CONTRACT & ESTIMATING

Contractor and supplier

Main contractor
Sub contractor
Domestic sub contractor
Nominated sub contractor
Nominated supplier

STRUKTUR ORGANISASI DALAM TENDER
KONVENSIONAL

Klien

Pasukan Perunding
⚫Arkitek

⚫ Jurutera Awam & Struktur
⚫Jurutera Mekanikal &
Elektrikal
⚫ Juruukur Bahan

Kontraktor Utama

Menggunakan khidmat perunding
Atau kendalian jabatan

STRUKTUR ORGANISASI DALAM TENDER REKA
DAN BINA (DESIGN AND BUILD)

Klien

Kontraktor Utama

Pasukan Perunding
⚫Arkitek

⚫ Jurutera Awam & Struktur
⚫Jurutera Mekanikal &
Elektrikal
⚫ Juruukur Bahan

Kontraktor bertanggungjawab untuk mengemukakan harga tawaran di dalam dokumen pre bidding berdasarkan kepada
kehendak penyata klien tersebut serta akan menyediakan rekabentuk dan mengawasi kerja sehingga projek siap.



Main contractor

- An individual that signs a contract to perform a part or
all of the obligations.

- Direct contractual relationship between the client.
- Obligation : refer to Standard Form Of Contract

Public Work Department (PWD) 203 ( Revision 2007)

Definition of Subcontractor

 A subcontractor is an individual that signs a
contract to perform a part of the obligations of
another's contract.

Domestic Sub –contractor

 A subcontractor is hired by a general contractor (or
prime contractor, or main contractor) to perform a
specific task as part of the overall project.

 Payment by the main contractor
 Types of domestic subcontractor :
i. Material – supply goods(nominated supplier)
ii. Labour - skilled, semi-skilled and unskilled

Nominated Sub-contractor

 Direct contractual relationship between the client.
 Payment by the owner
 Special work- Pile work, electrical work, water supply,

air condition work, fire prevention and others.
 Payment by the owner

Nominated Supplier

 Appointed by owner to supply material and
construction item to main contractor for the
project.

 Contract with main contractor

 Payment by the main contractor

exercises

 Explain the Contract principles are made according to
Contract Act 1950 (Amendments 1974)

 Explain the Relationship between Contract and
Tender

 Explain briefly the types of contract.
 State the differences between Domestic Sub contractor

and Nominated Sub Contractor
 State the reason of nominated supplier appointed.
 State the purpose of standard forms

CHAPTER 4 :
THE STANDARD CONDITION OF

CONTRACT
(refer to the standard form of contract)

Standard form of contract

Document or form containing the
terms and conditions of the
contract.
Purpose:
- To provide basic legal framework
- The legal relationship between

the parties

Standard Forms of contract
(government/public sector)

JKR form 2003

Two types of standard form of contract which are usually
used for contract works in public work department.

i. Standard Form Of Contract Public Work Department
(PWD) 203 ( Revision 2010) (Based on DRAWING
AND SPESIFICATION)-Projek segera,x sempat
sediakan BQ

ii. Standard Form of Contract Public Work
Department(PWD) 203A ( Revision 2010) (Based on
BILLS OF QUANTITIES)- Projek2 besar

Private sector

 PAM(Pertubuhan Arkitek Malaysia)
 IEM(Institution of engineers Malaysia)

Standard Form of Contract





Purpose of standard forms

 To provide basic legal framework evidencing the legal
relationship between the parties.

 To put in place the administrative procedure to effect the
legal and commercial relationship between the parties for
achieving the purposes of the contract

 To establish the ambit of the powers and duties of contract
administration under the contract between parties.

 To furnish mechanism for regulating the conduct of
commercial relationship between parties.

