Design and Build_5

Dr Khairuddin Abdul Rashid

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Session 5

PWD Form DB/T (2002)

Conditions of Contract Conditions of Contract

Clause 46 – 62


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PWD Form DB/T 2002

Conditions of Contract

Clause 46 Procedure for Claims

� Cl. 46.1 if the contractor intends to claim … he must intends to claim … he must submit written notice together with an estimate of the amount within 60 days of the occurrence of an event…

� Cl. 46.2 in relation to Cl. 46.1, the contractor must submit details within 90 days of CPC. Amount to be added to the contract sum


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PWD Form DB/T 2002


Clause 47 Testing and

Commissioning of M/E and

other Services

� The contractor shall arrange

for all necessary tests to be

carried out on the equipment

and installation, on

completion of the installation

work… the costs should have

been included in the contract


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PWD Form DB/T 2002


Clause 48 Defects After Completion

� DLP = 24 months

� Contractor to repair at his own � Contractor to repair at his own cost upon instructed by the PD

� Schedules of Defects: 1st

within 14 days; and the final schedule not later than 28 days after the DLP

� Contractor has up to 3 months after receiving the final schedule to make good any defects, etc


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PWD Form DB/T 2002


Clause 48 Defects After

Completion

� Cl. 48.5 PD to issue the � Cl. 48.5 PD to issue the

Certificate of Completion of

Making Good Defects if the

contractor has fulfilled his

obligations under Cl. 48.1 and

48.2


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PWD Form DB/T 2002


Clause 49 Unfulfilled Obligations

� Notwithstanding the issue of

CCMGD as per Cl. 48.5, both CCMGD as per Cl. 48.5, both

parties remain liable for the

fulfillment of any obligations

incurred under the contract


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PWD Form DB/T 2002


Salient points (amendments) on

payments

� Schedule payment� Schedule payment

� Payment based on valuation of

works

� Deferred payment

To be determined by the PD

before tender is called


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PWD Form DB/T 2002


Clause 50 Interim Payments

� Cl. 50 1(a) Payment Schedule

as Appendix 2. Prepared and as Appendix 2. Prepared and

agreed mutually based upon

the approved programme of

works

� PD may pay according to

work done…


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PWD Form DB/T 2002



� Cl. 50 1(b) Where there is no

Payment Schedule, interim Payment Schedule, interim

payment shall be made based

on PD’s monthly valuation of

work done

� Cl. 50.2 The contractor shall

submit to the PD written

application for interim

payments


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PWD Form DB/T 2002



� The contractor’s application

shall show separately:shall show separately:

� based on schedule – amount

of variations (Cl. 28) and

amount of Provisional Sums

executed (Cl. 29)

� Not based on schedule – value

of goods or unfixed materials


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PWD Form DB/T 2002


Clause 50.3 (a) Schedule

Contractor’s application

14 days

OK?

Yes NO

PD issue PD issue notice

interim certificate and Govt. pays

pays within within 30 days

30 days (Cl. 50.3(c) (Cl. 50.3(c)


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PWD Form DB/T 2002


Clause 50.3 (b) No schedule

Contractor’s application

28 days

Valuation (work done + 90% matls. on site) sum not less than the sum stated in Appendix 1

PD issue

interim certificate

pays within

30 days (Cl. 50.3(c)


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PWD Form DB/T 2002


Clause 50.3 (c) Honoring of interim certificates = 30 days from issue of the same

� Performance Bond – full value as in the certificate

� Performance guarantee sum –90% of the amount certified… 10% retained as the guarantee sum until the total amount retained is equivalent to 5% of the contract sum


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PWD Form DB/T 2002


Clause 51 Final Account and Final Certificate

� Cl. 51.1 The contractor to � Cl. 51.1 The contractor to submit a statement of the final account with supporting documents not later than 3 months from CCMGD or CCM

� CL. 51.2 PD to issue the Final Certificate within 3 months after receiving the contractor’s document as stated in Cl. 51.1


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PWD Form DB/T 2002


Clause 51 Final Account and Final

Certificate

CCMGD or CCM

3 months3 months

Contractor’s documents (if none

3 months PD sends notice)

2 months

Final Certificate


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PWD Form DB/T 2002


Clause 51.6 Condition precedent

to Final Payment is deleted

(see Amendments note 7)

� A Statutory Declaration, or

� A Certificate signed by/or on

behalf of the DG of Labor

That all payments to workmen

have been paid


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PWD Form DB/T 2002


Clause 52 Effects of PD’s

Certificate

� PD’s certificate, any approval, � PD’s certificate, any approval,

or payment… not considered

as conclusive evidence

� PD’s certificate shall be final

and binding if there is a

dispute brought before an

arbitrator or in the courts


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PWD Form DB/T 2002


Clause 53 Deduction from Money

Due to Contractor

� The Government or the PD is � The Government or the PD is

entitled to deduct any money

owing from the contractor to

the Government under the

contract which may become

due or payable to the

contractor under the

contract…


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PWD Form DB/T 2002


Clause 54.1 Determination of Contractor’s Employment

Determination if the contractor shall make default in any one shall make default in any one or more:

� Suspends the design or construction

� Fails to proceed regularly and diligently

� Failed to follow contract

� Refuses to comply with PD’s instruction

� Fails to comply with Cl. 31


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PWD Form DB/T 2002


Clause 54.2 Determination of

Contractor’s Employment

Determination if the contractor:

� Is bankrupt

� Becomes insolvent

� Company winding up

� Having a provisional

liquidator


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PWD Form DB/T 2002


Clause 54.3 Post determination

� Procedures as per Cl. 54.3(a)

– (f)

Clause 55 War or Earthquake

� To continue? To suspend? To

terminate?... Settled by mutual

agreement or Arbitration


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PWD Form DB/T 2002


Clause 56 Arbitration

� Any dispute… refer to the � Any dispute… refer to the person named in Appendix 1

� The officer decides (within 45 days, in writing) and is binding to the parties until after the completion of the works

� If the above fails… refer to Arbitration … see Cl. 56.3 and Cl. 56.4-56.9


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PWD Form DB/T 2002


Clause 57 Law Governing the

Contract

� Malaysian Law and Malaysian

Courts

Clause 58 Stamp Duty

� To be borne by the Contractor


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PWD Form DB/T 2002

Special Conditions

Clause 59 Maintenance

� Cl. 59.1 The contractor shall

maintain the whole works and maintain the whole works and

services for 24 months from

CPC (for scope refer to the

Government’s Requirements)

� Cl. 59.4 PD to issue

Certificate of Completion of

maintenance upon completion

of all maintenance


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PWD Form DB/T 2002

Special Conditions

Clause 60 Direct Payments and

Consultancy Agreement with

Contractor’s Consultants

� Cl. 60.1 -60.2 agreement with � Cl. 60.1 -60.2 agreement with

consultants must follow the

JKR Standard Form of

Agreement For Consultancy

Services

� The contractor recommends to

the PD for payments… the

Government pays direct to the

respective consultants


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PWD Form DB/T 2002

Special Conditions

Clause 61 Bills of Quantities

� Only provisional quantities.

Firm quantities shall not form Firm quantities shall not form

part of the contract.

� Rates in the BQs shall be used

as basis from valuation of

variations (Cl. 28)


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PWD Form DB/T 2002

Special Conditions

Clause 62 Advance Payment

� Cl. 62.1 The contractor is

entitled – 15% of the Builder’s entitled – 15% of the Builder’s

Work or maximum of RM5.0

million. Condition precedent:

� LA duly signed, with

Performance Bond, Insurances

and SOCSO, with all receipts

� Advance payment guarantee


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PWD Form DB/T 2002

Special Conditions


Treasury Letter 10/02:

� 25% of builder’s work,

maximum RM10.0 million

� 20% of NSC’s work,

maximum RM5.0 million


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PWD Form DB/T 2002

Special Conditions


� For recoupment see Cl. 62.2

� Liability under advance

payment is terminated once

the Government realized the

full sum of advance paid


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PWD Form DB/T 2002


Deferred payment [Amendments]

Cl. 50 Interim Valuations and

Interim Payments

Cl. 63 Loan Disbursement by the Cl. 63 Loan Disbursement by the

Lender

Cl. 64 Direct Payment to the

Contractor’s Bumiputera

Organizations and or

Professionals

Cl. 65 Financing Cost

Delete Cl. 62 Advance Payment


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PWD Form DB/T 2002


Deferred payment [Amendments]

� Monthly interim payments are

deferred until CPC

� Contract Sum = Construction � Contract Sum = Construction

cost + Financing cost

� Lender – BPIMB (Bank

Pembangunan)

� Deed of Assignment between

the contractor and the Bank

� Financing cost = actual cost of

fund + 1%


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PWD Form DB/T 2002


Deferred payment

� There will be monthly interim valuation & paymentsvaluation & payments

� Direct payments to Bumi organizations

� Direct payments to consultants

� Contractor to submit claims for payments

� PD issue interim valuation certificate within 28 days


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PWD Form DB/T 2002


Deferred payment

� Lender (the bank) will

disburse payment based on disburse payment based on

PD’s certificate

� Govt. pays interim payment

no 1 on CPC = 50% work

done + 50% financing cost

� Govt. pays interim payment

no 2 one year after CPC for

the balance.


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End of Session 5

Design and Build_5

Documents

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