITIES (BoQ)ADVANTAGES OF BILL OF QUANTITIES (BoQ)EQUIPMENT & INFOSMM 2Measurement equipment:Ball PenBlue/BlackRedDimension PaperScale RulerCalculatorGet all the math formula (all shapes)

STANDARD METHOD OF MEASUREMENT (GETTING STARTED)PROCEDURESPrepare taking off list & query listVerify all drawings & specificationPage title & numberSequence of jobsNEAT & TIDY!!!

Standard Method of Measurement of Building Works (Second Edition) (SMM 2)Timeline:1959 = SMM 1(Imperial Edition)SMM 4, 1948 (UK)1976 = SMM 1(Metric Edition)2000 = SMM 2SMM 6, 1979 (UK)

STANDARD METHOD OF MEASUREMENT (SMM 2)STANDARD METHOD OF MEASUREMENT (TAKING OFF LIST)NO.ITEMUNIT1.Concrete grade 30 in landing slab

M32.Formwork to soffits of landing slabM23.Main Bar Reinforcement in landing slabKG4Link, stirrups and binder in landing slabKG

STANDARD METHOD OF MEASUREMENT (QUERY LIST)

STANDARD METHOD OF MEASUREMENT (DIMENSION PAPER)An A4 paper Widely used during the 90sSTANDARD METHOD OF MEASUREMENTA : Timesing Column (Multiplying/Dividing)B : Dimension ColumnMeter (m) 1 dimension Meter Square (m2) 2 dimensionCubic Meter (m3) 3 dimensionItem / No. 1 dimensionC :Squaring ColumnD : Description Column & Side Cast

Item / No.Meter (m)Meter Square(m2)Cubic Meter (m3)LWT/DLWL

EXAMPLES OF DIMENSIONEXAMPLES OF TIMESING

STANDARD METHOD OF MEASUREMENT (DESCRIPTION) ITEMSMM REQUIREMENTDESCRIPTION1 BRICK WALLWork classification (G.1.1b)Type of brick (G.3.1a)Type of bonding (G.3.1b)Ratio and mixture of mortar (G.3.1c)Wall thickness (G.3.3)Class (G.3.3a)1 brickwall in common brick in cement and sand (1:6) mortar in English bond, load bearing wallSTANDARD METHOD OF MEASUREMENT (BRACKET)

STANDARD METHOD OF MEASUREMENT (SIDECAST)

STANDARD METHOD OF MEASUREMENT (ANOTATION)

STANDARD METHOD OF MEASUREMENT (DEDUCTION)

EVERYTHING NEED TO BE IN RED!!

STANDARD METHOD OF MEASUREMENT (CORRECTION)

STANDARD METHOD OF MEASUREMENT (SHORT FORMS) Ddt = DeductDitto = As mentioned aboveA.b.d = as before described

BASIC PRINCIPLES OF MEASUREMENTGIRTH / PERIMETER / AREA

Thick brickwallOuter Dimension

GIRTH / PERIMETER / AREA

MEASUREMENT OF SITE CLEARINGMEASUREMENT OF SITE CLEARINGSection DTwo ways to measured:D.2 D.6 (1st Method) Measured separately:UndergrowthHedgesTreesD.8 (2nd Method) Measured together but must stated area of the clearingMEASUREMENT OF SITE CLEARING

REFER TO CLAUSE D.8

MEASUREMENT OF SITE CLEARINGMEASUREMENT OF SITE CLEARING

BILL OF QUANTITIES (BoQ)

BILL OF QUANTITIES (FINAL SUMMARY)

MEASUREMENT OF WORK BELOW LOWEST FLOOR FINISH (WBLFF)

MEASUREMENT OF WBLFF

Any works under ground floor slab is called substructure or Work Below Lowest Floor Finish (WBLFF)Consist of :ExcavationLean/Concrete BlindingFoundationColumn StumpGround BeamHardcoreDamp Proof MembraneGround floor slab/bed

GENERAL RULES FOR MEASUREMENT OF EXCAVATIONTypes of excavation:Top Soil (compulsory to all excavation)Reduce level (compulsory to all excavation)Pit excavationTrench excavationD.15 keeping the excavation free of water (compulsory to all excavation)

GENERAL RULES FOR MEASUREMENT OF EXCAVATIONSection DD.10 depth classificationMax depth n.e 0.25mMax depth n.e 1.00mMax depth n.e 2.00mMax depth n.e 4.00mAnd thereafter in 2.00m stagesD.11 starting level

EstimateDowngrades the variables on factors of estimationAsk for a addition fundsStop/postpone the project

Estimate > Actual BudgetProceed accordingly as planUpgrades the variables on factors of estimationBUILDING COST ESTIMATING METHODSPreliminary StageUnit MethodVolume MethodGross Floor Area (GFA)

Detail StageApproximate Quantity Method

BUILDING COST ESTIMATING METHODSAlso known as Cost According to Building FunctionRelated with the occupancy Advantages:Easiest & Fastest methodCan be done without any single drawingDisadvantages:Too gross (not accurate)Only can be used for:a standard designrelated to occupancy building UNIT METHODMultiplying the amount of occupancy with the unit price/occupancy.Estimation of a School Building:Occupancy = 1000 studentsUnit price/occupancy = RM 1,500/studentsTherefore, total estimate for a School Building is:= Total occupancy x Unit price/occupancy= 1000 students x RM 1,500= RM 1,500,000.00 UNIT METHOD (CALCULATION)Use widely back in the 90sUsually used for estimating building services componentsAdvantages:FastDisadvantages:Too grossCant help architect much in designingDifficult to get the similar past data cost

VOLUME METHODVOLUME METHOD(CALCULATION)Multiplying the volume (m3) of building with the unit price/volume (m3)