CONTENT

Clause 1 : Definition.
Clause 2: Contract period.
Clause 3 : The S.O and S.O representative.
Clause 4: S.O’s Right To Take Action
Clause 5: S.O instruction.
Clause 10: Obligation Of the contractor.
Clause:14,15,16,21,23,28,35,40,44,51,53,79….
…………………..81

Clause 1: Definition

 Contract Documents:
- Means the documents forming the tender including:
1. Form of Tender;
2. Letter of Acceptance of Tender;
3. Contract Drawings;
4. Bill of Quantities and others

Continue Clause 1: Definition

 "S.O.“ : The Superintending Officer

 "S.O.'s Representatives“ : Any person or persons
delegated in writing by the S.O.

 "Works“ : The works specified in the Contract
Documents and shall include temporary works.

 Site: ………………………………………………………….
 Contractor: ………………………………………………...
 Defect liability period:……………………………………….

Clause 2.0: Contract period

Start finish

Contract period

Clause 3: S.O. and S.O.'S Representative

S.O
 Responsible for the overall supervision and

direction of the Works

S.O.'s Representative
 Responsible to the S.O
 Watch and supervise the Works and to test

and examine any materials or goods

Continue clause 3:

S.O.'s Authority to Delegate

 From time to time in writing delegate to the
S.O.'s Representative

 If the Contractor is not satisfied with any
decision of the S.O.'s Representative, the
Contractor shall refer the matter to the S.O

Clause 5: S.O Instructions

Refer to the drawings, details and/or written instructions
in regard to:

- Variation refer to clause 24
- Any discrepancy in or between the Contract

Documents as referred to in clause 8.2(b)
- The removal from the Site of any materials

or goods

Continue Clause 5:

- The removal and/or re-execution of any
works executed by the Contractor

- Opening up for inspection of any work
covered up

Instructions procedure

 All instructions issued by the S.O. shall be in writing.

 If such instruction is given orally, the S.O. shall then issue a
written instruction within seven (7) days from the date of
such oral instruction is given.

 If within seven (7) days after receipt of a written notice
from the S.O , the Contractor does not comply, the S.O.
without prejudice to :

1. undertake the work
2. pay another Contractor to continue the work
3. The cost will be deduct from any money( performance

bond)
4. The Contractor shall be responsible for all costs of work

under clause 5.3

Clause 9: Representations, Warranties, and
Undertaking of the contractor.

Clause 9: Perwakilan, Jaminan,Akujanji kontraktor.

The Contractor represents and warrants to the
Government that:
1. Corporation validly existing under the laws of Malaysia
2. The Contractor has obtained a valid registration with the

Construction Industry Development Board
3. Perform its obligations under this Contract
4. It has necessary financial and technical capability to undertake the

Works

Contractor undertakes :
1. Comply all requirement
2. Pay all taxes
3. Ensure all employees comply with all law

Clause 10: Obligations of the contractor

The Contractor shall:
 Construct, complete, test and commission the Works in

accordance with the Contract
 Perform the Works with good management practice

and to the best advantage of the Government;
 Ensure that the Works comply with the requirements of

this Contract
 Perform the Works by exercising professional judgment

and practice, requisite skill, care and diligence.

Continue clause 10

 At all times perform the Works in such manner. as will
always safeguard and protect the Government's
interest

 Inform the Government immediately in writing of the
occurrence of any factor or event, which is likely to
affect the Works.

 Provide and maintain throughout the Contract Period
, categories of qualified and competent personnel
necessary to perform the Works;

Continue Clause 10

 Provide and maintain at its own cost and expense all
equipment and materials necessary for the proper and
effective performance of the Works;

 instruct and supervise its staffs and sub-contractor in
carrying out the Works' repairs and other works in
relation to the Works;

 make good any defect, imperfection, shrinkage or any
other fault whatsoever which may appear during the
Defects Liability Period

 carry out any other obligations and responsibilities
under this Contract.

Exercise

1.With your own group.....

Refer to the Standard Form of Contract P.W.D

(Rev.2007), clause 5

provide mind map of instructions procedure…

2. Individual

- Discuss clearly responsibility of S.O.'s Representative

- The…………shall be responsible for the overall supervision and
direction of the works.

