CIVIL ENGINEERING DEPARTMENT

DCC20073 : CONTRACT &

ESTIMATING

TOPIC 1
CONSTRUCTION
INDUSTRY IN GENERAL
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 COURSE LEARNING OUTCOMES

Upon completion of this topic , the student should

be able to :

CLO1 : Explain the fundamental concepts of

construction industry in general, tender procedure
and contract procedure in Malaysia. (C3, PLO1)

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 STUDENT OUTCOMES

1.0 THE CONSTRUCTION INDUSTRY IN GENERAL

(CLO1C, PLO1)
(3HOURS)

1.1 EXPLAIN THE BASIC CONCEPT OF CONSTRUCTION INDUSTRY

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 INTRODUCTION
• Construction activity is widely and does not only
apply to building processes and contracts only.
• It is beyond the scope of the design and
development.
• Construction and development involve many parties,
and the different phases and stages.

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 CONSTRUCTION INDUSTRY
DEFINATION
• Is a branch of the economy and national
development.

• Involves the use of techniques and expertise to

specific areas within the construction industry as a
review of construction organizations, construction
process, supply of labor and materials

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TYPES OF CONSTRUCTION
INDUSTRY

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 Residential

Institutional Commercial

Category
of
Projects

Infrastructure Recreational

Industrial

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 TYPES OF CONSTRUCTION
In general, there are three types of construction

Building construction

Heavy engineering construction

Civil engineering construction

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a. Civil Engineering
Construction

• Involving civil engineering works other than

buildings.

• Examples: roads, bridges, highways, sewage.

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highway Bridges

Drainage

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***

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b. Civil Engineering Construction (
Heavy )

• Involving large-scale projects and advanced

technology.
• Examples: oil rigs ( Offshore construction ),
dams, airports, light rail system ( LRT ), MRT /
railway track , Tunnel

Tasik kenyir
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Ofshore Dam

Airport
Railway train

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 c. Building construction

• Involves the construction of the building

including residential, commercial properties,
special properties.

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 c. Building construction (cont’)
• Example of building construction works:
– Residential / Housings
– Office complex
– Hotel and resort
– Hospitals
– Educational institution
– Commercial building / shopping complex
– Mosque and etc

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RESIDENTIAL

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THE RELATIONSHIP BETWEEN CONSTRUCTION INDUSTRY
AND NATIONAL ECONOMIC GROWTH

• The Malaysian construction industry has contributed

significantly to the Malaysian economy as an enabler of
growth to other industries. The industry is an essential growth
enabler because of its extensive linkages with the rest of the
economy, for example;
• Manufacturing industry (such as basic metal products, tooling
heavy equipment and machinery)
• Financial services industry
• Building and construction materials industry; and etc

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THE RELATIONSHIP BETWEEN CONSTRUCTION INDUSTRY
AND NATIONAL ECONOMIC GROWTH
The positive growth in economy and construction industry also
can reflect to:

• Adopt new approaches and technologies in construction

industry
• Increase job opportunities – from professionals such as
architects, engineers and surveyors to main contractors,
subcontractors, suppliers and ultimately manual labourers
who are employed by these contractors.
• Increase investment and marketing opportunities
• Develop tourism activities; and etc

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 ACTIVITIES INVOLVE IN THE
CONSTRUCTION OF A PROJECT

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ACTIVITY INVOLVES IN THE CONST PROJECT
PLANNING CONSTRUCTION
PROCESS & COMPLETION
PROCESS
DESIGN
PROCESS UTILIZATION
PROCESS

CONSTRUCTION

HANDING OVER

UTILIZATION &
MAINTENANCE
FEASIBILITY

CONTRACT
TENDER
DESIGN
STUDY

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 1.

• The process and provides critical guidance for design,

construction and operation.
• The architect and consultant will study the client’s
needs
• The design team should cooperate in giving
suggestions and advice to the client
• Very important stages in determining the feasibility
and profitability of a project

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 1.

• The factors to be considered for construction project

include site and area evaluation, financial analysis and
report.
• The studies involved are:
•  Social Study:
• to determine the profitability / return of investment (profit or lost) of the
project
• to find out the market conditions / potential demand
• to analyze competition from the existing types and prices and of other
development
• to determine the forecast estimation (budget) required

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 1.

 Soil Investigation Study: is to determine:

• the type of soil
• the load bearing of the soil
• the site topography.
• All the data will affect to the design of
foundation and cost of the project.

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 1.

 Preparing the reports based on the existing reports which

similar to the proposed project and the current studies or
data
• Data and information that acquired are as follows:
– Topographic map
– Geological map
– Mining record
– Service tunnel
– Weather report
– Tides level
– Previous construction site plans
– Previous boreholes data

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 2.

• Main purpose of this stage is to complete the

client’s brief and decide on proposal that
include planning arrangement, appearance,
construction method, specification and cost.
• The QS is required to prepare a Detailed Cost
Plan that shows how consultants distribute
money to individual elements of building.

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 2.

• Design is done according to the feasibility of the

project type and the result will be translated into
drawing and specifications.
• A few factors must be taken into account to ensure
the quality of design produce meets the client’s
requirements.
• 3 types of design :
Structure, architect and civil engineering.