Estimation of a School Building:Volume of Building = Length x Width x Height = 20m x 10m x (1.00m+3.50m+3.50m+0.60m) = 1720m3Unit price/m3 = RM 550/m3Therefore, total estimate for a School Building is:= Volume (m3) x Unit price/volume (m3)= 1750m3 x RM550/m3= RM 946,000.00

VOLUME METHOD(CALCULATION)The most popular in MalaysiaPlenty of cost data in the industriesAdvantages:Easy to understand by architect and clientFast Wide range of data costDisadvantages:Doesnt consider overall design of the building Plenty of variables need to be consider Need to differentiate certain area:Ventilation / CirculationArea doesnt bring profit

GROSS FLOOR AREA (GFA) METHODGROSS FLOOR AREA (GFA) METHOD (CALCULATION)Multiplying the GFA (m2) of building with the unit price/GFA (m2)

Estimation of a School Building:GFA of Building = Length x Width (29,756.25m2)Unit price/m2 = RM 1500/m2Therefore, total estimate for a School Building is:= GFA (m2) x Unit price/GFA (m2)= 29756.25m2 x RM1500/m2= RM 44,634,375.00

GROSS FLOOR AREA (GFA) METHOD (CALCULATION)The best method Most accurateAdvantages:Help architect in design processEasy to make variation/changes in the futureMost accurateDisadvantages:Time consumingPlenty of data needed

APPROXIMATE QUANTITY METHODAPPROXIMATE QUANTITY METHOD (CALCULATION)Quantity need to be calculated grossly for each itemUnit price is based on CURRENT RATES Need to allow some % for unmeasured items

APPROXIMATE QUANTITY METHOD (CALCULATION)

APPROXIMATE QUANTITY METHOD (CALCULATION)

APPROXIMATE QUANTITY METHOD (CALCULATION)SUMMARYMETHODPHASE OF PROJECTKEY NOTESUNITUnitPreliminariesFeasibility StudyOccupancyTo plan Project CeilingCost/occupancyCost/studentCost/bedVolumeBrief ProposalUsually used to calculate building services spaceCost/m3GFABrief ProposalWidely used & very popular

Cost/m2Approximate QuantityDetail DesignWidely used & very popularUsed for complex projectTime consumingAs per items unitMM2M3Estimation of a School Building:Occupancy = 2000 studentsUnit price/occupancy = RM 2,500/students2000 x RM 2,500 = RM5,000,000.00

EXERCISE NO. 1(Unit Method)EXERCISE NO. 1 (Volume Method)Estimation of a School Building:Volume of Building = Length x Width x Height = 20m x 10m x (1.00m+5.00m+5.00m+0.60m) = 2320m3Unit price/m3 = RM 600/m32320m3 x RM 600/m3RM 1,392,000.00

EXERCISE NO. 1 (GFA)Estimation of a School Building:GFA of Building = Length x Width Unit price/m2 = RM 2000/m2Therefore, total estimate for a School Building is:= GFA (m2) x Unit price/GFA (m2)= 62500m2 x RM2000/m2= RM 125,000,000

ASSIGNMENT NO. 1In a group of 4Write a detail report on: The Application of Information Technology in EstimationTopics to cover:History/OriginFeatures of the softwareAdvantages/DisadvantagesComparison between using Manual & Software Estimation in term of:TimeQualityCostSUBMIT THE REPORT ON THE NEXT CLASS (23RD APRIL 2012)CONTRACTINTRODUCTION TO THE LAW OF CONTRACTAn agreement enforceable under law. The agreement legally binding between two parties or more, provided that certain conditions are observed (Contract Act, 1976)Types of contract:Simple contractSpecial contractSIMPLE CONTRACTA contract will exist when:

the parties involved reached an agreement

legally recognized rights, responsibilities that arise from that agreement.

Constituted by an offer made by 1 party (offeror) and its acceptance by the other party (offeree) supported by consideration.

OFFERACCEPTANCESUPPORTED BY CONSIDERATIONSIMPLE CONTRACTBack in 90s, most of the construction law is a simple contract

Simple contract can be form by:WrittenVerbalAction by parties involve (offer and acceptance)

Validity for 6 years

SIMPLE CONTRACT

SPECIAL CONTRACTA document signed, stamping and given to all the parties involvedStart widely used in the Government Sector Need to be in form of writtenValidity for 12 years

OFFERACCEPTANCESUPPORTED BY CONSIDERATIONSPECIAL CONTRACT

GENERAL PRINCIPLES OF THE LAW OF CONTRACTELEMENT OF CONTRACTINTENT - Both parties wish to make the contract and ready to face the consequence if the contract breachFREE WILL All agreement & discussion is made on free will. There are no blackmail or treats involved CAPACITY Both parties involved is eligible & capable to be in a contractLEGAL all the contract need to follow common lawSPECIFIC all information in the contract need to be specific. There is no room for ambiguity & unclear itemOFFER & ACCEPTANCEOFFER(OFFERER)ACCEPTANCE(OFFEREE)Must be firm, certain & communicated to the offereeValid if described as an estimate (Crowshaw v Pritchard, 1899)Maybe withdrawn at any in before acceptance (Routledge v Grant 1828)Withdrawal of an offer takes place when notice received by offeree (Routledge v Grant 1828)Maybe made to specific person, group of people or even public (Carlill v Carbolic Smokeball Co., 1893) Must be unconditional and must be communicated to the offererMust be made within a reasonable reason/timeManner of acceptance must correspond with the manner prescribed by the offerCannot be withdraw without the consent of the offerer (Routledge v Grant 1828)If the offeree inserts new terms, then it is counter offer (destroy the original offer) (Davies & Co. Shopfitters Ltd v Wiliam Old, 1969)A request for further info doesnt count as counter offer (original offer remains)

