DB LECTURE 9

PART 1: INSURANCE
Insurances – in general :
• To deal with ‘risks’ (eg accidents, fire, flood
collapse, damage, etc)/general public
• To enable the Contractor to overcome the
financial impact of realised risks, so he can
finish the job!
• The requirement for Insurance is stipulated in
Contract, because Employer also wants
Contractor to finish the job!

Insurances :
1. The INSURANCES required under Cl. 19 & 20 are to
‘backup’ / ’support’ – and do not prejudice - the
INDEMNITIES that the Contractor shields the
Employer with (against 3rd party claims) under Cl.18,
for:
(such that contractor is liable –
Does not mean the contractor can pay up -> ir unable to pay up,
The remaining amount comes back to the employer ->
Hence employer wants to be insured against this.)
- 18(1) Personal Injuries
- 18(2) Damage to Property
1. Cl. 19 requires insurance against injury to persons
and damage to property – ie “Public / 3rd-Party
Liability” insurance.
2. Cl. 20 requires insurance to pay for replacement of
destroyed / damaged Works – ie “CAR” insurance..

Insurances … a recap:
The Insurances usually have two modes
(reflecting different risk profiles to the insurer):
1. Occurrences ‘pre-completion’ – ie Work Site activities.
2. Occurrences ‘post-completion’ – ie Occupied
premises
Note that Employer’s insurance usually only kicks in for
‘occupancy’ (ie upon ‘handover’) …
… so contract documents often specify coverage
periods such that ‘pre-completion’ insurance overlaps
‘handover’.

The Insurance modes of ‘pre-completion’ and ‘postcompletion’

usually respectively have (i) stated periods
of coverage, and (ii) provision for automatic extension
upon payment of additional premium –
Hence, Contractor will need to extend the ‘validity’ of
the insurance if there are delays …
… and the party responsible for the delay would bear the
cost of the extension premium.
(eg if the delay is due to a variation, then ‘T’-based
preliminaries such as insurance premiums may
constitute additional payment to Contractor).

The Insurance will usually ‘name’ both the Contractor

(and nominated sub-contractors and direct contractors)
and the Employer (and agents) as ‘insured parties’ …
… as these are the parties exposed to 3rd party claims.
eg CAR Insurance coverage is based on the premium
paid in consideration of the replacement value of the
Works.
eg Public Liability Insurance coverage is based on an
insured sum, which must be determined by the Employer
based on consideration of risks faced.

The Employer’s own (existing or previous-phase)

Property can be insured one or two ways:
1. Through ‘cross-liability’ provisions in the PL Insurance
– thus allowing the Employer to claim as if a 3rd Party,
and/or …
2. By including the Property’s replacement value as an
insured risk in the CAR Insurance.

Public Liability Insurance

... typically insures against 3rd-Party Claims for
- damage to property or
- injury to persons.
Contractor’s / Construction All-Risks (CAR) Insurance
... typically insures against the insured
replacement value of damaged/destroyed Works.

(take value of 100% completion. Fire may come just before u finish.)

Public Liability Insurance typically insures against 3 rd-

Party Claims for damage to property or injury to persons,
and covers …
1. named persons (+ declared works) which are ‘insured’ by way of
paying a premium: Contractor (incl. own sub-contractors & suppliers),
Employer, + named NSC/S & DSC/S and Direct Contractors
2. damage / injury (A) caused in the course of declared constructionrelated
works : (i) pre-completion when carrying-out the Works, (ii) postcompletion
when carrying out outstanding works (including defectrectification
works), and (B) caused by ‘defects’ in the insured Works.
3. to an insured limit (eg $1M), and usually as a max. liability for any one
event.

Contractor’s / Construction All-Risks (CAR) Insurance

typically insures against the insured replacement value
of damaged/destroyed Works, and covers …
1. damage / destruction of the Works howsoever and by whomsoever
caused (ie “all risks”.
2. damage / destruction of the Works (A) caused in the course of
declared construction-related works : (i) pre-completion when carryingout
the Works, (ii) post-completion when carrying out outstanding works
(including defect-rectification works), and (B) by ‘defects’ in the insured
Works.
3. to an insured amount – usually the aggregate value of Contract Sums
of Principal Main Contractor (incl. his own suppliers and subcontractors),
NSC/S & DSC/S (which can be initially PC/Provisional Sums,
etc), and Direct Contractors (incl. for Employer’s set-up works).

1. Note: Commercially … The more ‘risk’ that is

insured, the higher the premium!
2. The Employer can procure the insurance
himself, otherwise the Conditions provide for
the Contractor to procure it. Either way, the
Employer bears the cost, either …
(a) The Employer pays directly,
(b) The insurance premium is allowed for as a Provisional Sum (see
19(2)(a),
(c) The insurance premiums are part of the Contractor’s preliminaries
– ie part of the Contract Sum.

(To balane btw enough coverage vs. high premiums)

PART 2: NSC/S and Prime Cost (PC),
PROVISIONAL & CONTINGENCY SUMS
Sub-Contract vs Main Contract :
» Sub-contract: employed by the Main Contractor
» Main Contract: employed by the Employer
» ‘Chain’ or ‘matrix’ of contracts
» ‘Principal’ vs ‘Secondary’ Main (‘Direct’) Contracts
• Note: Clause 17: "The Contractor shall permit the
Site to be used for the execution of work not
forming part of the Contract by artists, tradesmen
or other contractors engaged by the Employer.”
• Principal Contractor takes overall responsibility for
the Site (eg for safety & health, environmental
controls, security & access control, etc)

•Assignment and Sub-Contracting

Clause 15 provides that:
“The Contractor shall perform a main
contractor’s principal functions …"
“ This performance shall be of the essence of
the Contract.”
“The Contractor shall neither assign nor make
arrangements for the vicarious performance of
such functions by any other person …”
ie the [Main] Contractor plays a pivotal role in the arrangement of
resources to carry out the Works

• “… controlling the Site with his own site staff…”

• “… co-ordinating the work of any sub-contractors …”
• “… ordering of materials for the Works…”
ie the Conditions recognise the practice & necessity of
resourcing by sub-contract

Nominated or Designated cf ‘Domestic’

• NSC/S or DSC/S selected by/on behalf of the
Employer
• ‘Domestic’ Sub-Contractor is selected by the
Contractor himself

• NSC/S or DSC/S selected on behalf of the

Employer
» eg refer to Clause 28(1) :
Work, materials or goods which are to be carried out
or supplied by a subcontractor selected on behalf of
the Employer but employed by and under the control
of the Contractor.

• ‘Domestic’ Sub-Contractor is selected by the

Contractor himself
» eg subject to Clause 15(2) which requires that:
the Contractor shall not engage or permit the
engagement of any sub-contractor without the prior
consent of the Architect.
Any sub-contractor, direct or indirect [eg ‘sub-subcontractor’
engaged by a sub-contractor], properly
objected to by the Architect shall not be permitted to
enter the Site.

Sub-Contractor cf Supplier
» SUB-CONTRACTORS (Designated or Nominated)-
• 28(1)(a) : carry out works or carry out works and
supply materials or goods
» SUPPLIERS (Designated or Nominated)-
• 28(1)(b) : for the provision or supply of goods or
materials only, without any work of fixing
installation, erection or construction.

Nomination cf Designation
• The difference between ‘designated’ and
‘nominated’ sub-contractors or suppliers?
» DESIGNATED Sub-Contractors or Suppliers
• Clause 28(1)(c) : where the identity of the subcontractor
is stated in the Specification or other
Contract Documents./ tender documents
• [May include persons with whom the Employer or
the Architect on his behalf has entered into
contractual relations before this Main Contract on
terms that such prior contracts with the Employer
will be novated in favour of the Contractor.]

» NOMINATED Sub-Contractors or Suppliers

• Where the sub-contractor is ‘selected’ by the
Architect.
• But the identity of the sub-contractor is NOT
stated in the Specification or other Contract
Documents.

Usually selected after the close of the tender.

Hence, DESIGNATED & NOMINATED is sameish, just WHEN the identity is disclosed to the
contractor.

• Note:
Such prior contracts with the Employer
typically involves in practice:
1. the Employer (or Architect on his behalf) issuing an
invitation to quote to potential designated
subcontractors (including to state the terms of subcontract
- eg citing the SIA standard form of subcontract,
plus particular terms of scope of works, etc,
and stating that the contract will be ‘novated’ to the Main
Contractor once appointed).
2. obtaining ‘quotations’ then selecting one and issuing a
‘letter of award’ (stating acceptance of the quoted offer
and confirming they will be ‘designated’ in the main
contract documents).