- To perform a good work and protect the Government's
interest , what should contractor do……………………...refer to

standard form of contract P.W.D(Rev.2007)
- Explain clearly contractor obligation

Refer to Clause 1 Standard Form of Contract P.W.D (Rev.
2007), Restate the terms below;

 Contractor
 Contract document
 Site
 S.O Representatives
 Work

CHAPTER 5 :
PRELIMINARY
ESTIMATING METHODS

DEFINITION

 Preliminary estimation is to estimate the cost of
project.

 An estimate is a calculation of the quantities of
various items of work.

 The estimation is done based on drawings and
technical information.

 Preliminary Estimation is usually done after an
architect’s drawing is completed.

Purpose Of Preliminary Estimation

o To obtain the clients budget.
o Contractors tendering project.
o To know the profit rate.
o Quotation from subcontractor to general

contractor.
o To know the percentage and types of

building elements.

The Method Of Preliminary Estimation

Unit Valuation Method
Floor Area Method
Cubic Content Method

Unit Valuation Method

Estimate : Students, patients, beds and
others

= Standard Units X Cost/Unit

existing prices

Example 1

The construction cost of the existing school which
was completed two years ago is RM 100,000.00 and
can accommodate 100 students. Estimate the cost of
new school which can accommodate 200 students.

SOLUTION

Cost of a completed school building = RM 100,000.00

accommodate = 100 students

Therefore,

cost per unit (students) = RM 100,000.00 / 100
= RM 1, 000.00/student

Therefore, = 200 x RM 1, 000.00
estimated new cost = RM 200,000.00

EXAMPLE 2

Refer to the table below, calculate the cost of new
hostel which can accommodate 3000 students.
Given the factor of cost increment is 20%.

Type Construction Number of
Costs (RM) students
Hostel A 3,000,000.00
Hostel B 1700
2,500,000.00
1500

SOLUTION

 Cost per unit (Hostel A) = 3000000 / 1700 = RM 1764.71

 Cost per unit (Hostel B) = 2500000/ 1500 = RM 1666.67

 Average cost per unit = RM 1764.71+RM 1666.67 =RM 1715.69

2

 Increment of 20% = RM 1715.69 x 20/100

= RM 343.14

 Total cost per unit = RM 1715.69 + RM 343.14 = RM 2058.83

 New hostel cost = RM 2058.83x 3000
= RM 6176490.00

Floor Area Method

formula

Estimate :

= floor area X price/meter2

Area = length X width
Garage or porch = ½ ( length X width)

Floor Area Method

Refer to the diagram below, calculate the cost of the building
using the Floor Area Method. Assume cost rates as RM250.00/ m
2.

10.0m

25.0m

SOLUTION

Building Area = Length x width
= 25.0 m x 10.00m

= 250.00 m2

Building Cost = Floor Area x price rate / sq meter
= 250.00 x RM 250.00
= RM 62 500.00

example

 Base on the diagram below, calculate the
cost of the building, assume cost rate as Rm
350m2

8.2 m

Room 1 Living area 3.2 m
4.5 m
5.2 m

Room 2 garaj
Garaj

5m

solution

8.2 m

y 3.2 m

Room 1 X

5.2 m Garage 4.5 m

Room 2

5m

garaj

solution

Area 1

Room 1,room 2 & X area = 5 x 5.2

= 26 m

Area 2

Y area = ( 8.2-5)x 3.2m

= 10.24 m

Area 3

Garage area = ½ (4.5 x 3.2)

= 7.2 m

cost

Building cost = floor area x price rate

= (26 + 10.24 +7.2) x rm 250.00

= 43.44 x rm 250.00

= Rm 10 860.00

Cubic content method

Estimate = Volume x unit cost (cost/m3)

Volume= length x width x height
However, the height of the building depends on the types of roof which is:
i. Flat roof
ii. Pitched roof

Types of Roof ii. Pitched roof

i. Flat roof