Professional Practice II (Group Assignment)

1. PROFESSIONAL
PRACTICE II(QSB60904)
GROUP ASSIGNMENT
C O U R S E W O R K 2
0323839 BOON LI YING
0331686 ENG CHENG EN
0331084 GREWDELINE CHEW YEE JUN
0331473 LEE YU QING
0330856 LIM ZHENG YAN
0331773 NICHOLAS WONG CHIN KAI
0324838 NUR FIRZANA BINTI MUHAMMAD HASMI
0330764 WAN YEE LEN
SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
BACHELOR OF QUANTITY SURVEYING (HONOURS)

2. CONTENT
01 Final account
02 Project details & Events
A summary of the financial effect of all activities carried out under the Contract of an apartment project,
breakdown of variation works as well as adjustments to Nominated Sub-Contractor’s final account.
A brief introduction of the building construction and project team, as well as assessment of several events
arose between the parties during the construction period. The Consultant Quantity Surveyor (CQS) plays a
significant role in advising the involved parties, all in accordance to the PAM Contract 2018 (With Quantities)
and other construction contract related.

3. CONTENT
The overview of the Clauses and Conditions of Contracts referred in the effort of assessing the events are as follow: -
Event 1
Clause 19.1 – Contractor to insure against injury to Person and loss and/or damage of property
Clause 19.3 – Insurance for local workmen not subject to SOCSO
Clause 19.4 – Workmen’s compensation insurance for foreign workers
Clause 20.A.1 – Contractor’s risks – new buildings/works
Clause 30.4 – Set-off by Employer provided under Clause 19.5
Event 2
Clause 11.1 – Definition of variation
Clause 11.6 – Valuation rules (b)
Event 3
Clause 3.4 – Further drawings or details
Clause 11.5 – Valuation of variations and provisional sums
Clause 11.6 – Valuation rules (b)
Clause 23.6 – Contractor to prevent delay
Clause 23.8 – Relevant events (h)
Event 4 (i)
Section 35 of CIPAA 2012 – Prohibition of Conditional Payment
Clause 27.5 – Payment by Contractor to Nominated Sub-Contractors
Clause 27.6 – Failure of Contractor to pay Nominated Sub-Contractors
Appendix Clause 30.1 – Period of Honouring Certificate
Event 4 (ii)
PAM Sub-Contract 2006
Clause 26.13 – Set-off claims by Contractor provided under Appendix ‘B’
Clause 27.0 – General attendance upon Sub-Contractor
Appendix ‘B’ to the Sub-Contract Conditions – General attendance
Event 5
Clause 2.1 – Contractor to comply with AI
Clause 11.2 – No variations by Architect shall vitiate Contract
Clause 11.6 – Valuation rules (b)
Clause 23.8 – Relevant events (h)
Event 6
Clause 1.1 – Completion of works in accordance with Contract Documents
Clause 2.1 – Contractor to comply with AI
Clause 11.2 – No variations by Architect shall vitiate Contract
Clause 11.6 – Valuation rules (e)
Clause 24.3 – Matters materially affecting the regular progress of the works (h)

4. Final account
1
A Final Account in construction contracts is the agreed statement of the amount of money to be paid at the end of a building contract
by the Employer to the Contractor. A Final Account brings about a sense of finality to the negotiations leading up to the agreement of
the Final Account between the parties to the Contract. The settlement of the Final Account negotiations between the Contractor, and
the Architect or Quantity Surveyor will in due course trigger the issue of the Final Account Statement and ultimately, enable the
Architect to issue the Final Certificate.
In accordance with Clause 30.10 of the PAM Contract 2018 (With Quantities), the Contractor duly submitted his
Final Accounts within 6 months after the issuance of the Certificate of Practical Completion. Being appointed as
the consulting Quantity Surveyor, the application was then assessed, and the Final Account for the apartment
project was prepare.
The summary of the original Contract Sum is as follow:
Bill No. 1 — Preliminaries
Bill No. 2 — Building Works
Bill No. 3 — Local Infrastructure Works
Bill No. 4 — P.C. and Provisional Sums
Contract Sum
RM
RM
RM
RM
RM
5,250,000.00
64,250,000.00
4,500,000.00
20,600,000.00
94,600,000.00

5. Final account
2
Summary of Variation Order
Summary of Nominated Sub-Contractor’s account
Notes:
Contingency sum is a sum of money allowed in the project budget, for expenditure on aspects of the project that were unforeseen or
unforeseeable at the time of preparing documents. The Employer “funds” the contingency from which costs arising from the
enumerated risks are drawn until the contingency fund is exhausted. Any unspent contingency funds at the end of the project
typically revert to the owner or are shared. Therefore, the value of the contingency sum is to be omitted from the NSC’s Final
Account.