•Why have Sub-Contractors?

• Specialisation / Training and Resources in a particular trade /
type of work.
• eg Bricklayer, Pavior, Carpenter, Electrician, Plumber,
Etc

• Sub-Contractors attend to the work at the applicable times

(not for the full duration of the Works)
- so Sub-Contractors can move from site to site for continuity
of work,
- so Main Contractors only pay for construction services as
and when required, not needing to maintain a full workforce*
• eg joiners only come into to do fitouts once the main building
elements and finishes are in place.
* Main Contractor will therefore usually only provide general workers,
site management staff (including sub-contracts coordination) and
major plant & equipment and site set-up and security, etc.

•Why have Nominated or Designated Sub-

Contractors and Suppliers (N/DSC/S)?
• So that the Employer / Architect can specify a particular
material / product, specialist installer, specialist design &
supply & install, etc.
» eg selection of a particular batch of marble slab.
» eg selection of a specialist sub-contractor for design,
supply and installation of a water feature.

• So that materials / products with long lead / delivery time can

be ordered before the award of the Main Contract.
• eg to quickly prepare quotation documents and call for
quotations so an early order for Lifts and Escalators can
allow adequate fabrication and delivery (shipping) time (9mths).

• So that the particular brand / model (eg a latest release) can

be selected later on (eg just before completion and
occupation / use).
• eg to select the audio-visual systems at the latest possible
moment so that the latest technology can be obtained.

• To conduct a quotation exercise to determine the lowest

market prices (and not rely on the Main Contract’s tendering
process)
• eg to call for quotations from suppliers for selected brands /
models of sanitary & plumbing wares, so that pricing is not
based on the Main Contractor’s own supplier (which may be
a higher price for these wares even though the Main
Contractor’s tender price might be the lowest overall).

Responsibility for Subcontractors:

• Clause 28(3) : sub-contractor selected on
behalf of the Employer but employed by and
under the [Main] Contractor.
» Clause 28(3) requires that the Contractor shall be
“fully responsible” for all NSC/S and DSC/S “in the
same way as for his own work or materials or those of
other sub-contractors selected and engaged by
himself…”
» The Employer shall in no circumstances be liable to
the Main Contractor for the default of any Designated
or Nominated Sub-Contractors or Suppliers.

» Clause 28(3) further requires that “… the [Main]

Contractor shall be deemed to have accepted as his
own responsibilities under this Contract ... all the
expressed or implied obligations undertaken by any
Designated or Nominated Sub-Contractor or Supplier
in his sub-contract …”

» Clause 15(3) expresses that: “the Contractor shall

make good any damage or loss suffered by the
Employer by reason of any breach of contract,
repudiation, default or failure … on the part of any subcontractor
or supplier, whether Designated or
Nominated … or privately engaged by the Contractor
…”
» However, note Clause 17: That artists, tradesmen or
other contractors engaged by the Employer for the
execution of work not forming part of the Contract
“shall be persons for whom the Employer is
responsible …”

• Both Domestic and NSC/S or DSC/S are employed /

engaged by the Contractor
Contractor does not act as Employer’s ‘agent’ to
employ / engage the sub-contractor
[ie, Employer does not hold responsibility for subcontractors,
even if nominated or designated by or
on behalf of the Employer]

Nomination of a NSC/S
» Clause 29(1) explains how;
• An NSC/S is nominated through an “instruction
from the Architect … [that] shall identify with
sufficient particularity the works or materials to be
carried out or supplied … [and that] shall identify
the Sub-contractor or Supplier selected by him...”
• This is referred to as a “Nomination Instruction”

• The Contractor shall “enter into a sub-contract

with the selected Sub-contractor or Supplier in
accordance with …”
– “… the terms, if any, stipulated by the Architect
in the Nomination Instruction”
- eg sub-contract price, contract terms,
commencement date, etc - “whether by
reference to a previous quotation … or
otherwise)”
- NOTE: this would typically be the SIA form
of Subcontract
– Else “on appropriate terms negotiated by the
[Main] Contractor.”

Rights to ‘Object’ -- under Clause 29:

Yes, under some circumstances for NSCs.
» The Main Contractor has no right under the Contract
to ‘object’ to a particular DSC/S (not least because the
DSC/S was identified at the time of tender)
[except DSC/S whose work is the subject of a PC
Sum].
» Whereas the Main Contractor has certain rights to
‘object’ to a sub-contractor or supplier being
‘nominated’…
… Clause 29(2)(a) provides that the Main Contractor
shall be entitled to object to a Nomination Instruction
on basis of:
– financial standing or solvency or
– technical competence or reliability

… Clause 29(2)(b) provides that the Main

Contractor shall be entitled to object to a
Nomination Instruction on basis of:
– terms offered by NSC/S are unsatisfactory as
they are not prepared to;
- accept equivalent responsibilities or obligations
consistent with those of the Main Contractor
- indemnify the Main Contractor
- offer firm completion or delivery dates consistent with
the Main Contract dates
- accept liability for general damages for delay
- accept terms for termination consistent with the Main
Contract Conditions
- accept reasonable liability having regard to the Main
Contractor’s obligations

Things that the main contractor is responsible for, thus needs support from sub contractors for him to comply to his
obligations. No acceptable for sub contractor to deny responsibility for these n leave the main contractor in the
lurch, if they were to do something wrong.

Consider …
• Be careful of 'down payment' terms in NSC/S
quotations – this exposes the Main Contractor to
up-front payments!
• Should requirements for Performance Bond be
clearly stated as a requirement when calling for
quotes from potential NSC/S?

D/NSC/S and P.C., Prov & Contingency Sum

What are PC, Provisional and Contingency Sums?
- Amounts ($) allocated to an item of work / supply in
lieu of a Contractor’s ‘price’ during tender ….
… “work that cannot be sufficiently precisely
described for pricing purposes at the time of the
tendering…” – given an allocated allowance for that thing to be done later, even if u don’t
know what the extent of the works is going to be.
[see 28(2), 28(7)]
[As distinct to prices for work /supply by DSC/S as
known at the time of tendering, and thus is included
in the Contract Sum [see 28(7)]]

Why are PC, Provisional and Contingency Sums

mentioned together with NSC/S & DSC/S?
- Such Amounts serve to indicate that, inter alia, the
Employer may select a subcontractor to do that item
of works / supply:
Work materials or goods which are to be carried out
or supplied by a sub-contractor selected on behalf of
the Employer but employed by and under the control
of the Contractor shall be identified in the Contract
Documents in one of the following ways: … [namely,
PC, Provisional and Contingency Sums.]

For “P.C.” or “Prime Cost” Sums:

- the Architect shall select a subcontractor (ie
NSC/S or DSC/S*) to carry out the work or
supply the goods or materials
For “Provisional” or “Contingency” Sums:
- the Architect shall select a subcontractor (ie
NSC/S) or may instruct the Main Contractor to
carry out the work or supply the goods or
materials himself
* only DSC/S where, despite the DSC/S being identified, the “work cannot
be sufficiently precisely described for pricing at the time of tendering…”

What is the difference between “Provisional”

and “Contingency” Sums?
For “Provisional Sum” (and “PC Sum”):
“both the Contract Period and any preliminary
items of expenditure in the Schedule of Rates
shall be deemed inclusive of such work or
materials [or goods] as are described in …
relevant P.C. or Provisional Sum items …”
ie the P.C. or Provisional Sum represents a known
and defined item of work / supply.

A “Contingency Sum” :
“shall be valued on the basis that neither the
Contract Period nor the preliminary items of
expenditure in the Schedule of Rates have been
calculated or priced in the expectation of this
work being ordered…”
ie the Contingency Sum represents unknown and
undefined work / supply.

Contingency Sum
(as defined and used in the SIA form of Contract),
… a ‘known unknown’ ! **
- The nature of the work / supply is known, but the
specifics are unknown.
eg a Contingency Sum for ‘structural repairs’ to be
determined during the works when damage is
discovered upon being uncovered
** whereas an ‘unknown unknown’ is a totally unforeseeable event /
condition for which an amount is reserved

u might wna put aside some money that might occur even if u cant be sure if it will. But put the money aside
just in case.

