EPA Funding Opportunities for Equitable Electric Transportationby Mike Moltzen
Pp2 coursework 2
1.
SCHOOL OF ARCHITECTURE, BUILD AND DESIGN
BACHELOR OF QUANTITY SURVEYING (HONOURS)
PROFESSIONAL PRACTICE 2 (QSB 60904)
Coursework 2
NAME STUDENT ID
Hing Pui Kei 0325961
Le Jia Nian 0319957
Lim Ting Le 0320028
Ng Huoy Miin 0319097
Sylvester Tang Kiok Heng 0325152
Wong Qin Kai 0320024
Charanjeev Gunputh 0323942
3. Question 1.
You are required to prepare a report to your director, explaining briefly the adjustments of the
essential elements in your preparation of this project’s final account. (15 marks)
According to the clause 30.11 in the PAM Contract 2006 (with quantities), the work
adjustment made to the contract sum must be shown in the final account. The final account
shall be conclusive and deemed agreed by the parties otherwise any outstanding items to be
resolved separately among the employer and the contractor. In this project final account, the
following essential element will be:
1.Variation works
-Under clause 11.1, works being executed will be defined as variation works. Next, the rules
of valuation will be based on clause 11.6(a) to 11.6(d) if it is an additional works. Whereas,
the rules of valuation will be based on clause 11.6(e) if it is an omission works, stating that
the contract rates and price will be used for omission.
2.Remeasurement of provisional quantities
-A need in re-measured of the provisional quantities under clause 30.10 says that
documents shall contain details of quantities. Architect must re-measured items in the
contract bills which are provisional quantities based on the actual quantities executed. Based
on clause 11.6(f), the rates and prices in the schedule of rates shall determine their
valuations.
3.Omission of prime cost and provisional sum
-Final account shall show the omission of all prime cost sums and the related profits
provided by the contractor in the contract document stated in clause 30.11(c). Moreover,
some items which are allowed in the provisional sum will not be added back into the final
account, example the contingency sum. Hence, the omission of the prime cost and
provisional sum is for the amount that will need to be re-measured based on the tender
price.
4. 4. Adding back of NSC and NS final account
-Under the clause 30.11(c), the final account of the NSC for the prime cost sum and
provisional sum should be added back to the final account as the figure in the contract sum
may not be the actual sum incurred.
5.Adjustment of profit and attendance
-The contractor will be given profit and attendance with the basics of NSC and NS final
account according to the clause 30.11(c). If the provisional sums item is executed by the
contractor themself, profit and attendance will not be given.
6.Adjustment of provisional sum based on actual expended and omitted if not
expended
-Provisional will be adjusted based on actual expended and will be omitted if not expended
stated in the clause 30.11(d). Whereas for some provisional sum that is executed by the
NSC, the contractor will be given profit and attendance.
7.Additional expenses claims
-Clause 11.7 stated that any additional expenses caused by the variation that the contractor
will not be paid under any provisions in clause 11.6 can be claimed.
8.Loss and expense claims
-According to the clause 24.1, claim can be made by contractor for matters referred in clause
24.3. Moreover, contractor must have actually incurred a loss and expense. Based on clause
24.4, any amount of loss and expense shall be added to the contract sum. Final account has
to include the loss and expenses incurred by the contractor.
5. Question 2.
The tender drawings shows that the apartment has an entrance porch on the layout but no
details were provided sufficiently for measurement of quantities. The Quantity Surveyor then
had suggested that these items be listed as Provisional Sum. However you have forgot about this
item and did not include it in your tender document. The contract was awarded without it. Your
director would also like to know the significance and contractual implications of this
omission.(10 marks)
Being omitted from the tender document, the entrance porch is not within the Contractor’s obligation
under the contract. Under Clause 12.2, this issue of omission can be corrected by the Architect or
Consultant without voiding the contract itself which is a benefit for the Employer.