CONSIDERATIONSome right / interest / profit or benefit accruing to one party or some forbearance /detriment / loss / responsible given, suffered or undertaken by the other

In forms of:Thing/goodsService/performance of workPayment

Williams v Roffey Bros, 1990

CONTRACTORCLIENTPAYMENTSERVICECOUNTER OFFERDavies Shopfitters v Wiliam Old, 1969Contractor ask quotation fromsupplier supplier give Quotation to contractor Offer by supplier to contractorContractor ask quotation fromsupplier supplier give quotation to contractorContractor amend some ofthe quotation and return backto the supplier Counter offerby contractorto supplierCONTENTS OF A CONTRACT(EXPRESS & IMPLIED TERMS)All contents in a contract describes rights and obligations of parties under the contractThe court doesnt make the contract for the parties. The parties made for themselves. The court function is to interpret and apply the contract to the parties involvedTwo types of terms:ExpressImplied

EXPRESS TERMSContract sometimes have been reduced from pure sentences to any kind of forms. Anything that expressly stated & incorporated in the contract.Examples:AppendixDrawingsSchedulesSpecificationsBills of QuantityDavis Contractors v Fareham, 1956IMPLIED TERMSNot expressly stated (in writing or verbally) at the time the contract is made but are implied in lawExamples:The contractor will do the work in a workmanlike manner (with proper skill and care). He will proceed with reasonable diligence and complete within agreed time with good and proper materials

The client will give possession of the site and will supply all necessary details within reasonable time. He will not obstruct the contractor works and will pay reasonable sum for the progress of works

Trollope & Colls v NWMRHB, 1973

Lynch v Thorne, 1956STANDARD FORMS OF CONSTRUCTIONS CONTRACTSTANDARD FORM OF CONTRACTA printed form of contract containing standards conditionsExample:PAM 2006PWD 203, 203A, DBCIDBFIDICIt can be amended in any way the parties chooseComprises of :Articles of AgreementCondition of ContractAppendix

STANDARD FORM OF CONTRACTAdvantages (Wright, 2004):Well known & widely usedSave time & effort in negotiating, drafting new conditionsCan be tailored to match the project Mistakes maybe avoided Disadvantages (Wright, 2004):Designed for a standard situationEvery contract is differentWe can make mistake over and over again

STANDARD FORM OF CONTRACT (ARTICLES OF AGREEMENT)Sets out:Names of the parties to the contractLocation & scope workExpress agreement by contractor & clientPersons who carry out respective functions:ArchitectEngineerQsSpace for attestation (for signatures of parties & witnesses)

STANDARD FORM OF CONTRACT (CONDITIONS OF CONTRACT)Sets out:The normal performance required from each partyRules and procedures for conduction the contractRules on dealing with problems or disputes ariseTerms of payment to the contractorImportant to ensure there are no conflicts with others documents the contracts

STANDARD FORM OF CONTRACT (APPENDIX)It is a summary of facts of the contract:Contract PeriodCompletion DateDefect Liability PeriodRates of The Liquidated Damages

CONTRACT FORMATIONNO. 1NO. 3NO. 2TYPES OF CONSTRUCTIONS CONTRACT

EMPLOYERS INVOLMENT IN CONSTRUCTIONSSome employer do get involved / some prefer to stay awayIf minimal involvement Traditional Contracting If greater involvement Construction Management DESIGN & MANAGEMENT SEPARATIONDesigning & Managing a project is two different activitiesEmployers may have various preferences:Different Parties designing & managingSame parties designing & managing Different Parties Traditional ContractualSame Parties Construction Management / Package Deal

FLEXIBILITY OF CHANGEReasons of changing:Change in user requirements, rethinksRevision / refinement of design due to incomplete information,discripencies, unclaritiesChanges due to external factorsFlexible in change Construction ManagementInflexible in change Package Deal

CLARITY OF EMPLOYER CONTRACTUAL REMEDIESNature and extent of the remedies available to employer if breach happenswho to blame?!Package Deal / Construction Management - Single point responsibilityTraditional Contractual Varies point of responsibilities PROJECT COMPLEXITYTypes of complexity:TechnicalFunctionalOrganizational Activities/Processes Simple Moderately complex = Package DealMid range complexity = Traditional ContractualComplexity = Constructions Management

DURATION OF CONTRACTBeing primary criteria influencing the procurement decisionFast = Construction ManagementSlow = Traditional Contractual CERTAINTY OF PRICEAs a confirmation of total financial outlay/commitment requiredWhy it is important to client:His financial exposureWhether is budget met or exceeded:Need to:secure additional fund Cost cutting arisesThe planning of financial disbursement (cashflow)Late Confirmation = Construction Management Contractual Fast Confirmation = Traditional Contractual

TRADITIONAL GENERAL CONTRACTTRADITIONAL GENERAL CONTRACTSThe most oldest, familiar types of contract in industry The origin is from UK where:the fast growth of professional consultant at that timeA lots of bulk government projectORGANIZATION STRUCTURE

NATURE & CHARACTERISTICSThe separation of design from building:Employers have his own design teamThe contractor only builds/manufacture what the designers specified Design = Employer/Professional Team responsibilitiesConstruction = Contractor responsibilities

APPLICATIONWhere the design is totally complete before selecting contractorWhere an independent project team will be used Where employer required certainty of price

PACKAGE DEAL CONTRACT

PACKAGE DEAL CONTRACTThe fastest growing method in the countryUsually in lump sum basisDesign & Build type:Most FamousContractor undertakes:DesignConstructionClient:FinancingApprovals Turnkey type:Contractor undertakes everything:FinancingApprovalsDesignConstructionEmployer is getting the key at the end of the project

