FACULTY OF SCIENCE, TECHNOLOGY, ENGINEERING &

MATHEMATICS
BSc. (Hons) in Quantity Surveying

Assignment 1
Course code

: QUS 4205

Course Name

: Contract Administration 2

Lecturer

: Mrs Ong Poh Lin

Date

: 26th February 2016

Group members :

Name

Matric number

Mah Ker Yi
Yong Shu Teng
Yapp Ka Chee
Cheung Memtem

I14005119
I14004886
I12001445
I12001276

List and explain the difference and similarity between the following
clauses in the PAM standard form of Building Contract 2006 (with
quantities) and the JKR Building Contract with Bills of Quantity,
Form 203A.
a) Contract Document
The Contract Documents as aforesaid shall remain in the custody of the S.O. and shall be produced as
and when required by the Contractor.
Copies of Contract Documents

One certified true copy of the Contract Documents

Two copies of the Contract Drawings
Two copies of the unpriced Bills of Quantities

S.O. shall have two copies of such further working drawings or details as are reasonably necessary
either to explain and amplify the Contract Drawings or the Specification.
Contractor shall keep one copy of the Contract Drawings, the Specification (if any), unpriced Bills of
Quantities and documents on the Site and the S.O. shall at all reasonable times have access to the
same.
Return to the S.O. all drawings, details, specifications, unpriced copy of Bills of Quantities and other
documents of like nature after completion of work.
None of the documents hereinbefore mentioned shall be used by the Contractor for any purpose other
than this Contract.

PWD Form 203A

Clause 8.0 Contract Documents
Clause 8.1 Custody of the Contract
Documents
Clause 8.2 Sufficiency of Contract
Documents
Clause 12.0 Programme of Work
Relevant
clauses

PAM Contract 2006

Clause 3.0 Contract Documents,
Programme and As-built Drawings
Clause 3.1 Contract Documents
Clause 3.2 Custody of Tender
Documents
Clause 3.3 Copies of Documents
Clause 3.4 Further drawings or details
Clause 3.5 Work Programme
Clause 3.6 Programme not part of
Contract
Clause 3.7 Architects acceptance of
Programme
Clause 3.8 Availability of Documents
Clause 3.9 Limitation of use of
Documents
Clause 3.10 As-built Drawings

The Similarity between PWD Form 203A and PAM Contract 2006

Contract
Documents

PWD Form 203A

Form of Tender
Letter of Acceptance of Tender
Contract Drawings
Bills of Quantities
Specifications
Treasurys instructions

Documents required in 2 sets, one

original with S.O. and contractor.
Contractor shall return to S.O. all
drawings, details, specification and
unpriced / price Bills of Quantities.
Custody of
Documents

PAM Contract 2006

Letter of Award
Articles of Agreement
Conditions of Contract
Contract Drawings
Contract Bills
Following descending order, i.e. Letter
of Award, etc. Therefore, pay more
attention to the drafting of Letter of
Award.
Original shall remain with consultants.
2 sets of original copy shall signed and
kept by S.O. / QS and Contractor.
2 sets copy of Contract Drawings kept
by Contractor.
2 sets copy of unpriced Contract Bills
give to Contractor.
2 sets copy of Working Drawings,
further drawings and details drawing
give to Contractor to enable contractor
can carry out the works on time.
Contractor will keep 1 copy of Contract
Drawings, Specification, unpriced Bills
of Quantites on the site and S.O. have
access to the same.

The Difference between PWD Form 203A and PAM Contract 2006
Sufficiency of
Contract
Documents
Copies of
Tender
Documents

PWD Form 203A

S.O. will issue instruction regarding any
discrepancies in the Contract Document

PAM Contract 2006

Not stated.

Not stated.

One original signed copy to Contractor

Not stated.

Further
Drawings or
details

Works
Programme

Programme

Contractor to request in sufficient time

to enable the Architect to issue
instructions within a period which
would not materially delay the progress
of the affected works having regard to
the Completion date.
A programme of works is not provided by Standard time period is 21days from
the S.O., the contractor shall within receipt of LA
fourteen days after the date of the Letter Standard requirement is six copies,
of Acceptance, contractor must submit it unless require more
to the S.O. to get his approval for the Shall provide to the Architect for his
work in such forms and details as the S.O. information from time to time
reasonably determined.
Not stated.
Not constitute part of contract even

not part of
Contract
Architects
acceptance or
programme

Not stated.

