PROJECT MANAGEMENT (EMT 634) 7) THE IMPORTANCE OF PROPER TENDER, PROCUREMENT AND CONTRACT , PROCUREMENT AND CONTRACT MANAGEMENT 1. The increasing awareness of player in the constructions industry. 2. The increasing assertions of liability contractor and constructions professional. (@) Highland Tower case (b) Maybank Finance incident 3. The increasing readiness of court to impose or proportions liability on constructions professional. 4. To prevent unwarranted claims situations (a) an unnamed recent arbitrations between a subcontractor and a major contractor (b) a recent dispute between a nominated subcontractor and a major employer Some suggestions: (a) Read the contract as a whole and follow it (©) Quality management systems. Itis a solutions to avoid disaster or a mere buzz word of the nineties? (©) Care in amending standard form of contract. So often client or their professional advisor amend standard form of contract without duly considering the impact. But on one recent p[roject the government department sought to amend it form of management contract (and it s associated work contract) for use in a management project. The result was unclear, even the whose the party were. Throughout the project “work package contractor” wrongly believed they were in the contractwith management contractor, as the contract seem to be indicated when in fact they were in direct contract with the client, The misunderstanding was not surprising since the contract described itself as a “management contract” 734-PROJECT MANAGEMENT (EMT 634) @ under which the work package contractor do enter into contract with the management contractor. Many provisions of standard form are closely interrelated so that changes t, for example a variations clause, may affect a payment provisions and /or an extensions of time provisions. Mere deletions of a paragraph can throw all the ‘numbering out of sequence, so cross-references have to be changed. Inconsistency may also arise if, for example , a fitness-for purpose clause is inserted in a design and build contract without amending a cluse about complying with the client requirement — if those requirement would not produce a building fit for it purpose, which obligations prevail? Ariother common provision in a contract deeming of the other party to be ware of information’s outside the contract documentations. It is common, for example , for a subcontractor to be deemed to have knowledge of the mian contract document, or for main contractor to be deemed to be aware of the result of site surveys. Deeming provisions can be deceptively onerous and counter productive. The use of standard form published by the industry collectively may have the advantage that the contra proferetem rule may not apply. This benefit however be lost when one party start amending the clauses indiscriminately. A further advantage of using standard form is that there are available many decisions from the court in guiding the user in the interoperations of major clauses. 35-PROJECT MANAGEMENT (EMT 634) 8) GENERAL TENDERING PROBLEMS POSSIBLE SOLUTION 8(a) 8(b) 80) 8d) 8@) 8) &e) ‘Tender document are often expensive and cost are not wholly refundable upon the submission of tenders. The requirements for contractor to buy and put a deposit have the advantage of discouraging frivolously tenders. However, this procedure increases the burden of cost incurred in tender preparation on unsuccessful tenderers. The long list of information required as part of the tender document creates extra financial burden on the contractors. It is suggested that it be scaled down to those information that are absolutely necessary for the proper execution of the contract. The time normally allowed for the preparation and presentation of tenders is short. Sufficient time must be allowed taking into account the size and complexity of the project and information to be supplied by the tenderers, This will allow contractors to carry out detailed analysis of the tender documentation and also reduce error resulting from pressure of work. Tender planning requires good quality information by way of both drawings and bills of quantities. Sketchy drawing and bills of quantities full of provisional sums and quantities work against good competitive tendering. During pre-estimating, important data such price and rate need to take detail from previous project records to avoid any technical error. It is because, all the error will effect the cost and sometimes give serious implication. ‘Drawing left behind the work program schedule, as a result the quantity surveyor have short time to do document tender. The changing of drawing to meet client and authority satisfaction will effect the initial provision. ~36-