APPLICATIONWhere client wants a single responsibility partyWhere project is novel and complex.Where client want the price certainty (Lump Sum)MANAGEMENT CONTRACTINGMANAGEMENT CONTRACTINGOriginated in the west as the 1920sEnter Malaysia around 80sa form of contractual arrangement whereby a contractor is paid a fee to manage the project on behalf of clienta contract to managerather than a contract to buildThe management contractor undertakes:Planning / programming all stages / activities of projectContribute his expertise / experience on buildability to design processCoordination, time, costs and quality over works contractorThe works is packaged by the management contractor and sub it out to work contractor who actually undertake the actual works (construction)

APPLICATIONIn complex project involve high tech and need greater flexibility in designWhere the project is too large Where employers to capitalize involvement of large number of sub con

ASSIGNMENT NO. 2In a group of 4

Write a detail report on: TYPES OF CONSTRUCTIONS CONTRACT(Traditional, Package Deal, Management)

Each group need to:Conduct an interview & discussion with any company personnel / organization

Topics to cover:Get a case study on the type of construction contractHow they decide & what are the criteria they look into Why they used that typeAdvantages & DisadvantagesChallenges, Solutions and Recommendations

SUBMIT THE REPORT (SOFT & HARD COPY) ON (30th JANUARY 2013)TYPES OF TENDERING PROCEDURESPrimary purpose of tendering:To select suitable contractorObtain an offer from contractor

TENDERING

Contractor A (Offering)Contractor B (Offering)Contractor C(Offering)Client (Selecting & Accepting)

TENDERINGPROCESS OF A PROJECT CYCLEOPEN TENDERMain procedure by the Government & PrivateKnown as an indiscriminate request for tenderersInvitation to treat is used to invite the tendererInvitation can be:To the world at largeTo contractors having the eligibility

OPEN TENDEROPEN TENDERSELECTIVE TENDERAlternatives method to address the limitations of the open tendering procedureOnly Limited number of contractors are prequalified / pre-selected are invited to submit their bidsUsage this method:Making tendering procedure more manageableImprove quality of the bids receivedUrgency of the worksSpecific reason COMMON CRITERIASELECTIVE TENDERSELECTIVE TENDERNEGOTIATIONSAlso known Direct NegoCommon method in the East, before open tender is practiced Widely spread as an aspects of human activity Fundamental elements:No competition Final outcome through mutual consent / agreement

NEGOTIATIONSNEGOTIATIONSTENDER DOCUMENTATION

DISPUTE RESOLUTION METHODWHAT IS A DISPUTE?Disputes arises when one party makes a claim against the otherand the other party denies liability either expressly or by conduct

Root causes which generates disputes in construction:Unrealistic time/cost/quality by clientUncontrollable external eventsUnrealistic tender priceInappropriate contract typeLack of professionalism of project participationClients lack of informationInternal disputesInadequate contract documentsInaccurate design informationExaggerated claims

WHAT IS DISPUTE RESOLUTION?Dispute may be resolved by using:Formal processCourts/Litigation (judge)Arbitration (arbitrator)

Informal or consensual processes (Alternative Dispute Resolution) Parties attempt to reach an agreementIn sense of alternative (or complementary) to formal processNegotiationMediationConciliationNeutral EvaluationAdjudicationDEGREE OF FORMALITY

LitigationLITIGATIONLITIGATIONa process of resolving a legal dispute in court and heard in public

Begins with a plaintiff issuing writ to defendant (lodging a written claim to court)

Involve:Oral argumentDiscovery documents or evidencesExamination of witness & evidence

It is subject to any appeals

Judgment can enforced against the defendant personally or his assets

Decision based on:Evidence presentedApplication of relevant legislation and precedent cases

Factors to choose litigation:Substantial legal issuesProceedings are multi partyProceedings difficult to controlAllegations of dishonestyOne party refuses to acknowledgeLITIGATIONAdvantages:A legally qualified judgeThe doctrine of judicial precedent will be applied by the judgeA binding decisionJudgments can be enforced through courts if necessaryTheres an appeal system

Disadvantages:Very public, expensive, time consuming and complicatedNot suitable for technical issuesLawyers is necessaryParties have no control over the proceedingsCould ruin business relations between partiesRisk that a party may lose the caseLimited international enforceability of judgments

ARBITRATIONARBITRATIONwhere parties in dispute agree to settled by a neutral person, arbitrator (3rd party) and bound by that decision

Provision of the Arbitration Act 2005 (Act 646)

Each side will forward their agruementarbitrator need to find fact & apply the law & grant to both parties

Can be agree on pre or once the disputes arise

Arbitrator can be:Chosen by contract partiesAlready being appointed during contract formation

More flexible/less formal compare to litigation, parties free to:Select arbitratorChoose venue, time of procedures

Parties can be represented by lawyer or other person

Decision of arbitrator expressed as an award & will bind both parties. If necessary, it may be enforced by court.