6. Project details
The proposed project is a mixed development consists of:
BLOCK
A
BLOCK
B
5-STOREY
PODIUM
CARPARK
26-STOREY
APARTMENT BLOCK
16-STOREY OFFICE BLOCK
(COMMERCIAL)
Safe Engineer Sdn. Bhd.
C&S Engineer
ABC Architect Sdn. Bhd.
Architect
Efficient Engineer Sdn. Bhd.
M&E Engineer
Good QS Sdn. Bhd.
QS Consultant
Build Fast Sdn. Bhd.
Contractor
Awarded Contract Sum RM90,000,000.00
Date of Commencement and Site Possession 1st January 2019
Contract Duration 24 months
3

7. Event 1
4
On 15th January 2019, it has been realized that the Contractor has not procured any insurance for the project although
works have started on site. A reminder was sent immediately to the Contractor and followed by a notice issued by the Architect
pertaining to this issue. Build Fast explained that they did not delay in procuring the insurance. It was the insurance company’s
problem in delaying them.
With date of commencement and site possession on 1st January 2019, it is made clear that Build Fast had
delayed in the procurement of insurance for a total of 15 Days.
It is assumed that the insurance for:
1. Injury to Person and loss and/or damage of property
2. New building
3. Local workmen not subject to registration under SOCSO
4. Foreign workers
ASD
is supposed to be insured by the Contractor and 15 Days was more than enough for Build Fast to obtain the
insurance required despite the delay in realization of missing insurance as according to the Clauses 20.A.1, 19.1,
19.3, 19.4 from PAM Contract 2018 insurance has to be procured before Works commencement and it should
be noted no extension of time (EOT) should be given for insurance procurement as it does not fall under any
relevant events as stated in Clause 23.8.
As stated in Clause 20.A.1, “……the Contractor shall as a condition precedent to the commencement of any
work under the Contract, take out and maintain in the joint names of the Employer, Contractor, Sub-
Contractors and all interested parties a Contractors’ all risks (CAR) insurance policy……”. The same condition
precedent is also stated in Clause 19.1, Clause 19.3 & Clause 19.4 where the insurance against injury to Person
and loss and/or damage of property, local workmen, foreign workers has to be procured before
commencement of Works under Contract. Hence, it is made clear that it is the obligation of the Contractor to
procure insurance before the commencement of Contract Works on site. As it was the Contractor’s obligation
to procure the related insurance before commencement of Works, it is deemed that the Contractor has
defaulted in insuring the Works. Hence, Employer may exercise his rights as in accordance to Clause 20.A.3,
Clause 19.5, and Clause 30.4.
As stated in Clause 20.A.3 (in reference to Clause 20.A.1), “……if the Contractor makes default in insuring or
continuing to insure as aforesaid, the Employer may insure against any risks in respect of which the default has
occurred and the amount of premiums and any other cost incurred or paid by the Employer shall be set-off by
the Employer under Clause 30.4”. The same statement is stated in Clause 19.5 where if the Contractor fails to
insure (in reference to Clauses 19.1, 19.2, 19.4), the Employer may (but not obligated to) insure against the risk
and any cost incurred by the Employer shall be set-off against the Contractor under Clause 30.4.

8. Event 1
5
This is further supported by Clause 30.4 which states that, “The Employer shall be entitled to set-off all costs
incurred and loss and expense where it is provided under Clauses……19.5 and 20.A.3……”. However, the
Employer must comply with Clause 30.4(a) and Clause 30.4(b) before he is entitled for set-off. Under Clause
30.4(b) the Employer or Architect must give the Contractor a written notice by hand or registered post
specifying the intention to set-off and unless stated elsewhere, such written notice shall be given within 28
Days before any set-off is deducted from payment by Employer. Next, under Clause 30.4(a) the Architect or
Quantity Surveyor must submit complete details of set-off assessment to the Contractor. Only then the
Employer is entitled for set-off.
In addition, Clause 30.4 also states, “……any set-off by the Employer shall be recoverable from the Contractor as
a debt or from any monies due or to become due to the Contractor under the Contract and/or from the
Performance Bond……”. If questioned by the Contractor regarding the Performance Bond deduction it is further
supported by Clause 39.5 which states that, “……the Employer may call on the Performance Bond and utilize
and make payments out of or deduction from the Performance Bond for……reimbursement of loss/ expense
suffered by the Employer……”.
Upon receiving the written notice of set-off, as stated in Clause 30.4, the Contractor has within 21 Days to
dispute or agree on the amount and if both parties are unable to agree on an amount or part of the amount
within a further 21 Days after the receipt of the Contractor’s written notice, either party may refer to
adjudication under Clause 36.0. If and when it happens, the Employer shall only be entitled to set-off the
amount or part of the amount not disputed. The allocation of the disputed amount will have to wait until the
adjudicator has issued his decision.
In conclusion, the Contractor did not fulfill his obligations which as a result entitles the Employer to set-off on
the condition the necessary steps are taken.