The Architect can issue an AI ordering a Variation under Clause 11.1(a) which refers to the entrance
porch being an additional provisional sum to the contract. The employer is protected by the Clause
11.2 which states that no Variations issued by the Architect shall vitiate the contract.
Being a provisional sum which has been added later, a new contract sum which takes the entrance
porch into account will be calculated. Being a provisional sum, it implies that the exact cost of the
works could not be calculated at the start due to lack of information. The cost of works will be
included in the Interim Certificate.
In the interim certificate, the works related with the entrance porch will be measured and placed under
variations, and will be valued according to clause 11.6(b) which uses rates and prices in the Contract
Document. Part of the cost will be retained as retention sum for the Defect Liability Period.
Throughout the projects, cost of the entrance porch will be included in the Interim Certificates until all
the related works are completed.
There will be an increase in contract sum compared to the original one, but the sum stated as
provisional sum is generally an overestimate of the cost of the related works.
6. Question 3.
In accordance with clause 30.10 of the contract, the contractor duly submitted his Final
Accounts within 6 months after the issuance of the Certificate of Practical Completion. You are
then required to assess this application and prepare the Final Account for the apartment project
based of the following valuations and adjustments made to the Contract Sum: (35 marks)
7. Project: Apartment project
Employer:
Contractor:
STATEMENT OF FINAL ACCOUNT
1.0 Original Contract Sum 71,800,000.00
2.0 Less: P.C & Provisional Sums
(9,600,000.00)
Total Builder’s Works
62,200,000.00
3.0 Add: Variation works (V.O. Nos 1-4)
Total Additions 1,200,000.00
Total Omissions 586,000.00
Nett Additions 614,000.00 614,000.00
62,814,000.00
4.0 Add: NSC’s final account
4.1 Lift Services 1,700,000.00
4.2 Air Conditioning Services 2,000,000.00
4.3 Electrical Services 2,700,000.00
4.4 Entrance Porch 1,250,000.00
7,650,000.00 7,650,000.00
4.5 Profit and Attendance
a. Profit @ 2% of RM7,650,000.00 153,000.00
b. Attendance @ lump sum 151,000.00
304,000.00 304,000.00
5.0 Contractual Claims:
5.1 Loss and Expenses 10,000.00
10,000.00 10,000.00
8. FINAL CONTRACT VALUE
SUMMARY OF ORIGINAL CONTRACT SUM
Item Description Omission (RM) Addition
(RM)
Nett Addition/
Omission (RM)
1
2
3
4
Preliminaries
Building Works
Local Infrastructure Works
P.C. and Provisional Sums
5,250,000.00
50,450,000.00
6,500,000.00
9,600,000.00
-
-
-
-
5,250,000.00
50,450,000.00
6,500,000.00
9,600,000.00
TOTAL CARRIED TO
STATEMENT OF FINAL ACCOUNT
71,800,000.00 71,800,000.00
9. SUMMARY OF VARIATION WORKS
Variation
item
Description Omission
(RM)
Addition
(RM)
Nett Addition/
Omission (RM)
VO/1
VO/2
VO/3
VO/4
Changes of entrance lobby from
floor tiles to granite floor
New guard house
Changes from concrete block
drains to precast concrete culverts
Omission of hand railing to yard
300,000.00
-
200,000.00
86,000.00
500,000.00
300,000.00
400,000.00
-
200,000.00
300,000.00
200,000.00
(86,000.00)
TOTAL CARRIED TO
STATEMENT OF FINAL ACCOUNT
586,000.00 1,200,000.00 614,000.00
10. SUMMARY OF NSC FINAL ACCOUNTS
Variation
item
Description Omission (RM) Addition (RM) Nett Addition/
Omission (RM)
NSC/1
NSC/2
NSC/3
NSC/4
Lift Services
Profit @ 2%
Attendance as item
Air Conditioning Services
Profit @ 2%
Attendance as item
Electrical Services
Profit @ 2%
Attendance as item
Provisional
Profit @ 2%
Attendance as item
1,500,000.00
30,000.00
30,000.00
2,200,000.00
44,000.00
44,000.00
2,600,000.00
52,000.00
52,000.00
1,700,000.00
34,000.00
30,000.00
2,000,000.00
40,000.00
44,000.00
2,700,000.00
54,000.00
52,000.00
1,250,000.00
25,000.00
25,000.00
204,000.00
(204,000.00)
102,000.00
1,3000,000.00
TOTAL CARRIED TO
