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57 151202 1227452745 Contract Management Under Pam Contract 2006 An Architects Perspective by Ar Joseph Tan
57 151202 1227452745 Contract Management Under Pam Contract 2006 An Architects Perspective by Ar Joseph Tan
As per the title, this paper only seeks to look into the
Architect's role during the management and administration
of the PAM Contract 2006.
The types of information to be managed may comprise (and are also not
restricted to) the following :
Once issued, the Contractor has to follow the above levels and setting
out. Should there be any errors in constructing the works relative to the
above, the Architect is empowered to either instruct that the errors be
corrected or (subject to the Employer's consent), accepted subject to
any Deductions.
A. The Management of Information. Cont.
Custody of Tender Documents.
.
A. The Requirements.
Statutory Management of Information. Cont.
- It has already been noted that the Contract Documents should have
been checked and it's also assumed that the building arising out of
these documents should be in full compliance with any statutory
requirements.
- AsThe
A. and when additional information
Management of may be required (either
Information. Cont.to clarify
the existing design or to cater for any variation or changes), the
Architect is again obliged to issue two (2) copies of such information to
the Contractor (Clause 3.4).
It must also be remembered that the Contract allows for the Contractor
to apply for such information and once applied for (in writing), the
Architect is obliged to issue such information within a period which
“does not materially affect the progress of the works”, i.e.; the Architect
has to issue the information in a manner which does not cause any
delays to the Contractor.
A. The Management of Information. Cont.
Again, it is the Architect's job to ensure that the above is issued at the
appropriate time and once issued, that it is checked.
A. The Management of Information. Cont.
- Management of Information is not just the production and assessment
of information between the Architect (as Contract Administrator) and
the
contractual parties.
- Documents like the Works Progamme (Clause 3.5) will normally detail
out the Contractor's Work Process.
This usually means that the Architect has to check and ensure that the
correct insurance coverage (as required under Clause 19 and 20) are
appropriately taken out.
.
- Very often, the work process requires the appointment of specialist
B. The Management
sub-contractors of Work
(whose nomination Process
is allowed & 27).
for under Clause
It isConditions Cont.
the Architect's job to advise the Employer on the allowance of any
required Prime Cost (PC) Sums, the subsequent identification and
selection of these sub-contractors and their nomination in accordance
to the Contract.
.
are built in accordance to the Contract, i.e.; the Employer gets what he
pays for.
C. The
- The Management
Contract of Quality.
facilitates the Architect in carrying out this task by :
.
- If the works or materials employed are NOT in compliance with the
Contract, the Architect is further empowered to issue instructions for the
C. The ofManagement
removal of Quality
any materials, demolition Cont.
of any works as well as the
rectification of such works (Clause 6.5).
.
If these progressive payments are jeopardized, a Contractor may not
be
D.
ableThe Management
to finance of Cash
the remaining works, thus inFlow.
turn, jeopardizing the
remainder of the works.
- Under the PAM Contract 2006, the Contractor is required to submit his
progressive claims at set intervals for the Architect to evaluate.
.
- As the issuance of Interim Certificates ultimately involves the subject of
D. Theit Management
money, is both a contentiousof
andCash issue – important
Flow
important Cont.enough
that it deserves a paper of its own.
For those who are intereted in finding out more on this subject, they
may refer to the writer's paper entitled “Architect's Certification under
PAM Contract 2006”.
.
.
Nevertheless as seen earlier when discussing the possible differences
between tender and contract drawings, change is veryoften inevitable
with differences also possibly occuring between the Tender, Contract
E.andThe Management
Construction drawings. of Change.
The issuance of such instructions for Variations may only take place
during Construction, i.e.; before the issuance of the Certificate of
Practical Completion UNLESS such a variation is required by a
Statutory Authority or Service Provider (Clause 11.3).
.
has to assess the impact such variations may have on the
progress of the works, the rights of both the Contractual Parties
and advise them accordingly.
E. The Management of Change Cont.
- Should the instruction for a variation be issued, resulting in
alterations or modifications of the design, quality or quantity of the
Works, the Architect has to ensure that the Contractor is paid
(or the Employer is compensated) accordingly by valuing the work
arising from the variation.
.
- The valuation of such variations follow strict rules whch identify
whether the work is of a simlar character to that already described in
the Contract and if it is of a similar nature, whether the conditions under
E.which
ThetheManagement
work is undertaken is ofalso
Change
similar to thatCont.
already described in
the Contract (Clause 11.6).
Where the work is not similar, the Contract allows for valuations at “fair
market rates”, the use of daywork rates or valuations based on actual
cost (Clause 11.6(c) & 11.6(d)).
.
- The process of completion and subsequent possession is defined
under the Contract as “Practical Completion”.
- Practical
F. Completion may occur
The Management ofinCompletion.
a single stage, i.e. ALL the Works
are completed and handed over in a single stage OR, it may occur in
multiple stages.
- The stages may not have been planned for prior to entering into the
Contract, i.e.; as with Partial Possession (Clause 16.0)
.
- Partial Possession under the Contract, may only occur with the
Contractor's consent UNLESS :
.
Upon receipt of this notice, the Architect has to evaluate this notice and
within 14 days, he has to either :
F. The Management of Completion Cont.
a. reject the notice by giving a written notice in reply to the Contractor,
specifying the grounds for such rejection OR
b. where there are minor defects which do not affect the Employer
enjoying full use of the Building, he may issue the Certificate of
Practical Completion upon receipt of the Contractor's written
undertaking to make good these minor defects OR
.