They will be no appeal from the decision

Cost of arbitration (including the arbitrators fee)Paid by parties in proportions they have agree ORUsually bear by the winnerARBITRATIONEssential element of arbitration:There are dispute between to partiesThey agree to refer to arbitration Parties must agree the decision is final & binding

Usage:Subject matter of dispute is highly technicalWhether insurance company is liable in full or apartReceiving a binding opinion is relevant Where parties wish to avoid negotiations Where a matter involves the quantification of dispute

Differ with others ADRGoverned by Arbitration Act 2005Arbitrator cannot be sued for negligence

ARBITRATIONAdvantagesPrivacyConvenienceSpeed Less formalBusiness relationshipExpertise of the arbitratorFinalityInternational recognition

Disadvantages No collection of precedentsUnderstanding the lawCostsPoint of lawEnforcement1 dispute per hearingNo 3rd parties involvement

ARBITRATORInternational arbitration needs 3 arbitratorDomestic arbitration needs only 1 arbitratorAppointing arbitrator:Parties can agreed on one nameUsually the president of professional institutions (PAM, IEM or RISM) will be appointedIf fails, may request High Court for the appointmentsSelection criteria:Any qualifications specified by partiesIndependent and impartialFor international arbitration, may consider arbitrator of a nationality other than those partiesARBITRATORMust act judicially

Have to:Find factsTaking account only argument forward by partiesApply law & makes decision

Arbitrator can terminate the proceedings if parties fail:to comply with arbitrator directionsParticipate in proceedings

Arbitrator is not liable for anything done unless acting in bad faith (dishonest, malice)

ARBITRATORIf parties not satisfied with arbitrator, can remove him.Give notice to:Other partyArbitratorApply to court

Ground for removing/replacing arbitrator:Impartially biasLack of qualificationsFails to perform the function THE PROCESSTHE AWARD The decision of arbitrator is also known as the award.

The award can be:FinalInterimPartial

Usually arbitrator will deals with issues liability then the quantum of claim

Award shall be in writing and delivered to each party after arbitrator sign it

It must deal with all issues that were subject to the dispute

Content of award:Who is successful partyAmount of damages that have been awarded

Award must:Be in writing and sign by arbitratorArbitrators justification on the decisionComplete with dates, location of the arbitration PAYMENTIMPORTANCE OF PAYMENTINTRODUCTIONIt is clients main obligations to pay the contractor in consideration of the execution & completion of the works by contractor

All payment need to be done according to conditions of contract

Adv. PaymentStart ProjectInterim PaymentCompletion ProjectFinal PaymentEnd of ProjectADVANCE PAYMENTADVANCE PAYMENTThe 1st payment by client to the contract BEFORE the work start

Main Contractor entitled to receive either:25% of builders work OR RM10,000,000 max

NSC entitled:20% of builders OR RM5,000,000 max

Builders work = Contract Sum (PC Sum + Prov. Sum + Contingencies Sum)ADVANCE PAYMENT (CALCULATION)

THE RECOUPMENTIt will be recoup in interim payment

Recoupment starts when value of Builders Works reaches 25%

When reaches 75%, full recoupment will be made.

INTERIM PAYMENTINTRODUCTIONThe contractor entitled to interim payment at regular interval with a proper evaluationPayment will done based on:Work doneMaterial on site

Start ProjectCompletion ProjectEnd of ProjectInterim PaymentTHE PROCESS< 14 days< 30 daysCONTRACTORS CLAIMSEven if the contractor doesnt make any claims that month, client still need to make a valuation

It is a good practice to set a specific date on each month to do the valuation

All claims need to be in proper & agreed formats

Wrong estimate/calculation by contractor will not be cancel

Contractor should include everything he thinks is entitled to be paid

Client can reject the claims due to insufficient info and ask to resubmit

VALUATIONThe evaluation need to be carried out once a month to evaluate:Progress work doneMaterial on site

For Government project, the value of progress work done+material on site need to exceed RM1,000, then only payment can be made

Method of payments:Lump SumPercentage work donePro-rate

METHOD OF PAYMENT

MATERIAL ON SITEContractor entitled to payment for all unfixed material delivered to site but not yet incorporated in the work

Material on site must not be removed without consent of client. Contractor is responsible for the safety etc

Prerequisite for payment:Material delivered to siteMaterial will be used in the permanent works (accordance to contract)Not prematurely brought to siteAdequately protected, stored against theft, whether or other casualtiesContractor have paid everything to supply (contractor need to produce a prove)

Contractor will be paid 90% of the material value.CALCULATION

COMMON DISPUTESFINAL PAYMENTINTRODUCTIONUsually call final account

The last payment:From client to contractorFrom contractor to client

It will shows the final total cost of the completed job to client.

This final total cost = original contract sum + adjustment for variation works + provisional quantites + other adjustments made

Usually the amount is not much cause all payment have been made through interim payment

This will allows client to make final correction/adjustment made through the interim payment (if necessary)

THE PROCESS< 30 days

THE EFFECTSAs a evident that the works have been properly carried out and completed

All responsibilities of the works being transferred to client

As a evident all adjustment in term of monetary have been made.

Sheet1AREALength24.00less brickwall-0.45TOTAL LENGTH23.55

Width10.00less brickwall-0.45TOTAL WIDTH9.55

TOTAL AREA224.90

Sheet2

Sheet3

Sheet1(metre)Length24.00Less brickwall-0.23Width10.00Less brickwall-0.23Total for 1 set33.54

Total for overall67.08

Sheet2

Sheet3

Sheet1PERIMETER / GIRTH(metre)Length24.00Length24.00Width10.00Width10.00Total for overall68.00

Sheet2

Sheet3

girth 1(meter)Length24.00Less outer angle-0.25Less outer angle-0.25Width10.00Less outer angle-0.25Less outer angle-0.25Total for 1 set33.00

Total for overall66.00

girth 2(metre)Length (2 x 24.00)48.00Width (2 x 10.00)20.0068.00add recess (2 x 4.00)8.00TOTAL76.00

Sheet3

PAD+GB+HARDCORE+CONC BEDDIMENSION PAPERELEMENT : WBLFF (PAD FOUNDATION, GROUND BEAM, CONC BED)PAGE : 1 OF 3DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

Length Length 7.2007.200add 2 corners (2 x 0.625)1.250less 2 col stump (2x0.3)-0.6008.4506.600