Provisional Sum
(as defined and used in the SIA form of Contract):
eg refer to Standard Method of Measurement (SMM):
- whereas items of work / supply under a Provisional Sum
may not be “sufficiently precisely described for pricing at
the time of tendering…”
… but as distinct to a ‘Contingency Sum’ :
… they are sufficiently defined / described
such that ‘programming,’ ‘planning,’ and
‘preliminaries’ {ie ‘attendance’} + ‘profit’
can be priced for by the Main Contractor.

Definite scope of work, but not enough detail for price in tender, so just put a provisional
sum to cover for that works in tender first.

Typically required in
description of work item:
• Nature & construction
• How & where included
in the building
• Quantity (extent)
• Specific limitations

» Why have P.C. and Provisional Sums?

• Consider that:
… such work items are sufficiently defined / described such that
‘programming,’ ‘planning,’ and ‘preliminaries’ {ie ‘profit’ &
‘attendance’} can be priced for by the Main Contractor.
• ie so that the work is included & considered in
determining the scope & value of the Works (Contract
Sum),
eg, which is basis for;
– Pricing for “preliminaries” / “preliminary items of expediture”
eg Insuring the Works, Site organisation (site supervisors,
site office/facilities, plant, security, safety & health, etc)
– Scope of Works relative to Programme / scheduling of work
– Within Contract Period (so no EOT applicable)
– Planning & executing Site & Construction management,
including for maintenance after completion
– [Contract Sum is basis for financing / loans]

Examples:
“Prime Cost Sum” or “Provisional Sum”
- eg Signage, Ironmongery, Sanitary & Plumbing
Wares, Waterproofing, Curtain Walls, Tiles & Stone,
etc
“Contingency Sum” -unforseeable scopes of work
- eg repairs to existing buildings (eg structures,
waterproofing, etc) – of specifics and extent to be
‘discovered’ or ‘determined’ during the works.

How are PC, Provisional and Contingency Sums

applied?
• Architect to issue an instruction to carry out the
works / supply the goods or materials
[see 1(4)(d)&(e)]
- ‘Nomination Instruction’ for an NSC/S
[under Prime Cost or Provisional Sum only]
[or DSC/S if item is not priced in Contract Sum,
under Prime Cost Sum only]
- To order the Main Contractor
[under Provisional or Contingency Sum only]

• Payment of sums due to Contractor,

for works carried out or materials/goods supplied:
- by the Main Contractor:
… to be “valued in accordance with the provisions
for valuing variations in Clause 12…”
- by the NSC/S:
… to be “determined by deducting the relevant P.C.
or Provisional or Contingency Sums from the
Contract Sum and substituting … the amount of the
… Sub-Contractor’s or Supplier’s accounts…”

• Note that Contractor is entitled to ‘profit’ &/or

‘attendance’ on top of the value of work under a
PC, Provisional or Contingency Sum.
[To be priced in the SOR / BQ at tender for PC & Provisional Sums,
or added on top of valuation of work for Contingency Sum]
• What is ‘attendance’?
- cf 12(4)(e)(ii) which distinguishes
“prime cost” (“material,” “transport” & “labour”), from
[‘attendance’ – which includes] :
“ordinary plant,” “tools and existing scaffolding,”
“preliminaries,” “supervision” & “overheads.”

What is “Prime Cost” ?

• ‘In general terms:
Prime Cost’ = Total of …
-direct material costs,
-direct labour costs, and
- direct expenses [eg transport, tools, etc]
• ‘Prime Cost’ excludes any Main Contractor mark-ups for profit &
attendance / overheads, which pricing is typically invited through
the tender documents (eg as a % of the Prime Cost amount).
• ‘Prime Cost’ is also often referring to the ‘Sub-Contract Sum’
(ie excluding the Main Contractor’s ‘profit & attendance’)
[Compare with “Managed” or “Prime Cost” Contracts in which the
Main Contractor prices a ‘management fee’ but all work and
materials is by subcontractors, usually selected by Employer]

Prime Cost can therefore involve;

• Supply + install cost
• Supply only cost
eg allowing a P.C. Rate for supply of flooring marble
(on top of which the 'installation' should be priced
for by the Main Contractor when tenderering,
inclusive of profit & overheads, etc).

• NOTE: Although the terms “Prime Cost”,

“Provisional Sum” and “Contingency” are widely
used in the industry and have general concepts of
what they involve …
… for the Contract, the terms are defined by how
they operate; ie by the provisions of the Contract
(ie is contract-specific [and may vary from
contract-to-contract]).

Conditions of Sub-Contract (SIA form):

• A standard form of sub-contract published by
the SIA intended “for use in conjunction with
the Main Contract”
• The Main Contract does not expressly require the use of
the SIA’s standard form of Conditions of Sub-Contract -
but it would be prudent (and typical practice) for the
Architect to include the Conditions of Sub-Contract as
part of the “terms” that may be prescribed under the
Nomination Instruction.

• Of particular note:
» Article 4.1: Where Main Contract Conditions are to
apply “mutatis mutandis”
[Latin phrase meaning "by changing those things which need
to be changed" or more simply "the necessary changes
having been made"]
- Contractor …. Sub-Contractor
- Architect / QS / Employer …. Contractor

• Note: the importance of references back to the

Main Contract (between Main Contractor and
Employer):
Once the D/NSC/S is engaged by the Main
Contractor, there are no more contractual ties
between the Employer and D/NSC/S, thus the Main
Contractor will need the power to ‘pass down’
orders from the Architect to the D/NSC/S, and the
Architect must be able to order the Main
Contractor in regard to the sub-contract works

Allow employer to tell architect -> tell main con -> subcon (so the info is passed down the
chain.)

General damages for Delay

• [Note: Why ‘general damages’ and not ‘liquidated
damages’? Things to consider :
– LD of the Main Con is disproportionate to the
sub-contract sum?
– GD must be ‘proved’, so the D/NSC/S is
protected from frivolous or opportunistic
attributing of proportion of liability for delays. –
– What if Main Con took LD from each subcontractor
that totalled in excess of the actual
LD liable under the Main Contract?

» Sub-Contract Maintenance Period

When sub contract complete, main contract may not yet be anywhere near complete, but
we also want sub contract maintenance to be concurrent w main con maintenance period,
but also want subcontractor to be responsible for any defects prior to main con
maintenance, subsequent to sub con completion -> (an extension of the maintenance
period for the sub-con at the front end than back end of the period.)
• "Pre-Maintenance Period" commences upon
issuance of the Sub-Contract Completion
Certificate to the D/NSC/S by the Main Contractor
• Sub-Contract Maintenance Certificate issued to
D/NSC/S by Main Contractor upon the later of:
– all defects have been made good
– issuance of the Maintenance Certificate under
the Main Contract*
*Note: to ensure the D/NSC/S is around to support the
Main Contractor in his contractual obligations (eg to
make good defects)

» Insurance of the Works

Because works of NSC are alr allowed for under PC / Provisional Sum. If insurance is on
value of the work incl PC ?Prov Sums -> insurance sovering sub con work. Hence sub con
not necessary to get insurance for his works. Main con insurance covers sub con works.
• The Main Contract provides that the [Main]
Contractor shall insure against loss or damage by
fire, earthquake or other risks set out in the
Appendix to all works executed
• Sub-Contract Clause likewise provides that the
“[Main] Contractor will take out insurance to their
full value under Clause 20 of the Main Contract
Conditions in respect of all Sub-Contract Works
and all unfixed materials or goods of the Sub-
Contractor …”
PART 3: TERMINATION
(under SIA form of Main Contract)

A difference between 'termination of services /

employment' under terms of contract (eg under
a Termination Certificate) ... USUALLY THIS IN SIA ^
vs “reliance by the Employer upon any alleged
repudiation by the Contractor” to terminate the
contract itself!
... which may take effect additionally or as alternative to
reliance by Employer on a Termination Certificate)
... ie termination of services/employment is without
prejudice to any right of the Employer to treat the
Contract as repudiated by the Contractor under general
law.