STATEMENT OF FINAL ACCOUNT
6,552,000.00 7,954,000.00 13,102,000.00
Total NSC Final Account 6,300,000.00 7,650,000.00
Total Profit 126,000.00 153,000.00
11. Total Attendance 126,000.00 151,000.00
SUMMARY OF LOSS AND EXPENSES
Variation
Item
Description Omision
(RM)
Addition
(RM)
Nett addition/
Omission(RM)
1. Additional expenses for
insurance premium
10,000.00 10,000.00
TOTAL CARRIED TO
STATEMENT OF FINAL ACCOUNT
10,000.00 10,000.00
12. Question 4.
On a different project, you were asked to explain the basis on how the following variations may
be finalised and priced during the Final Account stage:
(a) The Contractor had priced RM 160,000.00 for the Contractor All Risk Insurance policy in
the Preliminaries Bills. The Contractor failed to purchase this insurance when the works
commence. The Employer, then, bought and paid for the said insurance for RM 180,000.00 on
behalf of the Contractor. (10 marks)
Under Clause 20.A.1 in PAM Contract 2006 (With Quantities), It stated the insurance of new
buildings and works with contractor’s risks. Clause 20.A.1 provides the contractor’s All Risk
Insurance (CAR) policy which is made a condition precedent to the commencement of any work
under the Contract. In practice, the contractor would normally submit an insurance cover note to the
architect a week or two after the Date of Commencement pending the preparation of an insurance
policy. It is normal practice for contractor to work out with the requirements of the detailed
contractor’s All Risk (CAR) insurance policy.
Clause 20.A.1 stipulates that the duration of cover of the insurance policies to be valid up to the
Completion Date and the extended maintenance cover shall be constitute Defects Liability Period plus
a further three months. If the contractor failed and cannot complete within the insured period, there is
a delay and contractor shall ensure insurance is accordingly extended and the extension of insurance
cover not less than one month before the expiry of the insurance cover.
Clause 20.A.3 gives default powers to Employer to purchase the insurance on behalf of the Contractor
if the Contractor fails to effect and extend the insurance. The employer can set- off a reasonable
insurance premium for the period of cover against any sum due to the contractor or from the
contractor’s Performance Bond. On behalf of the contractor’s default, the employer’s premium paid
shall be recovered through a set-off under Clause 30.4. The employer shall be entitled to set-off all
cost incurred and loss and expense due to Contractor under Contract and/or from the Performance
Bond. The set-off is subject to either agreement of the contractor or adjudication where the employer
has to present his case to get the same order.
In this case, the contractor fails to purchase the Contractor All Risk Insurance(CAR) and it is a breach
of contractor. The employer’s premium paid shall be recovered through set-off as a debt from
13. Contractor under the Contract and/or the Performance Bond. Therefore, the insurance which increased
by employer from RM 160,000.00 to RM 180,000.00 is allowed. The final price for the said insurance
will be RM 180,000.00.
(b) Contractor is required to provide a desktop computer in the Preliminaries section for the
Resident Engineer’s use but this item was left unpriced, i.e. BQ item was left blank in the
rate/amount column in the contract document. However the Architect instructed the Contractor
to provide a laptop computer costing RM10,000.00 for the Resident Engineer instead of the
desktop computer as specified in the Preliminaries. (10 marks)
There are no specific rules or standard methods stated that all elements mentioned in the preliminaries
must be priced. As the desktop computer was left unpriced in the preliminaries section, it shall be
deemed that the rates and prices of the desktop computer had been included in the Bills of Quantities
by contractor.