WidthDepth7.2000.500add 2 corners (2 x 0.625)1.250lean concrete0.0258.4500.52548.45Excavation to remove top soil average depth 100mm6.60Excavate trench to receive ground beam starting from reduce level max depth n.e 0.25m8.450.150.53DepthConcrete bed0.125hardcore0.150Allow for keeping the surfaces of the site & excavation free of surface water0.275Itemless top soil-0.1000.175

8.45Excavate to reduce level max depth n.e 0.25mConcrete grade 7 blinding n.e 100mm thick laid on earth 8.450.184Depth1.25(Pad Foundation)lean concrete0.0301.25footing0.3000.03column stump0.7501.080446.6(Ground Beam)1.25Excavate pit to receive pad footing starting from reduce level max depth n.e 1.50m0.151.250.031.0841.25Reinforced insitu concrete Grade 20 in isolated foundation Bases (Pad Foundation), in 4 nos1.250.30

40.30Reinforced insitu concrete Grade 30 in isolated column stump0.300.75DIMENSION PAPERELEMENT : WBLFF (PAD FOUNDATION, GROUND BEAM, CONC BED)PAGE : 2 OF 3DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

Pad Foundation (Length)Girth1.250Length1.250less 2conc cover(2 x 0.04)-0.080Length1.2501.170Width1.2502 bends (2 x 0.30)0.600Width1.2501.7705.000less 2conc cover(2 x 0.04)-0.0801.6904Formwork to edges/sides of pad foundation exceeding 250mm - 500mm high5.00Ground Beam(Length)7.200less 2conc cover(2 x 0.04)-0.080Girth7.120Sides of column stump 2 bends (2 x 0.30)0.600(4 x 0.30)1.2007.72041.20Formwork to edges/sides of isolated column stump12mm diameter high tensile steel reinforcement in straight & bend bars in foundation :0.75

442106.60Formwork to ground beam exceeding 250mm & n.e 500mm high1.69(Pad Foundation)

447.72(Ground Beam)

DIMENSION PAPERELEMENT : WBLFF (PAD FOUNDATION, GROUND BEAM, CONC BED)PAGE : 3 OF 3DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

Length/WidthGround Beam (Girth)7.2001.300less 2 col stump-0.600less 8 conc cover-0.3206.6000.980hook (24 x 0.008)0.1926.60Filling up to make up level average 150mm thick with hardocre of clean hard broken stones obtained off site1.1726.604288mm diameter mild steel reinforcement in stirrups in ground beams1.1726.60Polythene not less than 1000 gauge horizontal d.p.m lapped 10mm at joints laid on hardcore6.60

Lengthpad0.300col stump0.7506.60Concrete grade 20 in bed 100mm - 150mm thick laid on hardcorelap in col0.5006.601.5500.13less conc cover-0.4001.150bend0.2001.3504820mm diamter high tensile steel reinforcement in straight & bend bar in isolated column1.35

GirthGirth overall1.200less 8 conc cover-0.3200.880hooks (24 x 0.008)0.19241.07261.078mm diameter mild steel reinforcement link in isolated column stump

TAKING OFF LISTELEMENT : WBLFF (PAD FOUNDATION, GROUND BEAM, CONC BED)NO.ITEMUNIT1EXCAVATE TO REMOVE TOP SOILM22EXCAVATE TO REDUCE LEVELM33EXCAVATE PIT TO RECEIVE PAD FOUNDATIONM34EXCAVATE TRENCH TO RECEIVE GROUND BEAMM35KEEPING SITE & EXCAVATION FREE FROM WATERITEM6CONCRETE BLINDING FOR PAD FOUNDATION & GROUND BEAMM37CONCRETE GRADE 20 FOR PAD FOUNDATIONM38CONCRETE GRADE 30 FOR COLUMN STUMPM39FORMWORK FOR PAD FOUNDATIONM10FORMWORK FOR COLUMN STUMPM211FORMWORK FOR GROUND BEAMM1212MM REINFORCEMENTFOR PAD FOUNDATION & GROUND BEAMM (KG)138MM REINFORCEMENT FOR GROUND BEAMM (KG)1420MM REINFORCEMENT FOR COLUMN STUMPM (KG)158MM REINFORCEMENT FOR COLUMN STUMPM (KG)16HARDCOREM217DPMM218CONCRETE BEDM3QUERY LISTELEMENT : WBLFF (PAD FOUNDATION, GROUND BEAM, CONC BED)NO.QUERIESASSUMPTIONSREMARKS1Material & Source of hardcoreHard broken stones & off siteConfirmed with Site Engineer

2Method to keeping site & excavation free from waterBy PumpConfirmed with Site Engineer

3Thickness of excavate top soil100mm deepConfirmed with Site Engineer

4Thickness of Concrete Cover40mm thickConfirmed with Site Engineer

5Grade of Lean/Concrete BlindingGrade 7Confirmed with Site Engineer

6Grade Concrete for footings, ground beams, bedGrade 20Confirmed with Site Engineer

STRIPDIMENSION PAPERELEMENT : STRIP FOUNDATIONPAGE : 1 OF 3DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

LengthArea B4.500Length2.5004.5005.00012.000Widthfoundation spread0.7254.50012.725Area C WidthLength2.5004.5003.0001.000Width1.0004.5007.500foundation spread0.72512.73Excavation to remove top soil average depth 100mm8.2258.23

2.00(Ddt Area A)2.50

Ddt4.50(Ddt Area B)4.50

4.50(Ddt Area C)4.50DepthConc bed0.150hardcore0.200Area A0.350Lengthless top soil-0.1502.5000.200less 2 fdn spread 12.73(2 x 0.250)-0.5008.23Excavate to reduce level max depth n.e 0.25m2.0000.202.00Width2.50(Ddt Area A)2.5000.15less fdn spread-0.2504.50(Ddt Area B)add fdn spread0.2504.502.5000.15(Ddt Area C)4.504.500.15DIMENSION PAPERELEMENT : STRIP FOUNDATIONPAGE : 2 OF 3DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