So lets start with a recap on “making” a

Contract:
The ‘elements’ of a Contract:
• Offer & Acceptance
(of 'payment' and promised ‘performance’ of obligations – mirror image)

• Consideration
(ie of mutual benefit or exchange of something of value)
(ie the 'price' of the 'promise')

• Intention for legal binding

(intention to create legal relations – to be able to legally enforce rights)

• Formed / existence / “made” (v void / nullity):

• Capacity to Contract
(eg age, state of mind)
• Certainty of Terms
• Mistake / Misunderstanding
Compare with the contract basis of a ‘meeting of the
minds’ to come to a mutual understanding / agreement
• Misrepresentation
• Duress or Undue Influence
• Illegality

… the life of a contract (part 1):

[CONTRACT IS 'MADE'] (material date of acceptance of offer)
[CONTRACTOR'S 'EMPLOYMENT' (IE SUPPLY OF GOODS/SERVICES)
BEGINS] (automatically, unless otherwise stated)
... pre-Works preparatory activities, eg Programme, Make-up of Prices,
PB, Prelims, etc ...
... extension/revision of "Contractual Commencement Date", if any ...
===========================================================

… the life of a contract (part 2):

===========================================================
['WORKS' COMMENCE] (on "Contractual Commencement Date")
<<<Take "Possession" of Work Site>>>
... "Contract Period" + "Delays" & "EOT" - in which "Works" are carried
out.
['WORKS' COMPLETE] (ie upon date certified in 'substantial' "Completion
Certificate" or "Certificate of Re-Entry")
-------------------------------------------------------------------------------------------------------------------------
[MAINTENANCE / DEFECTS LIABILITY STARTS]
("Maintenance / Defects Liability Period" commences automatically upon
completion)
[MAINTENANCE / DEFECTS LIABILITY ENDS]
(ie upon date certified in "Maintenance Certificate")
============================================================

… the life of a contract (part 3):

============================================================
[CONTRACTOR'S 'EMPLOYMENT' (IE SUPPLY OF GOODS/SERVICES)
ENDS]
(automatically, unless otherwise determined OR terminated)
... Works finished by another contractor (if 'termination' Contractor's
employment applied) ...
... final performance obligations (eg final payment with LD/set-offs etc) ...
['DISCHARGE' OF CONTRACT BY FULL PERFORMANCE]
– if not prematurely discharged by 'termination'.

<more diagrams 67-70>

TERMINATION
(under SIA form of Main Contract)
"https://www.google.com.sg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB4QFj
AA&url=https%3A%2F%2Fwww.ashurst.com%2Fdoc.aspx%3Fid_Resource%3D4638&e
i=2rO7VLv4HYX78QW_gYLACw&usg=AFQjCNFTkBBJXViGPJ2Q5QsFuOU_vB16Ww "
informs that:
(a) "Strictly speaking "termination" means that the contract is
"discharged", that is, the future, unaccrued obligations owed by the
parties fall away. The contract does not actually cease to exist. Rather,
upon the innocent party electing to treat his liabilities to perform as at an
end, the primary obligations of the party in breach to perform the contract
are replaced by secondary obligations to pay damages for the loss arising
from the breach."
(b) ""Rescission" ... refers to the retrospective avoidance of a voidable
contract. Here the contractual rights and obligations remain in place until
the innocent party opts to rescind the contract, at which point the
rescission operates to render the contract a nullity."

> "Discharge" of a Contract is by the following:

(a) By "Performance" (respectively of the parties of their obligations).
(b) By “Termination - By Agreement”
-By Contract Terms ...
... eg of 'expiry' of the contract's validity period.
... eg of termination of the Contractor's employment [see SIA form]
-By Consent / Settlement
(c) By “Termination - By Frustration”
(contract cant continue)
(d) By “Termination - By election to accept a Repudiatory Breach”
(rather than to affirm the contract). // party said sth that leads one to believe that he is not going to fulfil a part of the
contract.)

... but what is ‘repudiation by the Contractor ' and ‘general law ' referring to?
" http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-26 ”
explains that:
"In the absence of express agreement or contractual termination
provisions, the common law enables an innocent party to terminate a
contract in the following circumstances [of repudiation]:
(a). a defaulting party commits a fundamental breach of the contract;
(b). a defaulting party evinces a subjective intention not to be bound
by the contact or an objective indication of inability to execute the
contract properly, for instance by deliberately and consistently
breaching the contract despite repeated warnings or notices by the
innocent party;
(c). where a party informs the other that he does not intend to
perform the contract any longer, or conducts himself in such a manner
as to render his own future performance impossible. This is known as
anticipatory breach."
> WHY? ... In the SIA form: Contractor's 'employment'
is terminated, not the Contract per se : -- keep the contractor running
... because after "termination of the employment of
the Contractor" ...
1. ... the Works still need to be completed by another contractor,
Also: retain NSC/S|DSC/S (to finish off the work, and provide
warranties, etc)
2. ... and the Contractor is subject to a "Cost of Termination
Certificate";
3. ... ie the 'termination terms/clause' still operates after
termination of the employment of the Contractor.

-- we still want certain terms of the contract to operate even tho we have gotten rid of the incumbent
contractor.

At [51] in LW Infrastructure v Lim Chin San Contractors [2011] SGHC 163

Justice Prakash clarifies that:
There is ... a clear conceptual distinction between termination of the
contract and termination of one’s employment under the contract. This
distinction was explained in Chow Kok Fong[‘s cited book] (... at p 598):
The activation of the termination proceedings usually operates to alter
the employer’s obligations for payments.
... [W]here the termination provision provides for the contract to be
terminated ... the effect is that all the arrangements under the contract
comes to an end. In these circumstances, an architect or engineer
becomes functus officio and he can no longer certify payments or
administer the contract. ... For this reason, the wording used in the
provisions of contracts like the JCT and the SIA standard forms
distinguish carefully between the determination of a contractor’s
employment and the termination of a contract.

This "clear conceptual distinction between termination of the

contract and termination of one’s employment under the
contract" makes sense as:
1. Employer wants works to be finished off by another Contractor,
and
(i) for LD for late completion to still apply on the original Contractor,
(if the lateness is due to original contractor’s fault then he is still liable to LD if the contract is still
alive.)
and
(ii) various other rights (contract terms) to apply.
2. The Architect has a certifying role, which is preserved if only the
'employment' (rather than 'contract' itself) is terminated. – if not it would mean that architect’s
appointment, powers n authority doesn’t exist anymore
3. Possibly, so that important contractual obligations survive (such
as for execution of collateral warranties, indemnities,
confidentiality & IP & non-competitor undertakings, etc).
4. Possibly to defer the commencement of time-bar limitation
periods.

(2 modes of termination under SIA)

Clause 32:
Termination [of Contractor’s employment/services] by Employer

Under Clause 32, termination [of Contractor’s

employment/services] by Employer takes the
following forms:
1. Clause 32(1): Termination without Default by the Contractor
2. Clause 32(2): Termination for Default by the Contractor
3. Sub-Clause 32(7): Termination on Insolvency
• (eg in situation of Contractor bankruptcy, etc)
4. Sub-Clause 32(5) & 32(10): Due to repudiation
by Contractor (under general law)
(repudiation involves a declaration by a party to the contract
that they do not intend or refuse to perform a contract
obligation; an anticipatory breach of a contract.)

To effect a termination of the Contractor’s

employment the Employer will need to give the
Contractor a written “Notice of Termination”
» For ‘Termination without Default’ only the Notice of
Termination is served, whereas; -if contractor at no fault, employer can do the termination
himself
» For ‘Termination for Default’ the Notice of Termination
must be accompanied by a “Termination Certificate”
issued by the Architect – claiming that the contractor is being terminated because he is in
fault, that needs to be verified by the architect who issues termination cert.

Under Clause 32(2) - the Architect is empowered

to issue a “Termination Certificate”
Clause 32(4) -
• The Termination Certificate shall:
» state that “the Employer may terminate the
employment of the Contractor”
» state the grounds (& identify the paragraphs) under
Clause 32(3) of the Conditions entitling the Employer
to terminate

Clause 32(3) sets out the Grounds on which the

Architect may issue a Termination Certificate:
» Programme (Cl. 4) or Make-up of Prices (Cl. 5)
» Assignment or permitting of vicarious performance of
principal functions without consent (Cl. 15(1)
» Failure to dismiss a sub-contractor from Site (Cl. 15(2)
» Suspended work without justification or working
without diligence and due expedition (eg Cl. 21)
» Failure to remove / replace non-compliant work (Cl.
11(1)&(2) [although 1(7) may be another option?]
» Removal of plant, goods or material without consent
(Cl.16)

Clause 32(3) sets out the Grounds on which the

Architect may issue a Termination Certificate,
AND sets out ‘timelines’ for each ground ...
eg Architect can only issue a Termination
Certificate after “1 month’s notice in writing”
to the Contractor for (a); (c); (d); (h).
If these notice periods are not given, the validity
of the Termination Certificate may be brought
into question.