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 2.

• Design stage is divide to the following sub stage:

•  Outline proposals, scheme design, detail design and
production information
•  Outline proposals also known as sketch plan
•  Detail design and production information also known as
working drawing

• Also involved the following activities:

•  Preparing approximate estimate cost
•  Specification and schedule
•  Bill of quantities
•  Final estimate cost
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 3.

• This is he stage where the qualified tenderer is selected.

• Carry out after all the drawings are prepared.
• The tenderer are invited to offer the tender whether through
processes of open, selected or negotiated tender.
• Tender refers to the official document to designate work
contract to the selected contractor.
• The tender advertisement has been prepare to contractor
who interested about the important detail in this tender.

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4.

Contract bonding
CLIEN CONTRACTOR

Contract bonding
FINANCIER

CONSULTANT SUB
CONTRACTOR

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 4.

• A Contract is a binding agreement between

contractor and an owner.
• The tenderer selected will sign the offer and
acceptance agreement with the client and
following that, he is known as the main
contractor of the project.
• They will sign the document when the
price, contract terms and all the conditions
are agreed by both parties.
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 5.

• Construction is the process whereby designer’s plan

and spesifications are converted into structure and
facilities.
• It is the contractor’s duty to implement the work on
site until project completion.
• The consultant’s duties are to monitor the
construction work, evaluate the work and make
payement to the contractor.
• It involves the organization and coordination of all
the resources for the project to complete the project
on schedule.
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 6.

• Handing over is a stage where the contractor

returns the completed site work and
responsibilities back to the client , developer
or architect.
• Once the project is completed, it needs to be
handed over to the client for occupation.
• After completion the whole of works, the
contractor shall hand over the project to the
client on or before the “Date for Completion”.
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 6.

• The date of completion shall be the date of

the commencement of the Defect Liability
Period (DLP)

• The contractor is responsible for any repair

works through the defect period of the
project.

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 6.

• Within the DLP, any defect and damage due to

materials or goods or workmanship not in
accordance of the contract, the contractor
shall be make good all the defect by his own
cost.
• Prior to project hand-over to the client, it is
necessary that the project is inspected and
the certificate of fitness for occupation is
obtained from the relevant authority.
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7.

• Once the project can be utilized by the

occupants developer / client from time to
time, it will be monitoring regards the
maintenance work.

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PARTIES INVOLVES IN CONSTRUCTION
INDUSTRY

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 PARTIES INVOLVES IN CONSTRUCTION INDUSTRIES

GOVERNMENT PRIVATE SECTOR

SECTOR
CLIENT
APPROVAL DESIGNER
Faderal FINANCER Project Manager
 State Bank Architect
 Local  others financer  Engineer
Authorities
 QS
CONSTRUCTION
 Contractor  Land Surveyer

 Domestic Sub-  Others

ARCHITECT contractor / Nominated
 Nominated Supplier
 Workers
DESIGNER
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 DESIGN TEAM

• Specifically involved from the planning,

designing projects, preparing tender
documents and reports, providing advice on
the selection of tenders, supervision during
construction and project management on
behalf of the CLIENT

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 ROLE OF
DESIGN TEAM

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 DESIGN TEAM

ARCHITECT

MECHINICAL &
ELECTRICAL STRUCTURAL
ENGINEER ENGINEER

CLIENT

QUANTITY CIVIL
SURVEYOR ENGINEER

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 CLIENT / DEVELOPER
• Is the owner who initiates to develop the
project.
• Client can be from the private sector, semi
government bodies or government itself.
It’s also can be an individual initiative , a
group of investors, a large corporation or
an elected governing body.
• To find and appoint a suitable consultant
and contractor
• Briefs architect of his basic requirement.
• Desides on architect’s preliminary sketch
drawings and specification of project. 43
 ARCHITECT
• Person who leads the design team
• Conduct project brief according to the
client’s requests.
• Responsible in preparation of preliminary
stage design base on the owner desire.
• Coordinate working drawing for civil
engineering and structural works, M&E
drawings, so that it follows the client’s
requirement.
• As a professional advisor to the client and
contractor. 44
 ENGINEER CIVIL / MECHANICAL &
ELECTRICAL ENGINEER
• CIVIL ENGINEER
• Carry out analysis and structural design
for the proposed project.
• Prepare structural and construction
drawing
• Communicate with the architects about
the project

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 ENGINEER CIVIL / MECHANICAL
Mechanical & Electrical Engineer&
ELECTRICAL ENGINEER

• Prepare a design and layout related to the

building mechanical and electrical system.
• In charge and supervise of M & E works
between subcontractor and main contractor.

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 QUANTITY SURVEYOR
• Responsible as a cost consultant in the design
team.
• As the Financial Controller of the project,
responsible to maintain cost control during the
full duration of the project.
• Responsible in Tender Document preparation .
• Prepare project budget / cost estimation.
• Prepare specifications and bills of Quantity to
itemise all the materials needed and the involved
in a project.
• To call and award tenders to Contractor.