Girth2Length12.00042.65Formwork to edges & faces of foundation exceeding 250mm & n.e 500m highWidth7.500Total 1 Set19.500

Total for 2 set39.000Heightless 4 corners (4x0.225)-0.9001.57538.100add above ground0.150add 2 insets(2x2.500)5.0001.72543.100less 2 walls(2x0.225)-0.45042.651 brickwall in common brick in cement & sand (1:3) mortar in English Bond in Foundation42.6501.73

Depth0.050Length0.2504.5001.5752.5001.8755.000less top soil-0.15012.000less red level-0.200less 2 brickwall (2x 0.225)-0.4501.52511.550

42.65Excavate trench to receive foundation starting from reduce level max depth n.e 2.00mWidth0.732.5001.533.0001.0001.000Allow for keeping the surface of the site & excavation free of surface water7.500Itemless 2 brickwall (2x 0.225)-0.4507.050

42.65Concrete Grade 7 blinding n.e 100mm thick laid on earth0.730.05

42.65Concrete Grade 20 in foundation in trench0.730.25

DIMENSION PAPERELEMENT : STRIP FOUNDATIONPAGE : 3 OF 3DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

Filling to make up level average 200mm thick with hardcore of clean hard broken stones obtained off site225mm wide horizontal d.p.c of single course hessian based bitumen felt to B.S 743 ref. A lapped 100mm at joints bedded on cement & sand mortar44.0011.557.05&LengthPolythene not less than 1000 gauge horizontal d.p.m lapped 100mm at joints laid on hardcore4.5003.5004.00012.0002.00(Ddt Area A)less 2 brickwall (2x0.225)-0.4502.5011.550

4.50(Ddt Area B)Width4.502.5003.0004.50(Ddt Area C)1.0004.501.0007.500Girthless 2 brickwall(2x0.225)-0.4504.0007.0501.0003.50011.55Concrete Grade 20 in bed exceeding 100mm & n.e 150mm thick laid on hardocre1.0007.054.5000.153.0002.5002.00(Ddt Area A)4.5002.502.5002.5004.50(Ddt Area B)2.5004.505.0002.5004.50(Ddt Area C)3.0004.501.0001.00044.000

TAKING OFF LISTELEMENT : STRIP FOUNDATIONNO.ITEMUNIT1EXCAVATE TO REMOVE TOP SOILM22EXCAVATE TO REDUCE LEVELM33EXCAVATE TRENCH TO RECEIVE FOUNDATIONM34KEEPING SITE & EXCAVATION FREE FROM WATERITEM5CONCRETE BLINDING GRADE 7M36CONCRETE GRADE 20 IN FOUNDATIONM37FORMWORK FOR FOUNDATIONM81 BRICKWALL IN FOUNDATIONM (KG)9HARDCOREM210DPMM211DPCM312CONCRETE BEDQUERY LISTELEMENT : STRIP FOUNDATIONNO.QUERIESASSUMPTIONSREMARKS1Material & Source of hardcoreHard broken stones & off siteConfirmed with Site Engineer

2Method to keeping site & excavation free from waterBy PumpConfirmed with Site Engineer

3Thickness of excavate top soil100mm deepConfirmed with Site Engineer

4Grade Concrete BlindingGrade 7Confirmed with Site Engineer

5Grade Concrete for FoundationGrade 20Confirmed with Site Engineer

SITE CLEARINGDIMENSION PAPERELEMENT : EXCAVATION & EARTHWORK (SITE CLEARING)PAGE : 1 OF 1DIMENSIONDESCRIPTIONDIMENSIONDESCRIPTION

Gross Arealength50.00width70.003500.00

Deduct Area (Triangle)1/20.50Base25.00Height70.00875.00

Nett AreaOverall3500.00Deduct Triangle-875.002625.00

Cutting down trees & clearing site undergrowth, bushes, scrub and hedges & grubbin up their roots & filling voids left by removal roots with selected material arising from material (in 2625 m2)Item

TAKING OFF LISTELEMENT : EXCAVATION & EARTHWORK (SITE CLEARING)NO.ITEMUNIT1Site ClearingItemQUERY LISTELEMENT : EXCAVATION & EARTHWORK (SITE CLEARING)NO.QUERIESASSUMPTIONSREMARKS1Material to filling voids after site clearingSelected Material arising from excavationConfirmed with Engineer & Architect

Sheet120.000.603.5010.003.50PLAN VIEW1.00SECTION VIEW

Sheet2

Sheet3

Sheet120.000.603.5010.003.50PLAN VIEW1.00SECTION VIEW

Sheet2

Sheet3

volume20.000.603.5010.003.50PLAN VIEW1.00SECTION VIEW

gfa172.50172.50PLAN SECTION

Sheet3

Sheet1DESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)Half Brick wall / m2Half brickwall in cement and sand (1:3) including plastering and two coats emulsion paints both side= RM 28.0028.00Plastering Both Side/m2M25672.454,057.20= RM 12.00 x 224.0018.50Painting Both Side/m23.0055.50Wall A)= RM 8.50 x 217.0069.00Allowance for stiffener@ 5%3.45TOTAL RATES72.45EXCAVATION, HARDCORE, DPM & CONCRETE BEDDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)400mm thick excavationExcavation to reduce level 400mm and remove surplus, lay 200mm thick hardcore, DPM, and 200mm thick concrete (grade 30) Bed& disposal5.00200mm hardcore7.00M21351663.00200mm thick concrete(Grade 30)36.007.501.7513.13Area A)DPM3.00TOTAL RATES51.00ITEMDESCRIPTIONUNITQTYRATEAMOUNT(RM)(RM)AExcavation, Hardcore, DPM, and concrete bed663.00BHalf brickwall, plastering and painting4057.20Sub-total4720.20AddCSundry items @ 10%472.02TOTAL BUILDING ESTIMATE5192.22