Not stated.
Availability of
document

Not stated.
Limitation of
use of
documents
Not stated.
As-built
drawings and
operation and
maintenance
manuals

physically incorporated into Contract

Documents.
The acceptance by the Architect does
not relieve the Contractor from
responsibilities under the Contract
Contractor must keep a copy of
Contract Drawings and the unpriced
Contract bills on the site to make sure
Architect and Consultant and their
authorised representatives at all
reasonable times.
According to Clause 3.1, the contractor
shall use the contract document all the
time other than use contract. Except for
the purpose of the Contract, all parties
shall not disclose any of rates and price
in the Contract Bills
Contractor must supply As-built
drawings
and
operation
and
maintenance manuals to any Nominated
Sub-Contractor as specified in the
Contract Document. When these are not
specified, contractor shall supply and
ensure that the nominated sub
contractor supplies four copies of the
above items before the completion date.

b) Performance Bond
A performance bond, also known as a contract bond, is a surety bond issued by an insurance company
or a bank to guarantee satisfactory completion of a project by a contractor. A job requiring a payment
and performance bond will usually require a bid bond, to bid the job. When the job is awarded to the
winning bid, a payment and performance bond will then be required as a security to the job
completion.
For example, a contractor may cause a performance bond to be issued in favor of a client for whom
the contractor is constructing a building. If the contractor fails to construct the building according to
the specifications laid out by the contract (most often due to the bankruptcy of the contractor), the
client is guaranteed compensation for any monetary loss up to the amount of the performance bond.
Performance bonds are commonly used in the construction and development of real property, where
an owner or investor may require the developer to assure that contractors or project managers procure
such bonds in order to guarantee that the value of the work will not be lost in the case of an
unfortunate event (such as insolvency of the contractor). In other cases, a performance bond may be
requested to be issued in other large contracts besides civil construction projects. Another example of
this use is in commodity contracts where the seller is asked to provide a Bond to reassure the buyer
that if the commodity being sold is not in fact delivered (for whatever reason) the buyer will at least
receive compensation for his lost costs.
One of the performance bonds is Performance Bond/Performance Guarantee Sum in PWD Form
203A and Performance Bond in PAM Contract 2006.
PWD Form 203A
Clause 13.0 Performance Bond/Performance
Guarantee Sum
Clause 22.2 Design Guarantee Bond
Clause 42.1(f) Performance Bond Not
Affected

PAM Contract 2006

Clause 37.0 Performance Bond
Clause 37.1 Submission of Performance Bond
Clause 37.2 Form of Performance Bond
Clause 37.3 Validity of the Performance Bond
Clause 37.4 Failure of the Performance Bond
Clause 37.5 Payments from the Performance
Bond
Clause 37.6 Return of Performance Bond

The Similarity between PWD Form 203A and PAM Contract 2006
Similarity
Documents

PWD Form 203A

The Performance Bond is the
compulsory document which must be
submitted by the Contractor under
clause 13.1(a).

PAM Contract 2006

The Performance Bond is the compulsory
document that the Contractor require
submit to the Employer under clause
37.1.

Amount
function

The sum of Performance Bond shall

be equivalent to five percent of the

The sum of Performance Bond shall

equivalent to the percentage stated in the

and
of

Performance
Bond

total Contract Sum as specified in

Appendix to secure the due
performance of the obligation under
this Contract by the Contractor under
clause 13.1(a).

Appendix (if not stated is 5% of the

Contract Sum) as a security for
performance and observance by the
Contractor of his obligation under
Contract up to Practical Completion of
the Work under 37.1.

Extend
validity

The Contractor shall extend the valid

period of the Performance Bond due
the delayed Defect Liability Period
or the issuance of the Certificate of
Completion of Making Goods
Defects

The Contractor shall before the expiry of

the Performance Bond, extend the
duration of the Performance Bond to
expire three Months after the projected
Practical Completion of Works under
clause 37.3.