9. Event 2
6
Build Fast started works on the piling works. The driven precast concrete 300x300mm piles were billed as provisional
quantity under the Contract. The provisional quantity allowed was 40,500 meters of precast concrete piles. On completion of
the piling works, the actual penetration of the total quantity on site was only 10,900 meters. The Contractor demanded for a
higher rate due to the reduced in quantity of driven piles and claimed that they were unable to get a good price for materials
due to the reduced order and also because their sub-contractor is charging them a higher rates due to the reduce in quantities.
Build Fast had demanded for a higher rate because a significant deduction in quantity of materials required was
encountered which affected the material cost. Provisional quantity for the material allowed was 40,500
meters, but the total depth penetrated was only 10,900 meters hence, a 73% reduction was encountered.
Aside from that, the Sub-Contractor is charging them a higher rate as a result for the reduction in quantity.
Provisional Quantities consists of items that are measured during the tendering stage which may encounter an
inability to obtain exact measurements. This inability may be linked to a lack of details in the drawings or
nature of work. A Quantity Surveyor (QS) is responsible for providing reasonable assumptions to avoid over or
underestimations to avoid large variations from the approximate quantity. When a variation is experienced in
respect of Provisional Quantities, a valuation of Variation Orders will be undertaken by the QS based on the
actual quantities executed and these valuations are determined by the rates and prices in the Contract
Document all as stated in Clause 11.6 (f) of PAM Contract 2018. This would mean that the Contractor may
claim for the variation but will not be entitled to have his rates adjusted.
Furthermore, a claim for variation of the quantity of works from the previously stated and agreed upon
quantity is possible for Build Fast which is defined in Clause 11.0 of PAM Contracts 2018. However, the claim
must comply with the rules stated in Clause 11.6. The claim most fitting for the case of Build Fast lies under
Clause 11.6 (b). There are two pre-conditions for Clause 11.6 (b) which are: -
1. Where work is of similar character but not executed under similar conditions.
2. Where work is of similar character but there is a significant change in the quantity of work.
In the case of Build Fast, the Contractor can claim according to the second pre-condition under Clause 11.6 (b).
The Contractor had executed works under similar conditions but a significant change in quantity of 73%
reduction was experienced, which consequently affected the cost of materials procured. The rates and prices
in the Contract Document shall be the basis for determining the valuation in which the rates shall include a fair
adjustment, all as stated in clause 11.6 (b). This means that the Contractor will be allowed a fair adjustment in
agreed the rates.
– 29,600
40,500
𝑥 100% = – 73%
10,900 – 40,500 = – 29,600