Sheet2

Sheet3

Sheet1DESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)Half Brick wall / m2Half brickwall in cement and sand (1:3) including plastering and two coats emulsion paints both side= RM 28.0028.00Plastering Both Side/m2M25672.454,057.20= RM 12.00 x 224.0018.50Painting Both Side/m23.0055.50Wall A)= RM 8.50 x 217.0069.00Allowance for stiffener@ 5%3.45TOTAL RATES72.45EXCAVATION, HARDCORE, DPM & CONCRETE BEDDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)400mm thick excavationExcavation to reduce level 400mm and remove surplus, lay 200mm thick hardcore, DPM, and 200mm thick concrete (grade 30) Bed& disposal5.00200mm hardcore7.00M21351663.00200mm thick concrete(Grade 30)36.007.501.7513.13Area A)DPM3.00TOTAL RATES51.00ITEMDESCRIPTIONUNITQTYRATEAMOUNT(RM)(RM)AExcavation, Hardcore, DPM, and concrete bed663.00BHalf brickwall, plastering and painting4057.20Sub-total4720.20AddCSundry items @ 10%472.02TOTAL BUILDING ESTIMATE5192.22

Sheet2

Sheet3

Sheet1BRICKWALL, PLASTERING & PAINTINGSDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)Half Brick wall / m2Half brickwall in cement and sand (1:3) including plastering and two coats emulsion paints both side= RM 28.0028.00Plastering Both Side/m2M25672.454,057.20= RM 12.00 x 224.0018.50Painting Both Side/m23.0055.50Wall A)= RM 8.50 x 217.0069.00Allowance for stiffener@ 5%3.45TOTAL RATES72.45EXCAVATION, HARDCORE, DPM & CONCRETE BEDDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)400mm thick excavationExcavation to reduce level 400mm and remove surplus, lay 200mm thick hardcore, DPM, and 200mm thick concrete (grade 30) Bed& disposal5.00200mm hardcore7.00M21351663.00200mm thick concrete(Grade 30)36.007.501.7513.13Area A)DPM3.00TOTAL RATES51.00ITEMDESCRIPTIONUNITQTYRATEAMOUNT(RM)(RM)AExcavation, Hardcore, DPM, and concrete bed663.00BHalf brickwall, plastering and painting4057.20Sub-total4720.20AddCSundry items @ 10%472.02TOTAL BUILDING ESTIMATE5192.22

Sheet2

Sheet3

Sheet1BRICKWALL, PLASTERING & PAINTINGSDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)Half Brick wall / m2Half brickwall in cement and sand (1:3) including plastering and two coats emulsion paints both side= RM 28.0028.00Plastering Both Side/m2M25672.454,057.20= RM 12.00 x 224.0018.50Painting Both Side/m23.0055.50Wall A)= RM 8.50 x 217.0069.00Allowance for stiffener@ 5%3.45TOTAL RATES72.45EXCAVATION, HARDCORE, DPM & CONCRETE BEDDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)400mm thick excavationExcavation to reduce level 400mm and remove surplus, lay 200mm thick hardcore, DPM, and 200mm thick concrete (grade 30) Bed& disposal5.00200mm hardcore7.00M21351663.00200mm thick concrete(Grade 30)36.007.501.7513.13Area A)DPM3.00TOTAL RATES51.00ITEMDESCRIPTIONUNITQTYRATEAMOUNT(RM)(RM)AExcavation, Hardcore, DPM, and concrete bed663.00BHalf brickwall, plastering and painting4057.20Sub-total4720.20AddCSundry items @ 10%472.02TOTAL BUILDING ESTIMATE5192.22

Sheet2

Sheet3

Sheet1BRICKWALL, PLASTERING & PAINTINGSDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)Half Brick wall / m2Half brickwall in cement and sand (1:3) including plastering and two coats emulsion paints both side= RM 28.0028.00Plastering Both Side/m2M25672.454,057.20= RM 12.00 x 224.0018.50Painting Both Side/m23.0055.50Wall A)= RM 8.50 x 217.0069.00Allowance for stiffener@ 5%3.45TOTAL RATES72.45EXCAVATION, HARDCORE, DPM & CONCRETE BEDDESCRIPTIONUNITQTYRATEAMOUNTBUILD UP RATERM(RM)(RM)400mm thick excavationExcavation to reduce level 400mm and remove surplus, lay 200mm thick hardcore, DPM, and 200mm thick concrete (grade 30) Bed& disposal5.00200mm hardcore7.00M21351663.00200mm thick concrete(Grade 30)36.007.501.7513.13Area A)DPM3.00TOTAL RATES51.00SUMMARYITEMDESCRIPTIONAMOUNT(RM)AExcavation, Hardcore, DPM, and concrete bed663.00BHalf brickwall, plastering and painting4,057.20Sub-total4,720.20AddCSundry items @ 10%472.02TOTAL BUILDING ESTIMATE5,192.22

Sheet2

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Sheet120.000.603.5010.003.50PLAN VIEW1.00SECTION VIEW

Sheet2

Sheet3

Sheet120.000.605.0010.005.00PLAN VIEW1.00SECTION VIEW

Sheet2

Sheet3

volume20.000.603.5010.003.50PLAN VIEW1.00SECTION VIEW

gfa250.00250.00PLAN SECTION

Sheet3