The Difference between PWD Form 203A and PAM Contract 2006
Difference
Submission of
Performance
Bond

PWD Form 203A

The Contractor shall provide the
Performance Bond on the date of the
possession of Site under clause
13.1(a).

PAM Contract 2006

The Contractor shall submit the
Performance Bond to the Employer
before the Date of Commencement under
clause 37.1.

Form
of
Performance
Bond

Performance Bond shall be in the

form as in Appendix issued by an
approved licensed band or financial
institution incorporated in Malaysia
according to the Clause 13.1(a).

Performance Bond shall be in the form as

specified unless approved by Employer
under Clause 37.2.

Validity
of
Performance
Bond

The Performance Bond shall remain

valid and effective until twelve
months after the expiry of the Defect
Liability Period or the issuance of the
Certificate of Completion of Making
Goods Defect under clause 13.1(a).

The Performance Bond shall be

remaining valid until three months after
the Completion Date. Contractor has the
duty to extend the duration to expire after
the projected Practical Completion of the
Works under clause 37.3.

Failure
to
extend validity

If the Contractor fail to submit the

Performance Bond on the date of
possession of Site, will deduction of
ten percent shall be make for the first
interim payments and subsequent
interim payment until the total
amount deducted aggregate to sum
equivalent to five percent of the
Contract Sum under clause 13.2.
According to the Clause 13.3, the
Government shall be entitled at any
time to call upon the Performance
Bond, the contractor fails to perform
their obligations under the Contract
and such failure is not remedied in
accordance with this Contract.

If the contractor fails to submit or

maintain the validity of Performance
Bond, Employer shall be entitled to
withhold or deduct an amount equal from
Contractors progress payments under
Clause 37.4

Under the Clause 13.4, if the

Not stated.

Not stated.

payment is made to the Government

pursuant to any claim under the
Performance Bond, the contractor
shall issue a further security in the
form of additional performance bond
or bonds for an amount not less than
the amount so paid to Government
on or prior to the date of such
payment so that the total sum of the
Performance
Bond
shall
be
maintained at all times.

Difference
PWD Form 203A
Payment from According the Clause 13.6, in the
Performance
event that this Contract is terminated
Bond
under Clause 51 (Event and
consequences of default by the
contractor)
hereof
the
said
Performance Bond or any balance
thereof shall be forfeited.

PAM Contract 2006

Based on the Clause 37.5, in the event the
Employer determines the employment of
the Contractor, the Employer may call on
the Performance Bond and utilize such
amount to complete the Works and
recover his loss and/or expenses and
refund only the balance to Contractor
upon completion of Work.

Return
of
Performance
Bond

It is divides the portion of money retained

into half and refund back to contractor
one during the issuance of certificate of
Practical Completion and the other one
during the issuance of certificate of
Making Good Defects.
In the event the Contractor determines his
own employment, the Employer shall
within 28 days return the Performance
Bond to Contractor for cancellation.

After the completion of making good

of defect and giving of the Certificate
of Completion of Making Good
Defects, the Performance Bond may
be released or refunded to the
Contractor under Clause 13.5.

For the PWD Form 203A Clause 22.2 and 42.1 (f) didnt mention in the PAM Contract 2006, it is the
difference between this two forms of contract for performance bond.
Clause 22.2 Design Guarantee Bond
The Contractor shall provide a design guarantee bond issued by the licensed bank or financial
institution before the issuance of Certificate of Practical Completion, the amount of design guarantee
bond still be 5% of the value of the said part of the works as stated in the appendix. The design
guarantee bond still remain valid for 5 years from the date of practical completion of works.
If the defect or damage occur to that particular part of works as the result of any defect, fault,
insufficiency or inadequacy in the design including workmanship, materials and equipment which has
become defective due to design default. The government have the right to claim the design guarantee

bond according to the amount losses by the government. If the design guarantee bond is not provided,
the government have the right to claim on the performance bond which is equal to the 5% of the value
of the said part of Works that provided by the contractor.
Clause 42.1 (f) Performance Bond Not Affected
The Performance Bond or balance will safety released or refunded to contractor on the completion of
Making Good Defect. It will more similar with the Clause 13.5.