To put Clause 32(3) [Termination Certificate] in

context:
1. Termination can be either in accordance with the terms
of the contract, or in accordance with general law (eg
repudiatory breach).
2. The basis/justification for ‘Termination Certificate’ (ie to
terminate premised on Contractor’s default), includes
grounds with warning notices and Contractor-failures
(as above).
3. Similarly, the Courts would expect/impose
basis/justification for termination in general law.

Clause 33:
Termination and Suspension [of Contractor’s employment/services] by
Contractor
Now looking at Clause 32(1): Termination by Employer
without Default by the Contractor:
Clause 32(1) - Employer may terminate the
Contractor's employment/services at any time
and for any reason! (by giving a written ‘Notice
of Termination’ to the Contractor)
Note: if -
» no “Termination Certificate” from Architect …
» no entitlement under general law for Employer to treat
the Contract as repudiated …
… then Contractor is entitled to compensation.
(and Architect has no certifying power as to the amount
of compensation).

Other Clauses:
Clause 32(5) - Damages Contractor’s Only
Remedy
The only remedy to a contractor shall be by :
(a) if 32(1) is applicable: compensation*, else
(b) “in damages.”
*Note: 32(1) states that the Contractor’s entitlement
shall be to “compensation for all damage and loss
suffered by him as a consequence of the termination of
his employment, including loss of profit (if any) on any
uncompleted parts of the Works.”

» Clause 32(8) - Engagement of Other Contractors

• Other contractors may be engaged by the
Employer to complete the remaining work
• The other contractors may use temporary
buildings, plant, tools, equipment, goods and
unfixed materials - all of which shall be left on Site
when the Contractor yields possession, “all of
which shall vest in and be deemed to be the
property of the Employer.”**

Clause 33: Termination and Suspension by

Contractor
Clause 33(1)&(2):
» By a written “Notice of Termination” the Contractor
may terminate his employment under the Contract on
the grounds stated in Cl. 33(1)(a), (b) , (c) & (d).

Power to Suspend Work:

Clause 33(4)
» Contractor may suspend work;
• where Architect fails to issue a certificate (other
than an interim certificate*) or statement in
writing pursuant to 31(11)
• within 14 days after giving 1 month’s notice
» *Note: Contractor may otherwise suspend work in
accordance with Sn 23 & 26 of SOP Act

there is a contractual way to suspend n statutory way to suspend.

PART 4: PSSSCOC COMPARISONS
Sia form usually used for private projects. But if proj is for public
sector (e.g. govt agency) normally PSSCOC applies.

PSSCOC (Public Sector Standard Conditions

of Contract)
http://www.bca.gov.sg/PSSCOC/
psscoc_construction_works.html
» PSSCOC (Construction Works) – build only
» PSSCOC (Design And Build)
» Standard Conditions For Nominated Sub-Contract

PSSCOC For Construction Works

» The Public Sector Standard Conditions of Contract
(PSSCOC) was developed to enable a common
contract form to be used in all public sector
construction projects...
» The PSSCOC for Construction Works first published in
1995, had undergone several reviews. The second and
third editions were launched in July 1999 and January
2004 respectively. The fourth edition was launched in
March 2005 to be in line with the Building and
Construction Industry Security of Payment Act 2004
which came into operation in April 2005.
» See BCA website (address above) for current version.

<PSSCOC CONTENTS PAGE ON SLIDE 92-105> - he skip.

Notable differences / comparisons between

PSSCOC and SIA forms of contract:
Superintending Officer (SO)
» [SIA = Architect]
... S.O. need not be an Architect or PE (so no statutory requirement
for impartiality, but must abide by contract provisions).
» "Superintending Officer" means the person, firm or
corporation appointed as such by the Employer
(Government or the statutory body) for the purposes of
[administering] the Contract.
» Superintending Officer's Authority to Delegate:
• The Superintending Officer's Representative (SO
Rep) - shall carry out such duties and exercise
such authority as delegated by SO
• The SO or the SO Rep may appoint in writing any
number of persons to assist the SO Rep

SO Instructions
» Ref: Clause 2.5
» In PSSCOC there is no type of ‘order’ called a
‘direction’ (only Instructions, but which can operate in
similar way).
» Contractor may, within 7 days, confirm in writing any
oral instruction of the SO and if such confirmation is
not contradicted in writing within 7 days by the SO, it
shall be deemed to be an instruction of the SO.

Security Deposit
» Ref: Clause 4.5
» In PSSCOC there is no Retention Monies

The PSSCOC Contractor also provides that the Contractor may,

in lieu of a cash deposit provide a guarantee [ie from a 3rd party
guarantor] for an equivalent amount from ...
… a Monetary Authority of Singapore (MAS)-approved bank [eg
as a Banker’s Guarantee] or
… MAS-approved insurance company [eg as an Insurance Bond]
and in the prescribed [eg specimen] form.

Security Deposit … further notes:

» Although SIA form provides for Retention Monies,
common "practice" in the industry is for the
requirement for additional requirement of
'Performance Bond' to be written into the Contract
Documents.
… as a 'Banker's Guarantee' or 'Insurance Bond'.
Performance bond guarantees the faithful performance
of the contract by the contractor in accordance with the
terms and conditions laid on the contract. The project
owner is the obligee of a performance bond.
(extracted from AIG website, 2013)

Adverse Physical Conditions

» Ref: Clause 5.2
» Possibly entitled to additional cost and/or EOT if the
Contractor shall encounter adverse physical
conditions (other than weather conditions or effects
due to weather conditions on the Site) in the course of
carrying out sub-surface works, which adverse
physical conditions could not have been reasonably
foreseen by an experienced contractor .

» Unless otherwise provided for in contract and/or

expressed qualifications / exclusions or assumptions
by the Contractor in his tendered offer; in an absolute
contract the Contractor would generally, in law, be
held responsible (ie be deemed to have accepted the
risk) for adverse physical site conditions, irrespective
of whether anticipated or not, ie deemed included in
the promise to provide a building at a given price,
without compensation and EOT for any difficulties
encountered that could be reasonably anticipated (ie
not 'highly unusual').

» In the SIA forms of contract there is no provision for

compensation or EOT for adverse physical site
conditions other than Cl. 1(1)(b)(iii) allowing the
Architect to issue a Direction to vary the works to
assist the Contractor in overcoming difficulties &/or
excessive costs, hence the Contractor is deemed to
have accepted the risk.

» In the PSSCOC the Contractor is relieved of allocation

of contractual risk by being entitled to compensation
for sub-soil adverse physical conditions which is not
foreseeable by an experienced contractor.
» This should result in initial lower tender prices (so
overall reflects a prudent procurement policy of the
Government).

» SITE INFORMATION
• Generally, the Contractor may rely upon site info provided
by the Principal,
• Site Info could be construed as 'misrepresentation' if
found to have errors or inaccuracies –
• Hence the Principal may wish to make a disclaimer on
any liability through disclaiming any warranty on the
accuracy and correctness of the info (making the
tendering contractor take the risk on the accuracy of the
info, else conduct his own surveys and investigations).
• The Principal may also make a term of tendering that the
tenderer shall bear all costs in preparing the tender
submission (ie including the cost of all surveys and
investigations, etc, although the Principal should also
make access to the site available).

Programme
» Ref: Clause 9
» To be submitted within 30d of LOA
» Shall be in the form and in compliance with the
requirements specified in the Contract or otherwise
required in writing by the SO.
[cf “order” and “sequence” req’d in SIA form]
» SO may instruct Contractor to supply additional
particulars or to submit a revised or modified
programme (or both) in order to show and to ensure
completion of the Works within the Time for
Completion.
» Failure to (re)submit Programme: In lieu of termination
of Contract; 10% of interim payments may be retained.

Notice for EOT

» Ref: Clause 14
» Notice: Both the submission of notice and further
information within the 60 day period shall be
conditions precedent to any entitlement to EOT;
» If the Contractor is of the opinion that the progress or
completion of the Works is or will be or has been
delayed by any of the events stated in Clause 14.2, he
shall forthwith notify the Superintending Officer in
writing of such event and shall in any case do so
within 60 days of the occurrence of such event.

» Grounds for EOT and requirement for due diligence

and the taking of all reasonable steps by the
Contractor to avoid or reduce such delay - similar to
SIA form.
» EOT during delay period shall be added to the Time for
Completion of the Works
[ie not a ‘termination of delay’ as in SIA form].