- The responsibility in determining whether the Works have reached
Practical Completion lies solely with the Architect.
F.Although
The Management of Completion
the decision as to whether Cont.
the Works are practically
completed rests on the Architect's opinion, this has to be an opinion
which is arrived at based on the factual conditions on site and whether
the Employer may enjoy the full use of the Building according to its
intended use.
.
.
a. issuance of a Certificate for the release of the 1 half of the retention
sums,
F.b. The
adjustment of the retention sums,
Management of liquidated damaged
Completion and
Cont.
Performance Bond where Practical Completion involves Partial
Possession or Sectional Completion,
.
- Just as Practical Completion is based on the expression of the
Architect's opinion, the determination as to whether a building fault or
damage is a bona fide defect for which a Contractor is liable shall
F.also be based
The on the Architect's
Management of opinion
at objectively and be based on fact.
which in turn, should
Completion Cont. be arrived
.
made good and certified with a Certificate of Making Good Defects
followed by the issuance for a Certificate for the release of the
balance of the retention sums,
F. The Management of Completion Cont.
b. the Final Account has been settled (within the “Period to complete
the Final Account”) and FINALLY,
.
PAM Contract 2006 recognizes the inevitability of this and attempts to
provide a basis for planning for the unexpected and unintended.
F. TheofManagement
- Some the unexpected and of Contingencies.
unintended events provided for in the
Contract are the perils listed under Clause 20 which range from fire
and theft, through to natural disasters like earthquakes or tsunamis to
events such as riots or civil commotions.
.
Hostilities (Clause 31), the sustaining of War Damage (Clause 32) or
the discovery of Antiquities (Clause 33) on the site.
F.
- It The Management
is sincerely of Contingencies
hoped that all Architects Cont.
never have to manage
contingencies such as the outbreak of hostilities but should the
need ever arise, they need to be aware of the role they are
required to undertake.
.
The delays may arise from the Clause 20 perils, war damage of the
discovery of Antiquities as previously discussed or it may be a result
of acts of omission or commission by the Architect, Consultants,
F.Employer,
The Management of Contingencies
Contractor, Nominated Cont.
Sub-contractor, Statutory Authority
or Service Provider.
.
The submission of this notice followed by the subsequent submission
of details of the relevant event and delay and the assessment of such
F.information
The Management
have to also followof Contingencies
a specific time frame. Cont.
The rationale for all the above steps is to ensure that the Contractor
continuously monitors his own progress and that all delays are dealt
with as soon as reasonably possible.
Failure to follow the procedure and time frame may either cause a
Contractor to lose his rights to claim for an extension or lead a
Contract
to suffer from time being set at large.
.
.
Employer that any interference on their part in the assessment and
granting of an extension constitutes a breach of Contract.
F. TheanManagement
- Should ofwith
extension be granted Contingencies Cont.
the issuance of a Certiicate for
An Extension of Time, setting a new completion date, the Architect
should also ensure that all affected parties such as the Employer,
Consultants and Nominated Sub-Contractors are informed and that all
insurances or Performance Bonds are extended to cover the new
completion date.
.
- Apart from being granted additional time to complete the Works, a
Contractor may have also suffered additional expense or losses arising
from the delay.
F. The Management of Contingencies Cont.
- The Contract allows for the Contractor to claim under certain
circumstances (as set out under Clause 24.3) for such losses or
additional expenses (Clause 24) but as with the process of claiming for
an extension of Time, there are set procedures and time frames to be
followed by the Claimant and the Architect as the Contract
Administrator.
.
.
- Should the Works remain uncompleted on the Completion Date and if
the Architect is of the opinion that it ought to have been completed,
i.e.;there are no grounds for the granting of an extension of time, the
F.Architect
The Management of Contingencies
is obliged to issue a Certificate Cont.
of Non-Completion.
.
- Another set of possible contingencies which may occur is the
Insolvency of either the Contractor (Clause 25.3) or Employer (Clause
26.3).
F. The Management of Contingencies Cont.
Strictly speaking, once either of the Contractual Parties are declared
insolvent, the Contract shall no longer be able to proceed and should
be terminated.
.
- Even without disputes, breaches of Contract may still occur and such
breaches of the Contract may result in suspension of the Works by a
Contractor or Determination of a Contractor's Employment by an
G. The Management
Employer OR Determination of Disputes.
by an Contractor of his own
Employment.
.
such dispute by the appointment of an independent third party through
the process of :
G.a.The Management
Mediation (Clause 35) andof Disputes.
- Although the above are dependant on a third party, the utilisation of any
of the above Alternative, Dispute Resolution Procedures (including the
appointment of either the mediator, adjudicator and arbitrator) has still
to be in accordance to the procedures set out in the Contract.
.
- Although the provisions for Adjudication and Arbitration are clearly spelt
out, it must be noted that the introduction of recent federal legislation
may affect the utilisation and validityof these provisions as specifically
G. TheforManagement
allowed under PAM Contract of2006.
Disputes Cont.
All Architects as such,are advised to keep abreast of any future
developments and pronouncements with respect to these dispute
resolution clauses.
.
seek to briefly high-light some of these areas.
The ultimate intention of this brief look though is to spur all Architects
CONCLUSION.
to examine (or review) their role in managing the Contract with much
greater detail, rigour and precsion.
T H A N K Y O U.