Under PAM Contract 2006 Clause 11.6, it stated that the valuation of variations and work executed by
the Contractor for which Provisional Quantity is included in the Contract and the expenditure of
Provisional Sums (other than for work for which a tender had been accepted under Clause 27.14) shall
be made in accordance with the following rules :
Based on Clause 11.6(e), it stated that the rate and price of desktop computer which priced in
somewhere else should be determined and omitted. This clause can be supported by Clause 11.6(a), it
says that where work is of a similar character to, is executed under similar condition as, and does not
significantly change the quantity of work as set out in the Contract Documents, the rates and prices in
the Schedule of Rates shall determine the valuation. Which means that the Quantity Surveyor shall
omit the price of desktop computer based on fair market price which can be obtained from the
previous similar Contract Document or quotation from supplier. While the price of laptop computer
costing RM10,000.00 shall be added in the Contract Document.
(c) A wash trough as required and priced in the Preliminaries section was not constructed due
to site constraints imposed later by the Employer. However, the vehicles leaving the site during
construction were always kept clean including the public roads using water jet washing and
full-timed workers. (10 marks)
PAM Contract 2006 Clause 11.1(d)(iii) says that a Variation of any changes to the provisions in the
Contract with regards to access to or utilisation of any specific part of the Site. In this case, the wash
trough which has been priced in Preliminaries should be constructed at site but was not constructed
due to site constraints and replaced with water jet washing and full-time workers. Thus, it is
considered a change to provision in the Contract Document.
Therefore, under Clause 11.6(e), the price of wash trough should be omitted in the Contract
Document. While under Clause 11.6(a) for items with a similar character and conditions, the price of
water jet washing should be added into the Contract Document.
14. Clause 11.6(d) is a valuation of Variations where the work cannot be properly measured and valued
by using daywork rates or actual cost plus 15%. This method is only using when meets certain
per-condition when the work cannot be properly measured and valued.
The quantity of cleaning water cannot be properly measured and contractor cannot get the compensate
for actual costs incurred. Next, day work rate is mentioned in the contract which is used for labour,
plant and materials. Site staff must record and verified the daywork and send it to the architect and
also the consultants.
(d) Mistake was made in the price for excavation through rocks at RM50 per m3. Item was not
rationalised during contract documentation. However, original quantity in BQ is 100 m3 but
re-measured as-built quantity was 20,000 m3. The Contractor submitted a claim for revised
rates of RM 150 per m3 for the total quantity of 20,000 m3. (10 marks)
According to PAM Contract 2006 (With Quantities) Clause 11.6 stated 6 rules to be applied under
different situation of Variations. It is use to satisfy the terms of Variation and Architect’s Instructions
under Clause 11.1. In this clause, it defines variation as the alteration or modification of the design,
quality or quantity of the Works. But, Architect should be mindful not to instruct variation beyond the
contractual ambit, as such act could be regarded as “ultra vires” and could expose the Architect
directly liable under tort. Reversely, if such instruction calls for variation to the contractual provision,
the contractor cannot look for the Employer for compensation.
Under clause 11.6(b), where work is of similar character to work as 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 difference by Quantity Surveyor.
In the situation provided in the question above, there is a significant change of quantity with similar
character of work from the original quantity of 100 m3 to 20,000 m3 in the contract BQ for the
excavation through rocks. In this case, Quantity Surveyor has to make a fair adjustment for the
differences of varied work (PAM Contract with Quantities under Clause 11.6b). The submitted rate
for the works by Contractor might be base on the work done in the contract, but when there are huge
varied work, the rate and price will be revise accordingly. In this case, Quantity Surveyor should take
the original contract rates and price as stated in the contract to create a reference of the new
adjustment.