10. Event 3
7
On 5th March 2019, when the Contractor was about to start the structural works for ground floor, they found out
that 30% of the ground beam details were not shown in the construction drawings. They wrote immediately to the Engineer to
request for the details. Works were idling on site because the Contractor cannot proceed further without the details. Engineer
took five days to furnish the Contractor with the detail drawings. Upon receipt of the detail drawings, the Contractor wrote to
the Architect and gave notice that they delay in furnishing details drawing by Engineer have time and cost implication and the
Contractor would like to reserve their right to claim for EOT & Loss and/or expense. The Contractor also claimed that the
beams with missing details were not captured in the BQ. Due to urgency of the arrangement of additional structural works, his
domestic sub-contractor is charging 10% extra. As such, the Contractor is claiming the same top-up/adjusted rates for these
works.
As stated, the date of commencement and site possession was on 1st January 2019, Build Fast had about 2
months to check the drawings and notify the Architect regarding the missing drawings (if any).
DELAYS MITIGATION
Clause 3.4 reads, “If the Contractor requires any further drawings……and any other information, he
shall specifically apply in writing to the Architect for these items in sufficient time before
commencement of affected constructions works to enable the Architect to issue instructions within a
period which would not materially delay the progress of the affected works……”. This is further
supported by Clause 23.6, “The Contractor shall constantly use his best endeavor to prevent or reduce
delay in the progress of Works, and to do all that may reasonably be required to prevent and reduce
delay or further delay in the completion of the Works beyond the Completion Date.” Hence, despite
given two months which is deemed to be more than sufficient for proper inspection of drawings by the
Contractor, he did not mitigate the delay by notifying the Architect in due time. Further, the Contractor
could have commenced the structural works for the ground beam details available on hand instead of
idling the works on site. This phenomenon is a similar indication where the Contractor has not entirely
alleviated the consequential delays. Thus, the Contractor is not entitled for claim of EOT and loss
and/or expense as he did not use his best endeavor to prevent the delay.
VALUATION OF VARIATIONS
Assuming Build Fast’s claim regarding the missing details not captured in the BQ is valid, it would
constitute a Variation Order (VO) in accordance with Clause 11.1, which defines the term “Variation” as
“…… alteration or modification of……quantity of Works” under Clause 11.1(a) which includes, “the
addition, omission or substitution of any work”. Regarding the valuation of the VO, as stated in Clause
11.6(b), “where work is of a similar character to work as set out in the Contract Documents…… but
there is a significant change in the quantity of work carried out……”. Hence, Clause 11.6(b) is applied as
there is no change in character of work (ground beams) but there is a significant change in quantity
(additional 30%). Moreover, Clause 11.6(b) also states that, “…… the rates and prices in the Contract
Documents shall be the

11. Event 3
8
basis of determining the valuation which shall include the fair adjustments in the rates to take into
account such difference.” In accordance with Clause 11.6(b), the Contractor is not entitled to his claim
of adjusted rates of extra 10% as Contract rates shall be used for valuation with fair adjustments to be
made.
In accordance with Clause 11.7, if the Contractor has incurred additional costs for he would not be paid
under Clause 11.6, he may make a claim for such additional expenses. However, he must comply with
Clause 11.7(a) and Clause 11.7(b). Under Clause 11.7(a) the Contractor must give a written notice to
the Architect specifying his intention to claim for additional expenses with initial estimates duly
supported by necessary calculations within 28 Days from date of AI or CAI. Next, under Clause 11.7(b)
the Contractor must send to the Architect and Quantity Surveyor complete particulars of his claim for
additional expenses supported by necessary calculations within 28 Days of Variation completion. If the
Contractor fails to submit within the stated time, it shall be deemed the Contractor has waived his
rights to any such additional expenses.
Following Clause 11.5, the Consultant Quantity Surveyor, Good QS shall measure and value all the
Variation. Upon completion of the variation, the Contractor, Build Fast shall submit the complete
details and particulars that required by the Architect, ABC Architect, and Quantity Surveyor, Good QS
for the valuation of Variation. The Quantity Surveyor needs to measure and value the Variation within
30 Days or any extended date that agreed by both the Contractor and the Architect from the receipt of
the Contractor’s submission.
As an Architect’s Instruction was issued to carry out the Variation Order, the Contractor is entitled to
claim for EOT under Relevant Events under Clause 23.8(h) compliance with AI under clauses 1.4, 11.2
and 21.4. However, the Contractor is not entitled to loss and expense as the Contractor has already
claimed his variation works under Clause 11.6 and Clause 11.7 (if any). To be entitled for EOT, the
Contractor must comply with Clause 23.1(a) and Clause 23.1(b).
Step 1 – Giving of Notice
1. Notice to be in writing
2. Include initial estimate of EOT required
3. Causes particulars
4. Notice to be given within 28 days of delay

12. Event 3
9
In conclusion, the Contractor is entitled to claim for EOT for the execution of Variation Order but not for late
issuance of drawings. The Contractor is only allowed to claim for variation and is not entitled to loss and
expense. The Contractor must also be notified that the 10% he is claiming is subject to Contract rates and fair
adjustments.
Step 2 – Official Application
A subsequent application submitted within 28 days of end of
cause of delay.
1. Application to be in writing
2. State relevant event causing delay
3. State effects delay caused on work
4. State number of days delayed
5. State steps taken to accelerate works
6. Submit reschedule of works programme
7. Submit all supporting records, details, documents, etc.
8. Number of days EOT required

