BPM109 Contract administration – Jan 2021 attempt

1a) The contract administrator under the SIA form of contract is the architect. Under the PSSCOC
form of contract the contract administrator is the superintending officer (S.O).

The responsibilities of the contract administrator:

 Obtain approvals for the building from statutory boards like URA, BCD and FSB.
 Supervise the works with the help of consultants on behalf of the owner.
 Issue relevant certificates such as the completion certificate and the delay certificate.
 The contract administrator should contribute to the design and the preparation of
specifications for tender.
 Needs to give approvals for any works on site down by the contractor.
 Able to issue variations to the design with the approval of the owner.
1b) Architects Instruction: Architects request for a variation or omission to the works as the
representative of the owner. This may result in a change in the contract sum (either an increase if
there are additional works or a decrease due to omissions to the work) and an extension of time for
the project.

Architects direction: Architects order to the contractor to secure compliance of the contractor.
Typically used when there is an issue with the materials used by the contractor that causes it to not
comply with the contract requirements. Also used when the contractor is doing something that
creates a safety violation such as not providing sufficient temporary works for workers to erect a
structure.

Examples of an architects instruction:

1) Architect requests for the buildings glazing level to be higher than originally specified in the
contract. If the materials have already been ordered, delivered or partially installed, it will
incur additional cost and time to procure the materials and install the glazing. If it has been
installed, the glazing will also need to be taken down and replaced which will require
additional time as well.
2) Architect requests to omit one of the meeting rooms on one of the floors. This will result in a
reduction of the materials required for the floor. Materials such as lighting, switches, walls,
and air conditioning for the space will be removed. This will result in a lower cost for the
project and the contractor should advise the architect on the reduction in cost for the
project due to this change.

Examples of an architects direction.

1) The architect issues an order to the contractor to allow the architect to inspect the material
used for the doors. This is because the architect suspects that the door being installed by the
contractor does not meet the fire rating requirement specified in the contract. If the
architects suspicions are proven, the contractor will need to rectify the door material at their
own expense and allow the architect to inspect again before it is installed. They will not be
granted an extension of time for this. If the architect is wrong, the architect will need to
grant the contractor an extension of time for the time lost due to the architects inspection.
1c) Types of tendering: Open tender. Selective tender and limited tender.

For this project: use open tender.

Reasons:

- The client wants good workmanship and the shortest possible time. An open tender is the
method to achieve the most competitive outcome.
- The client also wants extra features to be included. An open tender will give the most
number of designs for the owner to choose from.

Tendering procedure:

Step 1: Prepare the documents required for the invitation to tender.

Step 2: The owner publishes the invitation to tender in the newspaper or other public forums. The
invitation to tender should come with a list of pre-requisites for tenderers to qualify for the tender.

Step 3: The tenderers who express their interest are brought on a site show round that will also be a
project briefing. The tenderers will pay the tender deposit and the tender document fee as well as
collect all the tender documents. The tenderers will be required to sign an NDA before attending the
briefing.

Step 4: the tenderers will submit their tender proposals before the tender closing date. The
documents should be date and time stamped to avoid any late submissions.

Step 5: the owner and his consultants will open the tender submissions and check that all the
submissions are complete before they begin evaluating the tenders.

Step 6: The owner will inform the successful tenderer of the outcome and begin discussing the
contractual obligations and other details.

Step 7: after the contractor has been confirmed, the owner will inform the other tenderers of the
outcome and provide feedback if it is requested.
2a) Novation only can be used with designated sub-contractor.

A designated sub-contractor is selected from a prescribed list provided by the owner under the
provisional sums part of the contract. The sub-contractor is selected prior to the award of contract
to the main contractor and enters a contract with the main contractor after the award of tender.

2b) Sub contracting is done when the project awarded is too large for the main contractor to
undertake alone. The main contractor then splits the project into different parcels for each sub-
contractor to undertake separately so that the risk is outsourced, and the work is easier to handle.

Sub-contracting is also done when the main contractor does not have the necessary experience to
undertake certain works alone. For example, the main contractor may not have the necessary
personnel to undertake plumbing and sanitary works as it requires a licensed plumber to supervise
the connection to the PUB incoming and public manhole. Design requirements for compliances will
also need to be confirmed by the relevant specialist.

Sub-contracting is also done when the main contractor wishes to engage a specialist to be able to
produce better work. For example, the project may have requirements regarding furnishings and
fittings. The main contractor may not have the expertise to produce the work to the level that the
owner is expecting. As such he would engage an external carpenter to produce the work after the
completion of the super structure.

Sub-contracting may also be done so that the sub-contractor can concentrate on other parts of the
project. The building may be split into different floors so that works can be done simultaneously and
work can be completed faster.

