comparison standard form nazib faizal

Assignment

MBG 1243 –Construction Contract Studies 1

Lecture : En Norazam Othman

Comparative analysis on clauses concerning payment and obligations:

1. PWD Form 203A2. PWD Form DB (Rev. 2007)

3. PAM Contract 2006 (With Quantities)

NAZIB FAIZAL (MB101105)

Faculty of Build Environment

Course : MSc- Construction Contract Management

MB101105-Nazib Faizal 1

Group Assignment 1-MBG 1223 Land, Planning, and Environmental Law

1 General view in payment obligationClauses that related to the payment obligation are in Table 1. PAM 2006 governs the payment in clause 30. PWD 203A governs the payment in clause 28, and PWD DB governs payment in clause 31, 36, 53, 55, and 57.

Table 1 Clauses that related to the payment obligation

No Standard Form Clause Description1 PAM 2006 25 Determination of contractor’s employment by employer

26 Determination of own employment by contractor30 Certificates and payment37 Performance bond

2 PWD 203A 28 Payment to contractor and interim certificates31 Final account and payment certificate54 Payments upon termination60 Payment to nominated sub-contractor or supplier

3 PWD DB 31 Default in payment of wages36 Direct payments to contractor’s consultants53 Interim payments55 Effect of PD’s certificates and payment by government57 Advance payment63 Payments upon termination

In this assignment, I would like to compare base on:

1. Parties who involves in payment obligation2. Type of payment3. Interim payment stages statement4. Advance payment5. Procedure of Interim Payment6. Schedule of issuing interim certificates7. Requirement upon issuing interim certificates8. Contractor’s obligation in applying payment9. Procedure of payment upon completion10. Wages of workmen affects the final payment11. Retention fund/performance bond12. Payment for liquidated damages13. Payments upon termination14. Performance bond15. Direct payment to the third party16. Late payment by government/employer


2 ComparisonNo Item PAM 2006 PWD 203A PWD DB1 Parties who involves

in payment obligation:

parties involves:1. Contractor2. Architect3. Quantity Surveyor4. Employer

parties involves1. Contractor2. Superintending Officer(SO),

or SO’s representatives3. Employer

parties involves:1. Contractor2. Project Director (PD)3. Employer

2 Type of payments Stages Stages Advance payment and stages3 Interim payment

stages statementStated in appendix Stated in appendix Stated in appendix

4 Advance payment No advance payment No advance payment 25% of the value of the contract sum

5 Procedure of interim payment

Procedure:1. Contractor submit a payment

application at the interim claim interval as stated in the Appendix

2. Architect and Quantity consider and ascertain the amount in 21 days

3. Architect issues the interim certificates base on consideration and certain amount

4. Employer pay the contractor base on interim certificates issued by architect

Procedure:1. Contractor shall complete the

work as in Appendix2. Regarding to the complete

work, SO shall make valuation of the complete work in 14 days

3. SO issuing interim certificates4. Government pays the

contractor base on interim certificates

Procedure:1. Contractor shall submit

interim payment application2. PD consider and ascertain

the amount in 28 days3. PD issuing the interim

payment certificates4. Government pays the

contractor base on interim certificates

6 Schedule of issuing interim certificates

21 days 14 days 28 days

7 Schedule of interim certificates payment

Within the period of honouring certificates

Stated in appendix, if it not stated = 30 days

Stated in appendix, if it not stated = 30 days

8 Contractor’s obligation in applying

Complete details and particulars as required by the Architect and

To make a works is done and SP can make a valuation

1. The value of works done and properly executed



No Item PAM 2006 PWD 203A PWD DBpayment Quantity Surveyor 2. The amount on any valuation

of variations or the instructions by the PD (clause 24

3. The amount in regard to the expenditure of provisional sums executed or expended (clause 25)

4. The value of any goods or unfixed materials delivered to or adjacent to the site intended for use or to be incorporated into the works

5. The upervision reports as required by the PD under clause 13.1

9 Procedure of payment upon completion

1. After six month after practical completion of the works, the contractor shall send all documents necessary for preparing the final count to Architect and Quantity Surveyor

2. If the parties are agree in final account, then architect shall issues penultimate certificate for the release of the retention sums and any other outstanding sum

3. Within 21 days after the period oh honouring certificates for the payment of the penultimate certificate and within 21 days after the certificate of making good

1. Within 3 month after the issuance of the certificate of practical completion, the contractor shall submit application to enable the final account prepared by the SO. If contractor failed, SO shall forthwith make the assessment based on available document for the final account

2. Within 3 months after the expiry of the defects liability period for the whole of the works or 3 month after the issue of the certificate of completion of making good defects under clause 48 hereof, SO shall issue the

1. Within 3 month after issuance of the certificate of completion of making good defects or the certificate of completion of maintenance (if any), Contractor shall submit to PD a statement of the final account showing in detail the value

2. PD proceed to verify the final account based on the document which is given by contractor

3. If final account is verified, PD shall issues Final certificate which consists of balance sum

4. Final payment is paid by the government to the



No Item PAM 2006 PWD 203A PWD DBdefects has been issued, in the event no penultimate certificate has been issued; the final certificate shall be issued by architect