13. Event 4 (i)
10
Clearglass claimed that there is always a delay in payment from the Main Contractor. The Interim Certificate was
issued by the Architect every 20th of the month on time. However, Clearglass only received payment more than two months
after the issuance of every Interim Certificate. This is seriously affecting their cash flow and they would like to get the
Employer’s involvement to solve this issue. The Contractor explained that they did not delay in paying the Nominated Sub-
contractor. It is supposed to be back to back payment condition. The Contractor will only pay the Nominated Sub-contractor
when they received payments from the Employer.
Back-to-back payment is used to arrange that the Main Contractor will not be
liable to pay the Sub-Contractor payments, unless the Main Contractor
received the equivalent payment from the Employer.
However, the validity of back-to-back payment was not recognized based on
the Construction Industry Payment and Adjudication Act (CIPAA) 2014. The
main objective of CIPAA is to facilitate regular and timely payment and to
prohibit the conditional payment such as “pay when paid” arrangement to
reduce the issue of cash flow shortage or non-payment of progress payments.
VALIDITY OF BACK-TO-BACK PAYMENT
SINWIRA BINA SDN BHD V PUTERI NUSANTARA SDN BHD [2017] MLJU 1836
In this case, the defendant, which was the main contractor for a project in Langkawi, relied on a “back-
to-back” clause in the Letter of Award which provided that the Sub-Contract Sum would be paid to the
plaintiff as a back-to-back payment as and when the payment was received by the defendant from a
party known as the “Client”. The clause also provided that in the event payment was not received from
the Client, the defendant would not be liable to pay the plaintiff.
Section 35 of the CIPAA renders a conditional payment provision in a construction contract void.
“Conditional payment provision” is defined in Section 35(2) of the CIPAA as the obligation of one party
to pay another upon that party receiving a payment from a third party, or that the obligation of one
party to pay another is conditional upon the availability of funds or the drawdown of that party’s
financing facilities. This meant that the back-to-back clause was void pursuant to Section 35 of the
CIPAA.
On 12th June 2019, ABC Architect nominated Clearglass Sdn. Bhd. as the Nominated Sub-contractor for aluminium works. They
started fabrication on site on 7th September 2019. A few disputes were raised by the Contractor and Clearglass.
Employer
Main
Contractor
Sub-
Contractor
“35. Prohibition of Conditional Payment
1. Any condition payment provision in a construction contract in relation to payment under the construction contract is void.
2. For the purposes of this section, it is a conditional payment provision when:
a) The obligation of one party to make payment is conditional upon that party having received payment from a third party; or
b) The obligation of one party to make payment is conditional upon the availability of funds of drawdown of financing facilities of that party.”

14. Event 4 (i)
11
The “pay when paid” clauses in a construction contract entered into before 15 April 2014 remains valid,
however in this event with the assumption that the Contract is made after the operative date, the mode of
payment shall not be incorporated and the Main Contractor holds the obligation to pay the Nominated Sub-
Contractor. Although a nominated sub-contractor is nominated by the Employer, the parties in the main
contract are Main Contractor and the Employer; and the parties in subcontract are the Main Contractor and
the Nominated Sub-Contractor.
The contractual provision that is the subject of judgement falls under Clause 27.5 of PAM Contract 2018. The
clause reads that at the same time when any certificate under Clause 30.0 is issued, the Contractor shall inform
the Nominated Sub-Contractor in writing of the amount of the said total value. The sum representing such total
value shall be paid by the Contractor to the Nominated Sub-Contractor within seven (7) Days after the Period of
Honouring Certificates. Will there be a failure of Contractor to pay Nominated Sub-Contractor, the Employer
may (but not obliged to) pay such amounts directly to the Nominated Sub-Contractor and deduct the same
from any sums due or to become due to the Contractor, being supported by the Clause 27.6.
PERIOD OF HONOURING CERTIFICATE
means the period for honouring certificates stated in the Appendix under Clause 30.1, that if none stated is
twenty one (21) Days from the date of the Certificate.
Once the Interim Certificate is issued by the Architect, it crystallizes the Employer’s obligations to pay. The
Employer would have to honour such certificate in accordance with the provisions in the contract by reasons of
the certificate having a ‘temporary finality’. Failure to pay the Interim Certificate within the period, without
reasonable cause, constitutes a serious breach of contract.
Say in this event that the Employer had not made payments, consecutively, which therefore constitutes the
Contractor making a statement that, “…will only pay the Nominated Sub-Contractor when they received
payments from the Employer”, it is held that the Employer had breached the conditions of Contract where the
essential condition of issuance of Interim Certificate by the Architect has been made in a timely manner. In
effect of non-payment, the remedies available to the Contractor are that he can suspend execution of the
works until such time payment is made (Clause 30.7), he can claim interest on the unpaid amount (Clause
30.17), and if non-payment persists, he may terminate his own employment (Clause 26.1(a)). The Contractor
may also refer the dispute for adjudication under CIPAA 2014 for a decision as a last resort.
Howbeit, if the Period of Honouring Certificate was pre-agreed between the parties to be later than 21 Days,
granted in this event that the period is assumed to be three months after the issuance of every Interim
Certificate, the Employer therefore has not breached the contract in relation to the payment.

