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CONTRACT ADMINISTRATION (PART 2) - Coggle Diagram
CONTRACT ADMINISTRATION (PART 2)
2.1 POSSESION OF SITE
Possession of the Site as complete shall be given on or before the “date for Possession” stated in the Letter of Acceptance
Usually, the site possession will be given 2 weeks after issuance of Letter of Acceptance
Restrictions upon possession of the Site shall be stated in the Appendix in the Contract Documents (ex: site may be given in section, parts and any other restrictions)
Delay in giving site possession less than 3 months
S.O. may issue instructions to the revision of the “Date for Possession” and “Date for Completion” if delay in giving section or part of site possession.
Contractor shall not be entitled to any claim for loss or damage caused by delay or have intention to terminate the contract
S.O. shall give written notice to the Contractor if the delay in possession of the site is beyond three months from “Date from Possession”.
Contractor may notice S.O. within fourteen days to agree to proceed with the works or request S.O to terminate the contract.
No work shall be commenced unless the Performance Bond and insurance policies have been deposited with the Government or the S.O.
2.2 INSURANCES AND PERFORMANCE BOND
Insurance
Once LA is received, contractor is required to submit the insurance and performance bond.
To protect the client, contractor, workers and public
Importance of insurance
Claims by the public and employees in the event of an accident or damage
Clients and contractors can feel comfortable and secure in their work
Protect the contractor in the event of an unwanted incident as soon as the contractor begins work on the site
Types of Insurance
Insurance of Work (clause 18.0). Guarantee given by the 3rd party as a protection to the client and contractor if there is anything happen to the construction site. Ex: fire, explosion typhoon, floods and riots
Insurance of public liability Guarantee given by the 3rd party as a protection to the client and contractor Protection if any accident happen which caused to injury or death to the public, damages to public property who were at the site or surrounding of the site
Insurance of Work + Insurance of Public Liability = Contractor All Risk
Social Security Organization (SOCSO) (clause 17.0) Guarantee given by the 3rd party as a protection to the workers of contractor and workers for nominated subcontractor if accident happen on construction site or other places (depends on scheme) which caused to injury or death
Performance Bond
Guarantee given by the 3rd party as a protection to the client on the compliance of contractor to take the responsibility to complete the project as required in the contract
Types of performance bond
Guarantee Insurance
Guarantee given by the insurance company in respect of the contractor’s compliance in fulfilling the responsibilities in performing his work as agreed in the contract Insurance company will pay the compensation for any loss or damages if the contractor failed to fulfil the contract obligation The contract will have to pay a certain amount of premium set by the insurance company
Guarantee Bank
The contractor must make the application and the collateral required. Collateral is in the form of permanent assets such as land, houses and etc.
Guarantee sum
The guarantee is in the form of money but it is taken gradually Interim payment is deducted by 10% of the amount needed until the accumulated amount reaches to 5% of the total contract price.
2.3 VARIATIONS
Variation is defined as any works that change from the original contract in terms of design, materials or quantity generally instruct by S.O
The S.O. is empowered to issue variation order which has to be confirmed in writing. These changes would not weaken the contract and contractor shall comply with the instruction.
Variations can be:
Alteration or modification of the design, quality or quantity of works shown in the drawings, BQ and specifications.
Addition, omission or substitution of works
Removal in the kind or standard or any materials or goods to be used in the works for the contract.