2c) Nominated sub-contractors are paid after the main contractor receives the payment response.
The payment response will detail how much each nominated sub-contractor should be paid. The
main contractor should follow the payment response to pay each sub-contractor and pay them
accordingly. In the case that the main contractor fails to pay the sub-contractor, the owner can
choose to pay the sub-contractor first and deduct the amount from future payments to the main
contractor.
3a) the schedule of rates states the cost of each item based on the bill of quantities. The cost can be
a monetary value, or a percentage of the rates provided by the main contractor. The schedule of
rates will be used to derive the total cost to be paid to the contractor and will affect which
contractor is selected for the project. Once the contract is awarded, the contractor will be paid using
the figures from the schedule of rates. For example, if there are pipes that are delivered to the site
and have not been installed, the main contractor can claim for delivered materials from the owner
based on the schedule of rates.

3b) (i) Retention monies are a percentage of the money that is retained from the payment to the
main contractor so that the contractor is incentivized to complete the project with minimal defects.
It is also retained if materials break before, they are installed. The retention monies will be released
to the contractor once the certificate of substantial completion and the maintenance certificate is
given to the contractor.
(ii) Liquidated damages are an estimate of losses that the owner will have if there are delays to the
completion of the project. The value will be charged to the contractor daily for the delay of the
project completion. This value will be deducted from the final payment certificate as long as the
liquidated damages clause is included in the contract.

3c) Payment response reference no.:006 Payment response date: 09 May 2022
To: Qing Jian International Pte Ltd
Service address: 53 Kallang Pudding Road Tel: +65 6748 7117
#10-02 Crescent @ Kallang, Singapore Fax: +65 6748 7110
S349315 Email: qingjianinternational@cnqc.com.sg
Person-in-charge (claimant): Amberle Ann Lee, Quantity Surveyor, 8191 7811

From: Qing Jian Realty Pte Ltd

Service address: 65 Paya Lebar Road, Tel: +65 6422 1621
Paya Lebar Square #07-13 Fax: +65 6422 1600
Singapore 409052 Email: enquiries@cnqc.com.sg
Person-in-charge (respondent): Mr Eric Lim, Project Manager, 9150 7023
Particulars of Contract
Project title: The Selection at Woodlands
Contract Identification
Contract title/ description:
Construction of 3 Storey bungalow with attic and swimming pool on Lot 00671K MK22 at
36 Admiralty Road (Woodlands Planning Area)
Contract number: A1618
Date Contract made: 15 November 2021
Reference period of claim: 01 April 2022 to 31 April 2022
Payment Claim Identification
Payment claim identification
Payment claim reference number: CPL\FPL\Payment-X
Payment claim date: 02 May 2022
Claim amount: $3,800,000 + $2,190,000 + $3,200,000 + $240,000 + ($50 x 200) + ($5 x
2000) + $20,000 = $9,470,000
Derivation of response amount
Work carried out by contractor $9,430,000 + 25,800
Unfixed goods & materials $40,000
Nominated sub-contractor, suppliers or -
designated PC work
Unfixed goods & materials of nominate -
sub-contractor, suppliers
Total $9,455,800
Deduction for retention 10% x $9,455,800= $945,580
Deduction for retention on materials 20% x $40,000 = $8000
Less defective works deduction -
Less amounts previously paid $7,280,000
 Response amount $15,300,000 - $7,280,000 - $945,580 -
$8000 = $7,066,420
Response amount in words
Singapore Dollars Seven Million Sixty Six Thousand Four Hundred and Twenty

Name of respondent / authorised representative: ___________________________

Authorised Signature & Organisation stamp: ___________________________

Date (DD/MM/YYYY): ___________________________
4a) Two conditions that warrant an extension of time:

1) A variation to the works that results in additional work needing to be done that will cause
delays in the project timeline.
2) A natural disaster such as flooding or fire that caused substantial damage to the property
that needs time to be repaired before work can continue.
3) A government mandated island wide closure that causes disruptions to the works as workers
will not be able to go to the site.
4) An island wide worker strike that reduces the manpower on site and therefore work cannot
be done.

4b) The 2 ways that contractors manage the risk of construction is to either indemnify themselves
against damages from the contractual stage or to procure insurance in case of damages that they
may not be able to foot.

When indemnifying themselves, the contractor can choose to pass some of the risk to the sub-
contractor in the contract or control the amount of responsibility the owner passes to them in the
contract.

When procuring insurance, there are insurance policies for workers and there are insurance policies
for the works itself. Under WICA, the contractor must procure insurance for his workers so that his
workers can claim their hospital expenses in the event of injury or death while working on the
project. For damages to property while working on the project, the contractor may choose to
procure liability insurance. This will cover any damages or defects that will require repairs to the
work. The contractor may also choose to include an excess clause to only cover damages above a
certain threshold. This will reduce the insurance premium the contractor has to pay and reduce the
contract price cost. However, it means that for all damages below the excess amount will be paid for
by the contractor.
4c) As the arbitration clause cannot be used by the sub-contractor, I would suggest he find another
method to receive payment. He is allowed to stop work until he receives payment from the main
contractor. This is to stop any additional expenses incurred by the sub-contractor until he can be
paid for the work he has completed thus far.

I would then ask the sub-contractor to approach the owner for payment as the nominated sub-
contractor was selected by the owner and continues to have control over the sub-contractor even
though he is in a contract with the main contractor.