Work Programme
Work programme is a document for showing how the work will be carry out and showing the duration
of different task. Thought this work programme, the Main Contractor will plan the labour force for
different period, when to bring in the machinery and when the suppliers require to supply the
materials. Furthermore, the Quantity surveyor can plan the schedule of percentage work done and
schedule of issue interim certificate based on work programme.

PWD Form 203A

Clause 12 Programme of Work

PAM Contract 2006

Clause 3.5 Works Programme
Clause 3.6 Programme not part of
Contract
Clause 3.7 Architects acceptance of
programme

The Similarity between PWD Form 203A and PAM Contract 2006

Similarity
Documents

PWD Form 203A

Programme of Work is a compulsory
document which must be issued and
approved by S.O., after the Contractor
receive the Letter of Acceptance.

PAM Contract 2006

Work Programme is the compulsory
document which must be issue to
Architect after Contractor receive the
Letter of Award.

Purpose

It is the document for S.O. to

monitoring the progress of work, it is
also the basis for assess the extension
of time and effect of delay to the
progress of work.

It is the document for Architect to

monitoring the progress of work, and
Architect can use it as a basis for
assessment the extension of time and
the effect of the delay to work progress.

Revised of
Work
Programme

If the actual work progress and

programme of work are different, the
Contractor shall provide a revised
programme
of
work
showing
necessary ratification to ensure the
project is complete within date of
completion or any extended time.

If the Works or any part of the Works is

delayed for whatever reasons, the
Architect may instruct the Contractor to
revise the Work Programme.

The Difference between PWD Form 203A and PAM Contract 2006
Difference
Date of
Submission

PWD Form 203A

If the programme of work is not
provide by the S.O., the contractor
shall provide within 14 days after
receive letter of acceptance and submit
to S.O. for approval for execute the
work.

PAM Contract 2006

The contractor shall provide at least 6
copies of work programme to Architect
within 21 days after receive letter of
award.

Consideration
for Part of
Contract

Not stated.

The Work Programme shall not be

constitute part of the Contract, whether
physically or not into the Contract
Drawings.

Fees of Extra
Document for
Client

Not stated.

If the Architect require the Contractor

to provide a revised work programme
due to the work is delayed in whatever
reasons, the Contractor shall provide
the work programme to the Architect
from time to time without charging the
client.

c) Insurance Work/Insurance of new building/work by the contractor

Insurance Works is a common requirement and is a must in a building contracts. The purpose of this
insurance is to cover the building works in progress, should loss or damage occur during construction.
It is necessary for the public sector project or private project. It also guarantee for the client in case
the contractor default in insuring. Insurance can be arranged specifically for each project or as an
annual policy covering all projects undertaken with the insurance premium paid on works turnover.

Relevant
clauses

PWD Form 203A

Clause 18.0 Insurance of Works
Clause 18.1 Taking of Insurance
Clause 18.2 Default in Insuring
Clause 18.3 Payment of Insurance in
the event of any Loss/Damage
Clause 18.4 Cancellation of Insurance
Clause 42.1(e) Insurance of Works

PAM Contract 2006

Clause 20.A Insurance of New
Buildings/Works by the Contractor
Clause 20.A.1 Contractors riks
new buildings/works
Clause 20.A.2 Additioinal riks to be
covered under the insurance
Clause 20.A.3 Placing of insurance
with licensed insurance companies
Clause 2.A.4 Application of insurance
claim proceeds

The Similarity between PWD Form 203A and PAM Contract 2006
Payment
Insurance

of

Default
Insuring

in

Risk Covered

PWD Form 203A

If any occurrences of loss or damage to
Work prior to the completion of the
Works, the Contractor shall restore the
damaged work even before the pay out
by the insurance company has been
made. All monies received from the
insurance shall be paid to the
Government first and then be released to
the Contractor by installments on the
certificate for payment issued by S.O.
under Clause 18.3.

PAM Contract 2006

Contractor start to restore loss / damage
work while waiting for insurance
payment so long as all necessary
investigation have been completed.
Insurance money paid to Employer who
retain portion meant for professional
fees and pay a balance to Contractor
based on progress of satisfactory
restored works certified by Architect up
to limit paid by insurance company
under Clause 20.A.4.