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 LAND SURVEYOR

• Obtain complete information about project

location from Land Office.
• To map out the actual site lot boundary for
the purpose of architectural layout plan.
• Surveys and prepare the required survey plan,
key plan, site plan, ownership and others to
obtain the approval from Land Office.

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 CONSTRUCTION TEAM

ARCHITECT
MECHINICAL
&
ELECTRICAL STRUCTURAL
ENGINEERI ENGINEER

CONTACTOR

CIVIL
QUANTITY
ENGINEER
SURVEYOR

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CONSTRUCTION / BUILDERS TEAM

• Is the party responsible for translating client

requirements into reality according to the
conditions contained in the contract.

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ROLES OF CONSTRUCTION TEAM

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 CONTRACTOR
• Translating client requirements into reality by
following the contract documents
• The contractor responsible for construct and
completed of work and repair any defects from
time to time accordance with plans,
specifications, and all the terms stated in the
contract.
• Providing insurance coverage for employees
and their work.
• Follow the requirement of Local Authorities

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 ARCHITECT
• Monitor and supervised the project during
construction period.
• To ensure the achievement physical and
payment progress under his supervision in
accordance with the planning schedule.
• Coordinate the relationship with the client
and consultant which related the contract
and work implementations.

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 ARCHITECT
• Inspect the proposed site
• Consults with local statutory authorities such
as to obtain the approval from the authority
for the drawings, Certificate of Fitness
Occupants and etc…)
• Person who leads the design team

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 ENGINEER CIVIL / M & E
• Ensure the civil and structural work
according to the specifications and
standard of the Uniform Building By- Laws
1984 ( CIVIL )
• Monitor and supervised the project during
construction
• To ensure the achievement progress under his
supervision in accordance with the planning
schedule.
• As advisor in the field of their respective.

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 QUANTITY SURVEYOR
• Monitor and supervised the project during
construction
• To ensure the achievement progress under his
supervision in accordance with the planning
schedule.
• Coordinate works with sub contractor
appointed to follow the program execution
• Doing the valuation payment on be half
client and preparing final account.
• Measuring and valuing variation work
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CONTRACTOR
REGISTRATION

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 REGISTRATION

http://www.cidb.gov.my/images/content/
pdf/cims/lampiran%20A.pdf
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SUMMARY OF GRADE, CATEGORY AND
SPECIALISATION

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VALUE OF WORK PROCUREMENT

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VALUE OF WORK PROCUREMENT

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VALUE OF WORK PROCUREMENT

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CONTRACTOR REGISTRATION

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 PROCEDURE TO BE A CONTRACTOR

• New local firms or companies or locally incorporated companies and local

firms or companies who involved in construction activities shall apply for
registration with the follows bodies:

 Acquired Registration Certificate from Companies Commission of Malaysia

(SSM)
– Registration of Businesses or
– Registration of Companies
(For further information refer to: http://www.ssm.com.my

 Acquired Registration Certificate from Construction Industry Development

Board (CIDB)
(For further information refer to : http://www.cidb.gov.my)

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 THE REGISTRATION CONDITIONS AT CONTRACTOR SERVICE
CENTRE ( CIDB)
1.0 APPLICATION FOR NEW REGISTRATION CERTIFICATE
1.1 Application
• Application must be made by the Chief Executive Officer using
the relevant forms.

1.1.1 Conditions for Application

a. Complete the new registration form R1/95.
b. Pay a processing fee of RM50.00.
c. The applicant must be registered with the
company registration authority or other authority
applicable to its business operation.

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d.The applicant must have adequate financial resources and
must maintain its financial standing for the duration of its
registration ( refer appendix)

e. The applicant must have or must employ an adequate number

of qualified technical personnel and retain them throughout the
duration of the registration

f. The CEO or his representative must be experienced in the

construction industry for at least two (2) years.

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 PUSAT KHIDMAT KONTRAKTOR(PKK)

• PPK now under control and supervision

Bahagian Pembangunan Kontraktor Dan
Usahawan (BPKU), Kementerian Kerja Raya
since 15 October 2012
• Give recognition Bumiputera to qualified
contractors

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Construction Industry Development Board was established
under the Construction Industry Development Board Act 1994
(Act 520) to regulate, develop and facilitate the construction
industry towards achieving global competitiveness.

The Board advises the Federal and the State Governments, as

well as other stakeholders on matters affecting or connected
with the construction industry.

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The role/function of CIDB

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• To promote and stimulate the development,
improvement and expansion of the construction
industry;
• To advise and make recommendations to the Federal
Government and the State Government on matters
affecting or connected with the construction
industry;
• To promote, stimulate and undertake research into
any matter relating to the construction industry;
• To promote, stimulate and assist in the export of
service relating to the construction industry;
• To provide consultancy and advisory services with
respect to the construction industry;

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• To promote quality assurance in the construction industry;
• To encourage the standardization and improvement of
construction techniques and materials;
• To initiate and maintain a construction industry information
system;
• To provide promote, review and coordinate training programs
organized by public and private construction training centre
for skilled construction.
• To accredit and register contractors and to cancel, suspend or
reinstate the registration of any registered contractor; and
• To accredit and certify skilled construction workers and
construction site supervisors.

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