Liquidated Damages
» Ref: Clause 16
» There is no ‘Delay Certificate’
(presumedly as there is no ‘independent certifier).
» If the Works shall not have been substantially
completed within the Time for Completion or any
extended time made pursuant to Clause 14, the
Contractor shall pay or allow to the Employer
liquidated damages calculated at the rate or rates
stated in the Appendix for the period during which the
Works shall so remain incomplete and the Employer
may recover the amount of such liquidated damages
from the Contractor.

Certificate of Substantial Completion

» Ref: Clause 17
» Contractor to give ‘notice’
» SO gives Instruction of remaining works affecting
substantial completion, or issues Certificate of
Substantial Completion
» No Schedule of Minor Works but SO may issue
Instructions

Defects Liability Period

=maintenance period under SIA
» Ref: Clause 18
» shall execute all such works of amendment,
reconstruction and remedying defects, shrinkages or
such other faults of whatever nature as the
Superintending Officer may at any time during the
Defects Liability Period or within 14 days after its
expiration instruct the Contractor to execute.
» before the expiration of the Defects Liability Period,
Contractor shall complete any work outstanding as
may be instructed by the Superintending Officer;

Submission of Quotations
No such in SIA
» Ref: Clause 19.3
» The Superintending Officer may, before issuing an
instruction for any variation, require the Contractor to
submit a quotation for any proposed variation and the
Contractor shall be obliged to submit such quotation
in writing at his own cost.

Loss & Expense

Not a concept in SIA – other rights to compensation (for select few
situations) vs. Loss & expense q prevalent in PSSCOC
» Ref: Clause 22
» The Contractor shall be entitled to recover as Loss
and Expense (L&E) sustained or incurred by him and
for which he would not be reimbursed by any other
provision of the Contract, all loss, expense, costs or
damages of whatsoever nature and howsoever arising
as a result of the regular progress and/or completion
of the Works or any phase or part of the Works having
been disrupted, prolonged or otherwise materially
affected by thr stipulated ‘reasons.’
» To be compared with Contractor’s rights to
‘compensation’ under SIA form

Progress Payments & Final Accounts

PSSCOC / sia bc 2016 / sia 9thedition ->
work out flow chart what each is asking for
Ref: Clause 32
» Payment Claim at monthly intervals (ie fixed ‘periodic’
mode)
» SO to issue Payment Certificate
• Deemed to be the Payment Response
(ie it is not issued by an independent certifier: the S.O. is
Employer’s agent, thus is represents the Employer’s position, not
an independent assessment).
» Contractor to submit ‘Final Payment Claim’ within 90
days of the Date of Substantial Completion

» Within 21 days of receiving the Final Payment Claim

the SO shall provide the Contractor with an interim
assessment of the draft final account ("Interim Final
Account") and issue the Payment Certificate based on
this Interim Final Account.
» The SO shall not later than 30 days after the end of
the Defects Liability Period provide the Contractor
with a draft of the "Final Account".
» Within 30 days of the receipt by the Contractor of the
Final Account, the Contractor shall notify the
Superintending Officer in writing as to whether or not
the amounts set out in the Final Account are accepted
by the Contractor.

» Within 30 days of the Superintending Officer's receipt

of the Contractor's grounds of dispute, the
Superintending Officer may amend the disputed
amount (or other amounts not in dispute) and issue to
the Contractor a notice of amendment to the Final
Account or, if he decides not to issue a notice of
amendment to the Final Account, he shall inform the
Contractor accordingly.
» The Superintending Officer shall issue a Final Account
Certificate within 30 days of the acceptance or
deemed acceptance by the Contractor of Final
Account or of the amendment to the Final Account as
the case may be;

Fluctuations
SIA have, but no standard / mandatory (is optional)
» Ref: Clause 33
» Standard clause, not ‘optional’
» The Contract Sum shall be adjusted upwards or
downwards to take account of any rise or fall
respectively during the currency of the Contract in the
price of each of the materials specified in the
Appendix.

Settlement of Disputes
No such thing in SIA / tho MWC has sth similar in nature.
» Ref: Clause 35
» If a dispute or difference of whatsoever kind shall
arise between the Employer or the Superintending
Officer or the Superintending Officer's Representative
and the Contractor in connection with or arising out of
the Contract or the execution of the Works, ... it shall
in the first place be referred by either party in writing
to the Superintending Officer for his decision.

More Recently:
As part of the government's effort to obtain greater
value for money in government building and
construction procurement, the PSSCOC has
incorporated a new provision (Clause 19.4) to provide
incentives for contractors to offer innovative
proposals which could result in cost savings:
Alternative Proposals by Contractor -
• The Contractor may submit in writing to the
Employer, at his own cost, a detailed proposal for
variations to the Works, which is likely to offer
significant benefits (including long-term or lifecycle
cost benefits) to the Employer.

Cost sharing, time sharing incentive. (not yet in SIA)

Powers of the Architect:

Note the Architects Rules 1991 -The Schedule
(Code of Professional Conduct and Ethics)
(Act 22 of 1991, Section 38, The Schedule)
- Part I, Rule 3 - Conditions of a contract
(1) An architect shall at all times apply the conditions of
a contract with entire fairness between his client and
any contractor concerned, and in any questions arising
between his client and the contractor in which the
architect is acting between the parties by reason of his
professional expertise, he shall act in an impartial
manner.

... under PSSCOC (but not SIA):

2.3 (b) if the Contractor disputes any act of the Superintending Officer's
Representative, he shall refer the matter to the Superintending Officer who
shall confirm, reverse or vary (as the case may be) the act or decision of the
Representative.
35.1(1) If a dispute or difference of whatsoever kind shall arise between the
Employer or the Superintending Officer or the Superintending Officer's
Representative and the Contractor in connection with or arising out of the
Contract or the execution of the Works, ... including any dispute or difference
as to any opinion, instruction, determination, decision, certificate or
valuation of the Superintending Officer or the Superintending Officer's
Representative, it shall in the first place be referred by either party in writing
to the Superintending Officer for his decision.
Immunity??
_ No! ... this would not establish the Contract Administrator with quasiarbitral
/ quasi-judicial ‘immunity’, and the liabilities for breach of
professional duties of skill and care would still apply – eg see: Sutcliffe v.
Thackrah.

... under PSSCOC (but not SIA):

35.2 If either the Employer or Contractor is dissatisfied with the decision of
the Superintending Officer made pursuant to Clause 35.1 ... then the
Employer or the Contractor may ... give notice to the other party with a copy
for information to the Superintending Officer of his intention to refer the
decision [of the S.O.] or the dispute or difference that had not been decided
to an arbitrator.
PART 5: SIA MWC COMPARISONS
SIA Minor Works Contract (MWC)
... intended for minor works – eg houses, A&A – of
low to medium complexity
... depends primarily on the Architect running the
project (eg possibly no QS, although it is
recommended as prudent to do so).
... ‘guidance notes’ call for
- “spirit ... of collaboration”; “good faith” and
“mutual respect”
- “Architect ... [to] mediate between the parties in
the event of any dispute”

... only ‘lump sum’ form (... w/o measurement /BQ)

... w/o ‘fluctuation’ (considering short contract
periods)
... SIA MWC is not just a condensed/abridged
version of the SIA A&CBC ... although there are
parallels, it contains unique features to
address the needs and challenges of smaller
projects with less-sophisticated Contractors.

HAS provisions for ...

... variations
... “written instructions”
... e.o.t. and liquidated damages
... nomination of sub-contractors/suppliers
... provisional & PC sums
... interim payments (by periodic valuation OR
fixed instalments)

... Completion Certificate

... Maintenance Certificate
... Interim Certificate
... Final Certificate
... Termination Certificate
... Cost of Termination Certificate

... retention monies

... AND performance bond (on top of retention monies. expressed
option)
... indemnities and insurance

... “Certificate of Liquidated Damages

Entitlement” (rather than a ‘Delay Certificate’)
• Architect calculates LD entitlement to avoid disputes arising from
Employees over-deducting LD.
 ... Condition Precedent to Claim for Variation
(ie 14d to inform Architect if Contractor opines
that a ‘written instruction’ involves a
‘variation’)

Significant difference to SIA-A&CBC forms ...

... Contractor may serve a Payment Claim after
the ‘triggering events’ (terms of contract)
... ie upon failure of Employer to make proper
payment in accordance with the contract
provisions
... to secure rights to SOPA Adjudication.
... no need to submit a ‘payment claim’ to
activate the payment process under contract.

The payment claim is an activation of a dispute settlement scheme under SOP Act adjudication.