4. Final certificate are issued which consists of final account and the total sums certified in previous payment certificates

5. If any difference between balance due to contractor and employer, the balance shall be payable by the employer to the contractor within the period of honouring certificates

final certificate that consists of supported documents, full particulars complete with receipt, vouchers, final valuation, any amount determined in clause 31.1

3. Final payment is paid by the government to the contractor. Final payment will not be paid unless the contractor satisfied the SO in his obligation due to the workmen

contractor. Final payment will not be paid unless the contractor satisfied the SO in his obligation due to the workmen

10 Wages of workmen affects the final payment

Final payment is not affected by wages matter between the workmen that have been employed by the contractor, workmen employed by sub contractor, labor, and etc

Wages of all the workmen has to be paid and all contributions under the Employment Act 1955, The Employee;s Social Security act 1969, The Employee’s provident Fund Act 1991 and any other laws relevant to the employment of workmen have been paid.

Wages of all the workmen has to be paid and all contributions under the Employment Act 1955, The Employee;s Social Security act 1969, The Employee’s provident Fund Act 1991 and any other laws relevant to the employment of workmen have been paid.

11 Retention fund Retention fund will release after Architect issued Pnultimate Certificate. Performance bond shall be refunded to the contractor without interest on the completion of works.

No retention fund is applied in government standard form.

No retention fund is applied in government standard form.

12 Payment for liquidated damages

If the contractor fails to complete the works by the completion date, Architect shall issue a

If the contractor fails to complete the works by the date for completion or within any

If the contractor fails to complete the works by the date for completion or within any



No Item PAM 2006 PWD 203A PWD DBcertificate on non-completion. Upon the issuance of the certificate of non completion , the contractor shall pay or allow to the employer a sum calculated at the rate stated in appendix

extended time granted pursuant to clause 43, the SO shall issues a certificate of non completion to the contractor and notice the intention of the Government to impose liquidated and ascertained damages that stated in appendix.

extended time granted pursuant to clause 49, the PD shall issues a certificate of non completion to the contractor and notice the intention of the Government to impose liquidated and ascertained damages that stated in appendix.

13 Payment upon termination

Base on reasonable valuation and put in the final account.

Base on reasonable valuation. If contract is terminated under clause 50 and 52, the amount to be paid (in so far as such amounts or items have not already been covered by payments on account made to the contractor) shall be the following:a. The value of all work carried

out up to the date of termination

b. The amounts payable in respect of any preliminary items so far as the work of service comprised therein has been carried out or performed and a proper proportion of any such items which have been partially carried out or performed

c. The cost of materials or goods reasonably ordered for the works which have been delivered to the contractor or of which the contractor is legally liable to accept

Base on reasonable valuation. If contract is terminated under clause 50 and 52, the amount to be paid (in so far as such amounts or items have not already been covered by payments on account made to the contractor) shall be the following:a. The value of all work carried

out up to the date of termination

b. The amounts payable in respect of any preliminary items so far as the work of service comprised therein has been carried out or performed and a proper proportion of any such items which have been partially carried out or performed

c. The cost of materials or goods reasonably ordered for the works which have been delivered to the contractor or of which the contractor is legally liable to



No Item PAM 2006 PWD 203A PWD DBdelivery

d. A sum being the amount of any expenditure reasonably incurred by the contractor in the expectation of completing the whole of the works in so far such expenditure has not been recovered by any other payments

e. The reasonable cost of any protection works and removal of equipment and site facilities pursuant to termination as provided under the contract.

accept deliveryd. A sum being the amount of

any expenditure reasonably incurred by the contractor in the expectation of completing the whole of the works in so far such expenditure has not been recovered by any other payments

e. The reasonable cost of any protection works and removal of equipment and site facilities pursuant to termination as provided under the contract.

14 Performance bond In the event, If the employer determine the employment of the contractor, or if there is any breach of contract, the employer may call on the performance bond and utilize and make payments out of or deduction from the performance bond for the completion of and/or rectification of the works and reimbursement of loss, and or/expense suffered by the employer.In the event, if the contractor determines his own employment, the employer shall return the performance bond to the contractor for cancellation.

If the contractor fails to performs any of his obligations under the contract and such failure is non remedied in accordance with this contract, the government shall be entitled to call upon the performance bond, wholly or partially.The performance bond may be released or refunded to the contractor upon the completion of works.

If the contractor fails to performs any of his obligations under the contract and such failure is non remedied in accordance with this contract, the government shall be entitled to call upon the performance bond, wholly or partially.The performance bond may be released or refunded to the contractor upon the completion of works.

15 Direct Payment to the No provision for direct payment Government shall paid the Applied in direct payment to the



No Item PAM 2006 PWD 203A PWD DBthird party to the subcontractor/consultants nominated sub

contractor/suppliers according to interim certificates/final certificates

contractor’s consultants. For the purpose of payment to the consultant, the contractor and the consultant shall enter an irrevocable Deed of Assignment for the assignment of any money due to the consultant to be paid directly by the government.

16 Late payment by employer/government

Employer shall pay interest basen on the Maybank Lending Tate plus one percent

No provision No provision


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