If contractor failed to renew such

insurance, the Government or S.O. may
renew such insurance and pay the
premium by decuting the amount from
any monies due to the contractor. The
Government also may extent the
insurances on behalf of the contractor,
the cost of on-cost charges under Clause
18.2.
The Contractor shall in the joint names
of the Government and Contractor
insure against loss and damage by fire,
lightning, explosion, storm, flood,
ground subsidence and others, including
materials and goods so insured until the
completion of the whole Works but
exclude temporary buildings, plant,
tools and equipment owned or hired by
contractor under Clause 18.1.

If contractor failed to insure or extend

the
insurance
coverage
period,
Employer may insure against any risk
and set-off from money to contractor in
next payment certificate under Clause
20.A.3.

Contractor take out Contractor All Risk

(CAR) Insurance, in the joints name of
the Employer, Contractor, subcontractors and all interested parties
and the insurance shall have
endorsements to cover against loss
and/or damagae by fire, lightning ,
explosion,
earthquake,
ground
subsidence and others and exclude
cover for construciton plant, tools and
equipment owned or hired by the
contractor unless otherwise stated
under Clause 20.A.1.

The Difference between PWD Form 203A and PAM Contract 2006
Placing
Insurance

Validation
period
Insurance

PWD Form 203A

PAM Contract 2006
of The said insurance with or without an According to Clause 20.A.3, the
excess clause shall be effected with an licensed insurance company should be
insurance company that approved by the approved by Employer.
S.O. according to Clause 18.1(b).
Cancellation of insurance is made 30 days
of after receipt of notice by the government.
Where claims exceed insured amount, the

According to Clause 20.A.1, insurance

will be valid after the defect. Insurance
be
extended
accordingly
when

surplus shall be borne by contractor. It

stipulates a notification procedure and
obligation the contractor to ensure a
mandatory procedure is followed any
cancellation process under clause 18.4.
Value
of According to Clause 18.1(a), full value
insured sum
thereof plus any amount which maybe
specifically stated in appendix or
elsewhere in the contract documents.
Extension of
Not stated.
Insurance

Additional
risks to be
covered under
the insurance

Insurance
Works

Not stated.

of According to Clause 42.1(e), Insurance of

the Works. Contractor should give a
notice to the insurer that the part of the
building is partial occupation/taking over
by the government.

Extension of Time has been granted.

On the other hand, Partial Completion
or early Certificate of Completion
require proportionate reduction of
insurance coverage.
CAR insurances policy for a value not
less than the contract sum, plus the sum
to cover professional fees under Clasue
20.A.1.
Under Clause 20.A.1, the notification
for renew the insurnace should be
given one(1) month before the expiry
date of insurance.
Other than risks covered under Clause
20.A.1, additional risks required e.g.
vibration cover for piling need be
specified in Contract Bills. Besides, the
design of the building may take as a
risk because there might be problem to
the drawing in one day. Thus,
contractor can cover for additional
risks.
Not stated.

Validation Period of Insurance;

Defect
Liability
Period

Contract period

Date of Commencement

Date of Completion

3 months of Insurance

OR,

Contract period

Date of Commencement

Defect
Liability
Period

3 months of Insurance

NEW Date of
Completion
Date of Completion

Reference
1. Impacts On The Building And Construction Industry | Law Teacher. 2016. Impacts On The
Building
And Construction Industry | Law Teacher. [ONLINE] Available at:
http://www.lawteacher.net/free-law-essays/contract-law/impacts-on-the-building-andconstruction-industry-contract-law-essay.php. [Accessed 28 January 2016].
2. Lawteacher.net, (2016). Impacts On The Building And Construction Industry | Law Teacher.
[online]
Available at: http://www.lawteacher.net/free-law-essays/contractlaw/impacts-on-thebuilding-and-construction-industry-contract-law-essay.php [Accessed
2 Feb. 2016].

3. . 2016. . [ONLINE] Available at:

https://www.masterbuilders.asn.au/__data/assets/pdf_file/0014/73103/Construction-WorksInsurance-fact-sheet-07-12.pdf. [Accessed 3 February 2016].