Unlike 9th edition of SIA – no need for a payment claim in MWC to trigger a payment scheme. IT
simply operates under contractual terms, at a particular time, then architect must issue a interim
certificate for payment. Does not have to be a payment claim to trigger that process.
PART 6: SITE MEETING AGENDAS
Things recommended to deal w at site meetings, either as
discussion or things to monitor, because they relate directly to
Contract Administration.

General discussion on
- Site Meeting topics
• Site Meetings are used by the Contract Administrator to, inter
alia :
• (a) monitor compliance with the Contract:
• (i) diligent & expeditious progress (eg on schedule);
• (ii) quality of materials & workmanship -> direction to redo ..
• (iii) proper work methods and site organization
• (iv) proper planning and coordination of the works
• (v) anticipate and avoid delays and problems
• (b) establish records (ie evidence) to support taking of
corrective ‘action’ ... eg 1(7) 9th edn, termination, deductions, etc (Cl. 1(6) in BC2016)
• (c) manage the execution of duties (as contract
administrator) as required under the terms of contract.
Note: Termination of the Contractor’s Employment is either on the grounds for termination
set out in the Conditions, or Common Law rights of fundamental breach of contract. Site
Meetings (and other correspondence) should form documentary evidence of Contractor’s
fault.

In the articles of SIA conditions of contract, architect whose supervision will be carried out.. (as
architect n QP to do supervision n inspection) use site meeting as basis to undertake those
supervisory duties.

- Site Meeting topics ... example agenda

1. MINUTES OF MEETING AND INTRODUCTORY MATTERS
Confirmation of Minutes of Previous Meeting
2. WORK PROGRESS
Reporting on Progress Status of the Works (per Phase)
o Originally-approved Construction Programme
o Latest-revised Programme with task status marked-up for tracking
o Progress Status Report (comprising
(i) breakdown of Works with completion status in %, and
(ii) summary progress statement)
o Cashflow Analysis Chart
o Progress Photographs (with labels / descriptions and key plan)

o Summary of Machinery & Equipment Report

o Summary of Manpower Report
o Summary of Request For Information &/or Clarification (RFIC) status
o Status Summary Chart -cum- Schedule of Technical Submissions
& Materials Procurement status
o 3-week forecast Schedule of Works-in-progress
o List of newly arising (since last meeting) “Claims” - including of
(i) Design Changes and any other Variations, and
(ii) Utilisation of Provisional Sums.
o Risk Assessment Index
Note: The Progress Report is to be verified and signed (for record purposes only)
by the site supervision staff.

Due Diligence & Expedition

(i) Works progress
(i) Adequacy of Workers / Manpower Resources:
(ii) Adequacy of Managers and Supervisors
(iii) Adequacy of Plant & Equipment Resources:
(iv) Conduciveness of Site Management
(organisation & utilisation; tidiness & housekeeping; safety & health)
for efficient work practices.
(v) Adequacy of planning & coordination of works:
(vi) Adequacy and timeliness of RFICs and technical submissions.
(vii) Adequacy of planning and procurement of materials and components.
(viii) Adequacy of updated/revised programmes and detailed schedules.
(ix) Adequacy of availability and sourcing of materials for the project.
(x) Efficiency of work methodologies and practices.
(xi) Workmanship and materials are of good quality
(and do not risk rejection requiring replacement or rectification).
(xii) Sub-contractors’ progress payments are timeous
and promoting good cashflow.
(xiii) Addressing other fundamental deficiencies:
Catch-up Measures
Status of Procurement of Materials with scheduled lead-time
Status of Consultants’ responses to RFICs and Submissions

3. PROGRAMME & EXTENSION OF TIME (EOT) MATTERS

Grants of Extension of Time (EOT) [grant status; 'claims']
Phasing / Staging of the Works
Construction Programme (approval of, & revisions)
Detailed / other programmes & schedules (eg procurement of materials; TOP, etc)
Warnings on [potential] Delays [for opportunity for Employer to avoid]
Orders for Acceleration
4. PROVISIONAL & PRIME COST (PC) SUMS
Nominated Sub-Contracts
Other PC & Provisional Sums

5. OPTIONS & ALTERNATIVES

6. PROVISIONAL QUANTITIES
7. COST VARIATION MATTERS
Current Variation Matters
Procedures for Quotations [Valuation, ie SOR, *(Star) Rates]
8. OTHER CONTRACTUAL MATTERS
Letter of Acceptance (LOA) [vs LOI, and binding contract]
[incl date of commencement of Contract Period ... BCA Permit req'd?]
Contract Documents [& signing of formal contract]
Mode of S.O.’s Orders (Instructions & Directions)

Progress Payment Claims

Formats for procedural documentation / correspondence [eg:
(a) Request for Further Information &/or Clarification (RFIC)
(b) Record of Verbal Instruction &/or Approval (RVIA)
(c) Cover note for Technical Submission (TECH-SUB)
(including record for mock-ups, samples and first-fix proto-samples)
(d) Inspection &/or Standing Supervision (request & record) form
(e) Test Report (cum record)
(f) Progress Report documents
Insurances
Security Deposit / Performance Bond
Approval of Sub-Contractors
Snagging Lists [maintain a list of 'rejected' / non-compliant work]

9. PROJECT MANAGEMENT & LANDLORD MATTERS

[addressing specific requirements of the Employer &/or property owner]
Communications Protocols
Landlord’s Renovation / Development Guidelines
Arrangements with Landlord’s for Utilities Supply
Blackout Times [or other noise or access restrictions]
Planning for Handover [not contractual! - coord with Completion and TOP]
10. SAFETY & HEALTH
[remembering that Employer has responsibilities under WSHA too]
Safety & Health Plan
Safety Inductions/Briefing

Risk Assessment (RA)

Safety & Health Coordinator’s Report [by Contractor]
(a) Reported breaches of safety and health requirements
(b) Reported incidents/accidents or near-misses
(c) Reported visits from Authorities
(d) Confirmation of regular (daily) Toolbox Meetings
(e) Confirmation of regular Safety Committee Meetings
(f) Previous matters that required follow-up
Site Inspection - Safety & Health Action
Site Safety Audits

11. AVOIDANCE OF STOP-WORK ORDERS

Site Safety [refer above]
Environmental Health [incl mosquito controls]
ERSS (Earth-Retaining & Stabilising Structures)
12. OTHER SITE & CONSTRUCTION MANAGEMENT MATTERS
Commencing Preparation & Work Activities on Site
Other Permissions / Approvals for Site
BCA Permit to Carry Out Structural Works
Factory Permit
Other Permits to work [eg LTA for railway]
Particular Restrictions on Possession of Site &/or scheduling of the Works
[eg 'live' environments; existing other tenants; etc]
Existing Dimensions & Levels
Engineering Survey: Pre-computation / Setting-out Plan
Investigation of Existing Conditions
Obstructions at New Driveway Entrance
Proposal on existing materials / elements proposed to be re-used
Verification of permanent/proposed Utilities Supply
Underground Services Detection Survey
Personnel Organisation Chart
Site Arrangement / Utilisation Plan
Site Security Plan
Hoarding Design
Temporary Utilities & Facilities (incl. power & water)
Site Office

Approved Building & Structural Plans and Permit

Site Fire Safety & Emergency Plan
Lifting and Scaffolding
Site Environmental Management System
Noise Control
Instrumentation
Earth Control Measures (ECM)
Earth Retaining Structures & Systems (ERSS)
13. SITE SUPERVISION MATTERS
Appointment of RTO / Clerk-of-Works
Permit to Carry Out Structural Works & approved ST Plans
Arrangements for inspections and standing supervision of work

QP & S.O. inspections of work

Arrangements for Mockups
Register / Log of Site Attendance
PPE and equipment for Site Visits
Site Supervision Staff - Site Facilities & Equipment
Site Supervisor’s Report
14. DESIGN (OF PERMANENT WORKS) MATTERS
Design for Safety (DfS) of Permanent & Temporary Works
Notification of changes in design that are being considered
Structural Information [eg steel mill cert]
Demolition proposal

15. STATUTORY APPROVALS LEADING TO FSC/CSC

Registration of Project [& persons] in Corenet
Environmental Sustainability Regulations [& GM - keep records]
Buildable / Constructable Score [-keep records]
Fire Safety Documentation [-keep records for TFP/FSC application]
BCA & FSSD consultation on “Partial” TOP/TFP
["TOP Checklist" - incl Utilities connections & turn-ons]
16. OPERATIONS-COMMENCEMENT, CERTIFICATIONS & OPERATING LICENSES
[incl Telecoms, Gas, Postal Service, Lift License 7 other operating licenses, etc]
17. AWARDS & CERTIFICATIONS
[eg Green Mark, CONQUAS, U.D., HACCP, etc]
18. UPCOMING MEETINGS
PART 7: THE CONTRACT ADMINISTRATOR
What is a Contract Administrator ?
Contract administrators are engaged by employers.
Some of what they have to do entails them acting as the
agent of the employer. However, in carrying out other
tasks, they have to act impartially and fairly between
employer and contractor. These dual roles have given
rise to difficult questions.
... What exactly is required from the administrator when acting
fairly and impartially?
... Can the administrator be liable to either contractor or employer if
he makes mistakes when acting impartially?
... Can the employer, who pays the administrator, be liable to the
contractor for his mistakes?
[From: http://www.keatingchambers.co.uk/resources/publications/2006/contract_administrators.aspx ]

• See Article 3: The Architect acts “on behalf of

the Employer”
• eg Employer may not have technical knowledge / training
or experience, so relies upon the Architect to oversee the
project and interact with the Contractor.
• eg Employer may not be knowledgeable of standard
forms of building contract, or common contractual
provisions and procedures.
• (ie to avoid problems!)