15. Event 4 (ii)
12
Build Fast is charging the usage of water, electricity, scaffolding, hoisting/vertical transport used by Clearglass.
Clearglass claimed that all these general facilities should be provided by the Main Contractor at no cost to them.
On 12th June 2019, ABC Architect nominated Clearglass Sdn. Bhd. as the Nominated Sub-contractor for aluminium works. They
started fabrication on site on 7th September 2019. A few disputes were raised by the Contractor and Clearglass.
Clearglass Sdn. Bhd. has been selected by the Employer as the Nominated Sub-Contractor for aluminium works.
Generally, the employer negotiates a price with the nominated sub-contractor and then instructs the main
contractor to appoint them for those works. The main contractor will include the sub-contractor’s price as a
prime cost sum in the contract sum for the main contract, to which they add overheads, profit and attendance.
In this event, a dispute arose where the Nominated Sub-Contractor claimed that the general facilities on-site
should be provided by the Main Contractor at no cost to them.
GENERALATTENDANCE AND SPECIALATTENDANCE
‘Attendance’ is the main contractor’s mark up for specific services which the Employer had paid under
preliminaries. This might include items such as material handling, scaffolding and rubbish clearance.
Attendance can be ‘general’ or ‘special’.
General attendance is the description of main contractor attendance available site-wide to all suppliers or sub-
contractors such as welfare facilities, external scaffolding, temporary power and lighting, platform and
passenger hoists, tower crane lifts by prior arrangement, site security, waste disposal etc.. General attendance
is additionally stated in Appendix ‘B’ of the PAM Sub-Contract 2006. Further, Clause 27.1 in the Contract reads
that general attendance shall be provided by the Contractor to the Sub-Contractor. Save as otherwise provided
in the general attendance, the Sub-Contractor shall at his own expense provide all additional services and
facilities or agree with the Contractor to provide the services and facilities at additional cost to be agreed
between them. In short, these additional services and facilities are known as special attendance, such as special
hoists, builders work such as a concrete plinth, special scaffolding etc..
In assessing the claim by Clearglass with regarding the general facilities to be provided by Build Fast,
clarification of each item in accordance with Appendix ‘B’ of the PAM Sub-Contract 2006 are as follow: -
WATER
v) The Contractor shall provide free use of reasonable water supply which will terminate at standpipes in
reasonable locations. Temporary water supply provided for general purposes, where available at or
near the site of the Sub-Contract Works, may be used by the Sub-Contractor. If the Sub-Contractor
requires additional water distribution pipes not provided by the Contractor, he shall at his own cost

16. Event 4 (ii)
13
provide such distribution pipes and equipment for his needs to connect to water connection positions
provided by the Contractor in reasonable locations.
ELECTRICITY
iv) The Contractor shall provide free use of power for the safe access to and egress from the Main
Contract Works. Temporary power provided by for general purposes, where available at or near the
site of the Sub-Contract Works, may be used by the Sub-Contractor. If the Sub-Contractor requires
additional power not provided by the Contractor, he shall at his own cost provide distribution cables
and equipment for his needs to connect to power sockets provided by the Contractor in reasonable
locations.
ix) The Contractor shall assist in arranging for source of any special power supplies required by the Sub-
Contractor. (Current and fuel consumed shall be paid by the Sub-Contractor).
SCAFFOLDING
i) The Contractor shall afford free and full use of standing scaffolding as provided in Clause 27.2, while it
remains so standing upon the site. The Contractor and Sub-Contractor shall give written notice to the
other party prior to the removal of any standing scaffolding.
HOISTING / VERTICAL TRANSPORT
viii) The Contractor shall provide to the Sub-Contractor free reasonable use of the Contractor’s existing
hoisting facilities for such times as they remain operational on site. The Sub-Contractor shall be
responsible at his own cost for the distribution of items required for the execution of the Sub-Contract
Works and shall provide any additional hoisting facilities which may be required for that purpose.
It is important to establish within the contract documents whether items that sub-contractors require will
constitute attendances that will be provided by the main contractor, or whether they will provide them
themselves (such as their own specialist equipment).
Therefore, in this case, the general facilities shall be provided by the Main Contractor with no cost to them as
expressed in PAM Sub-Contract 2006 Appendix ‘B’. In the event the Contractor, at the request of the Sub-
Contractor, provides services and facilities additional to the general attendance or if the Sub-Contractor fails to
comply with any particular provisions, the extra cost for these provisions, if provided by the Contractor shall be
paid by the Sub-Contractor and the Contractor shall be entitled to set-off the extra cost under Clause 26.13.