The Architect (as Contract Administrator);

...by whom or under whose administrative control
on behalf of the Employer the Works have been
designed and the Contract Documents
prepared … [Article 3].
ie technical ‘know-how’ and familiarity with the design.

… and under whose supervision or administrative

control on behalf of the Employer the Works
will be carried out. [Art. 3]
eg monitor the activities of the Contractor and his
obligations under the Contract.

And Article 4 provides for the appointment of a

Quantity Surveyor ...
... “to assist the architect in all matters of valuation or
measurement” ...
... and the QS “shall be a professionally qualified quantity
surveyor” ...

And Article 5 provides for the appointment of a

Consultants ...
... to assist the architect in all matters of design,
supervision, completion & compliance ...

there are these other people helping out the Architect w his Contract administration.
So, what does a Contract Administrator do?
- ‘roles’ and ‘duties’ as set-out in the Conditions
of Contract, including to enforce or facilitate
procedure required under the Conditions.
- protect the Employer’s rights (although the
Architect is called upon to act impartially in
some instances), eg to promote the ‘product’
being of required quality, on time, and correct.
- enforce the Contractor’s obligations under the
Contract.

Typical duties:
• Supervision:
» Inspect the Works ;
• to verify that the Works appear to be in
accordance with the requirements of the Contract.
• to verify that the method of working (including site
management and organisation, etc) to be
conducive to a good ‘product.’
• Administrative Control:
» Certification, Orders and Notices
» Supply of Information (to contractor that is needed for contractor to carry out the works
properly)

Orders:
... empowered to give orders ( in the interests of
the project ):
• Instructions
• Directions

Certify:
• Cost of other Contractor’s Work
• Revised Commencement Date
• Delay & Termination of Delay
• Completion
• Partial Re-Entry or Occupation
• Schedule of Defects
• Maintenance
• Interim & Final Payment
• Termination, Cost of Termination and Termination Delay

Notify / Inform:
• Decision on In-Principle Entitlement to EOT
• Decision on EOT

For the Contractor:

• Architect to certify payment [cashflow]
• Architect to supply information [information
flow]
The key requirements to progress of the Works.
• Architect to act impartially in assessing
extensions of time (EOT) to complete the
building works
The Contract Administrator also importantly
plays a role in:
• Compensation
• Sanction urgent or unauthorised variations
• Completion certification

Architect does all this things in the terms of the contract.

... further duties/roles expressed* under

PSSCOC:
To avoid or deal with arising disputes ...
35.1(1) If a dispute or difference of whatsoever kind shall arise between the
Employer or the Superintending Officer or the Superintending Officer's
Representative and the Contractor in connection with or arising out of the
Contract or the execution of the Works, ... it shall in the first place be
referred by either party in writing to the Superintending Officer for his
decision.
Immunity??
_ No! ... this would not establish the Contract Administrator with quasiarbitral
/ quasi-judicial ‘immunity’, and the liabilities for breach of
professional duties of skill and care would still apply – eg see: Sutcliffe v.
Thackrah.
*SIA Form does not ‘express’ any requirement (although it is generally
encouraged), but SIA MWC does!

Powers of the Architect:

Note the Architects Rules 1991 -The Schedule
(Code of Professional Conduct and Ethics)
(Act 22 of 1991, Section 38, The Schedule)
- Part I, Rule 3 - Conditions of a contract
(1) An architect shall at all times apply the conditions of
a contract with entire fairness between his client and
any contractor concerned, and in any questions arising
between his client and the contractor in which the
architect is acting between the parties by reason of his
professional expertise, he shall act in an impartial
manner.

“The employer and the contractor make their contract on

the understanding that in all matters where the architect
has to apply his professional skill he will act in a fair and
unbiased manner in applying the terms of the contract”.
(Keating on Construction Contracts, 2006, quoting from Sutcliffe v Thackrah
[1974] AC 727)
The architect, or administrator, has to exercise his
professional skill in a fair and unbiased manner when, for
example, issuing payment certificates or deciding upon and
granting extensions of time.
(See:
http://www.keatingchambers.co.uk/resources/publications/2006/contract_administra
tors.aspx)

Important reminder:
• Architect is only ‘administrator’ of the contract
– the Employer and Contractor are the
‘parties’ to the Contract.
• Architect only has powers / authority (to the
extent and type) as given under the Contract!
Warning: Acting in excess of powers may render the Contractor
entitled to compensation, or invalidate certificates, etc.

--if the contract does not bestow the power / authority upon u, you do not have any
such power/ authority. Don’t work beyond ur powers. If u work in excess of your
powers -> contractor entitled to compensation / invalidate some of the things you
have done. Always check CONTRACT.

• The Architect is not empowered beyond that

given in the Contract;
» cannot terminate the Contract
» cannot change the contract or waive it’s substantive
requirements** unless agreed by the parties.
» has no powers related to action under general law
extra to the Contract
» No power to impose liquidated damages
[**Note: Some Courts have established that an Architect / Contract
Administrator (as ‘agent’ of the Employer) had no power to vary or waive
the terms of a building contract in relation to matters of substance,
however, this did not apply in relation to matters of procedure.
And be careful, as conduct comprising non-imposition of a contractual
procedure may become construed as a ‘waiver by conduct.’]

• The Contractor is obliged to comply with

Contract
(ie the Architect cannot relieve the Contractor
of a substantive contractual obligation),
• eg ‘review of proposed shop drawings’ or 'selection of
materials from samples provided' does not change the
obligation for the Contractor to comply with the
contractual specifications (unless selection constituted
an order for variation, and is recorded in writing).

The architect cannot waive or lift a requirement of the contract.

The only person who can waive/lift a requirement of a contract is the other party.

Recap on Architect’s Power

(granted in the Articles & Conditions and other terms of Contract)
• Architect has no authority to ‘waive’ or ‘change’ contract
requirements.*
• An Architect should be aware of differences between
‘contractual’ and ‘practice’ *- some common practices do
not strictly follow the contract !
eg allowing waiver on timely ‘notice’ for EOT.
eg only recognising ‘format’ Instructions as valid for variations.
• Only parties can bring in ‘supplementary agreements’ (eg
additional terms to, or deviations from, the provisions of
the Contract).*

Why should Architects be concerned with the

Building Contract?
#1
• How is a Contractor’s obligations to build the
development in accordance with the Architect’s
design intent actually established?
• How does the Architect have ‘power’ / ‘authority’ to
protect the Employer’s interests involving the
realisation of a wonderful architectural design?
1. The Contract establishes rights and obligations, which the
parties subject themselves to by agreement.
2. The Architect is often appointed to ‘administer’ the contract and
is bestowed powers and duties .

#2
• As 'contract administrator' with bestowed powers,
the Architect assumes a position of 'leadership'
... setting the tone/culture of the project,
... establishing ethical standards,
... applying professional competence and technical
know-how in the design & supervision of the Works
(c.f. Articles 3, 4 & 5 wrt Architect, QS &
Consultants ... 'design' and 'supervision' roles).
• Which also gives the Architect status in the wider
construction industry.

#3
• Professional competency in contract administration
is a significant part of 'architectural services'
... business opportunity.
... (c.f. SIA Scope Matrix: Design, QP, CA, PA/DM)