17. Event 5
14
On 26th September 2019, an instruction was issued to the Contractor for the omission of 90% of the flat ceiling board
and to be replaced with sloping ceiling board (a gradient of 15 degree) upon the Interior Designer’s request. The Contractor
argued and refused to carry out the works because of the adjustment of degree makes their works tedious and complicated.
The Architect and the Interior Designer insisted on their design and claimed there should not be additional cost that 15 degree
was a very minor adjustment and the flat ceiling rate shall be applicable.
The Contractor claimed to have the rights not to carry out this works and that the sloping ceiling is too difficult to
construct. If the Architect insisted on this construction, they want to claim for additional time for the sloping ceiling and
deserve an adjusted unite rates.
VALUATION RULES: FAIR ADJUSTMENTS OF UNIT RATES
Based on PAM Contract 2018 (With Quantities), Clause 11.1 states the term “Variation” means the
alteration or modification of the design, quality or quantity of the Works as supported by Clause
11.1(a), the addition, omission or substitution of any work and subject to the valuation rules in Clause
11.6(b), where the work is a similar character to work set out in the Contract Documents but is not
executed under similar conditions or is executed under similar conditions but there is a significant
change in the quantity of work carried out, the rates and prices in the Contract Documents shall be the
basis for determining the valuation which shall include a fair adjustment in the rates to take into
account such differences.
This determines the Contractor is entitled to fair adjustments of unit rates for sloping ceiling due to the
change on the work condition instructed by the Architect. Therefore, the Architect shall consult to the
QS to assess and recommend the altered value for the variation work with a fair adjustment in the
rates to take into account such differences.
ARCHITECT’S INSTRUCTIONS (‘AI’)
Under Clause 2.1 states that, the Contractor shall subject to Clauses 2.2 and 2.3 forthwith comply with
all instructions issued to him by the Architect in regard to any matter in respect of which the Architect
is expressly empowered by these Conditions to issue instructions. Furthermore, Clause 11.2 mentions,
the Architect may issue an AI ordering a Variation or sanctioning any Variation made by the Contractor.
No Variation ordered by the Architect or subsequently sanctioned by him shall vitiate the Contract.
Pending to the valuation of the Variations, the Contractor shall carry out with due diligence and
expedition all Variation so instructed.
Consequently, the Contractor may be able to claim for the extension of time for the delay causing the
construction period to be fixed to a later completion date provided it is supported by Clause 11.2.

18. Event 5
15
The Contractor shall constantly use his best endeavour to prevent or reduce delay in the progress of
the Works, and to do all that may reasonably be required to the satisfaction of the Architect to prevent
and reduce delay in the completion of the Works as shown in Clause 23.6. Hence, according to Clause
23.1(a), the Contractor shall give written notice to the Architect his intention to claim for such
extension of time together with an initial estimate of the extension of time he may require supported
with all particulars of the cause of delay. Such notice must be given within twenty-eight (28) Days from
the date of AI, CAI or the commencement of the Relevant Events, whichever is earlier. The giving of
such written notice shall be a condition precedent to an entitlement of extension of time. The
Contractor’s reason to claim extension of time is stated in Clause 23.8(h) which is compliance with AI
issued by the Architect under Clauses 1.4, 11.2 and 21.4. It is upon the Architect’s consideration either
to reject the Contractor’s application with reasons or issue a Certificate of Extension of Time with
details within six (6) Weeks from the receipt of sufficient particulars.
Assuming that the AI was issued before the installation of the ceiling, the extension of time would be invalid as
it would not have affected the progress of work thus means the Contractor is unable to claim for the additional
time. On the other hand, Contractor is still able to receive some compensation on the adjusted fair rates as the
work condition was not written in the Contract Document. In any case, if the Contractor fails to comply with AI,
therewith then the Employer may, without prejudice to any other rights and remedies which he may possess
under the Contract, employ and pay other Person to execute any work which be necessary to give effect to
such instruction as stated under Clause 2.4.

19. Event 6
16
Developer CEO’s brother, Mr. Boss Bro has just started his sanitary fittings business. So Developer decided to let Mr.
Boss Bro supply and install all the sanitary fittings for this project. Developer instructed the Architect to instruct the Contractor
about the decision to omit of all sanitary fittings works from their Contract and give the omitted works to Mr. Boss Bro.
The Contractor claimed that the sanitary fittings are already part of their scope of work in the Contract and
challenged this instruction to omit.
ORIGINALITY OF MAIN CONTRACTOR’S WORKS
The sanitary fittings works is part of the Main Contractor’s in the Contract to begin with. In accordance
to Clause 1.1, the Contractor shall carry out and complete the Works in accordance with the Contract
Documents and in compliance therewith provide materials, goods and standards of workmanship of
the quality and standard described in the Contract Documents and/or required by the Architect in
accordance with the provisions of the Contract.
Clause 2.1 reads that the Contractor shall comply with all instructions issued to him by the Architect.
However with the decision to omit all sanitary fitting works instructed by the Developer to the
Architect to give Architect Instruction (AI), it had clashed with Clause 11.2, where no variations
required by Architect shall vitiate Contract. The Architect has his rights to issue an Architect’s
Instruction (AI) to order a Variation or sanctioning any Variation made by the contractor but the
Variation or sanctioning ordered by the Architect should not vitiate the contract.
BONA FIDE OMISSION
According to clause 11.6(e), the rates and price in the Contract Documents are used for the omission of
works, but this is limited to bona fide omission only. It implies that if the Employer omits any works
from the Contract and give it to others, it will, therefore, constitute a breach of contract, which in this
event the omission instructed by the Developer was outside of the contract as he was intending to
grant the sanitary fittings works to his brother.
Following the case of Commissioner for Main Roads v Reed & Stuart Pty Ltd & Anor (1974), the court
held that the contract manager cannot omit certain works under the contract and give to another
contractor to perform the work. Also, the contract manager cannot prevent or bar the contractor from
performing work, which the parties have agreed the contractor will perform, by exercising a variation
power.

20. Event 6
17
ENTITLEMENT TO LOSS AND/OR EXPENSE
If, the Developer insists to omit the sanitary fittings works from the contract and give it to Mr Boss Bro,
the action will violate the agreed-upon terms and conditions of the contract, then such breach of
contract entitling the Contractor to damages, and it is clearly established that loss of profit can form
part of such a claim for damages. Clause 24.1 enables the contractor to pursue his entitlement to loss
and expenses caused by matters referred to clause 24.3. In this event, the Contractor has the rights to
claim for loss and expenses provided under Clause 24.3(h) on the breach of contract by the Employer.
Further, at common law, demonstrated that the principal does not have an automatic right to instruct
variations unless the contract specifically empowers the principal to instruct variations. With that being
said, the contractor can refuse to perform the variation and insist on performing the original scope of
works. This principle applies to all contracts, including subcontracts and consultants’ agreements.
From the case, Carr v JA Berriman Pty Ltd (1953) 89 CLR 327, the court held that despite the power
given to Architect to direct that particular item of work not be carried out, the architect was not
authorised to delete the works so that they could then be carried out by another contractor. The court
stated that such a power would be unreasonable and could only be conferred with very clear words.
In this event, if the Developer did not have the contractual power to instruct a variation, then it had repudiated
the contract by insisting that the Contractor departs from the original line, where the power to order variations
set out in the contract has been exceeded. Secondly, variations must be either necessary or desirable for the
satisfactory completion or functioning of the works. Works cannot be omitted, for example, to save time for
completing the works, or to save the employer’s money.
Generally, for contractors seeking to prove a claim of lost profit due to omitted scope, it is critical to
demonstrate that his loss of profit by the omission of work is genuinely incurred because of his inability to
recover that loss elsewhere.
In conclusion, it is advised that the sanitary fittings works to be carried out in the course of the Contractor’s
operations being the reason that the instruction by the Developer will constitute a breach of contract and the
consequences can be serious.