WEEK 4

LEARNING OUTCOMES (CO1-PO1)

Understand the contract document
Understand how to prepare the bill of quantities

CONTRACT
Agreement of at least two parties with purpose of creating
legal obligation between the parties and capable of being
enforced by the court of law.
Contract = offer + acceptance + consideration

What is contract document?

@nurkamaliahmustaffa2013

Contract Document
Can be defined as a legally binding
agreement between parties.
In civil engineering works, the contract
document is normally an agreement to
have work done in return for a specified
sum of money.
The client commissioning the work is
legally known as the employer while the
party carrying out the work is legally
known as the contractor.

@nurkamaliahmustaffa2013

Who is involve in the contract?

The client commissioning the work is legally
known as the employer.
The party carrying out the work is legally
known as the contractor.

It is very important for the person preparing the contracting requirements and
other documents to fully understand the implications of what does, and does not,
constitute the Contract Documents; failure to properly designate the Contract
Documents can be a significant contractual flaw.

Construction Documents
Construction Documents are defined as the written and
graphic documents prepared or assembled by the A/E for
communicating the design of the project and administering
the contract for its construction.

2 major groups
1.Bidding Requirements
Used to attract bidders & explains bidding process
2.Contract Documents
Legally enforceable requirements that become part of the
contract
Include all construction documents except bidding forms

CONSTRUCTION DOCUMENTS

Introduction to contracts
Why Use contract in construction:
Describe scope of work
Establish time frame
Establish cost and payment provision
Set fourth obligations and relationship
Minimize disputes
Improve economic return of investment

Content of the
contract
o Identify the parties
o Promises and responsibilities
o Scope of work
o Price and payment terms
o Commercial terms and conditions
o Project execution plan.

CONTRACT DOCUMENTATION
1.General Condition of Contract - Provide legal binding agreement between parties
and they cover the essential points such as completion date of work, method of
payments and access to the work etc.
2.Contract Drawing Show the location, scope of works and design intricacies
(details) and what else are required to be constructed are also shown as far as
possible.
3.Specifications Details out the quality and standards expected of the works since
the construction drawing are not able to graphically show the entire quality required.
As such, it is essential for the specifications to be read in conjunction with the
drawings in order to comprehend the full extent of the quality and standards required
since the specifications will detail out the quality and standards of materials and
workmanship required or expected of the works.

CONTRACT DOCUMENTATION CONT

4.Bill of Quantities In section 1 paragraph 7 (rule 1.7) of the CESMM, it is defined
that quantities are List of items that gives brief identifying descriptions and estimated
quantities of work comprised in contract.
This definition emphasizes the importance of being brief but yet concise in the
preparation of BQ and thus, similar information should not be repeated. The term
estimated is used in the definition because of the uncertain nature of civil
engineering works which is thus the reason for the requirement of re-measurement of
works on site to determine the actual quantities utilized or executed.
* In view of the status of the current of Form of Contracts used, BQ is not mandatory
document to the contract but it is complimentary to the other 3 essential document
which would have (or should have) adequately described what are actually required
to be done contractually.

Form of contract

Form of tender

General condition of
contract

The
contract
documents
normally used in a civil
engineering contract consists 6
items:

Contract drawings

Specification

Bill of quantities

@nurkamaliahmustaffa2013

It is a formal agreement between client and

contractor for the execution of the work accordance
with the other contract document.

Form of contract

Generally covered by the Form of Agreement @ Contract

incorporated in the General Condition of Contract for the use
in connection with works of civil engineering construction.
@nurkamaliahmustaffa2013

@nurkamaliahmustaffa2013

storage available
to the contractor

Generally define the

terms under which the
work is to be undertaken

The relationship between

the client or employer

sequence of
construction

access to
the work

General condition
of contract

The powers
of the engineer

completion
date

maintenance

The engineer
and the contractor

method of
measurement

variation and
valuation of variation

The terms
of payment

Provide legal binding agreement between parties and they cover the essential points such as
completion date of work, method of payments and access to the work etc.

@nurkamaliahmustaffa2013

It describes in
detail the nature
quality and workmanship
required in the work

details of any special responsibility

to be borne by the contractor

Specification

any detail which not covered in the

General Condition of Contract

method to be
adopted in the
execution of the work

Details out the quality and standards expected of the works since the construction drawing
are not able to graphically show the entire quality required. As such, it is essential for the
specifications to be read in conjunction with the drawings in order to comprehend the full
extent of the quality and standards required since the specifications will detail out the quality
and standards of materials and workmanship required or expected of the works.

@nurkamaliahmustaffa2013

A list of items giving brief

identifying descriptions

Bill of Quantity

unit of measurement and

estimated quantities of the
work comprised in a contract.

Source: KAMALALDIN ABD. LATIF (2010) JKR. MALAYSIA

@nurkamaliahmustaffa2013

Contract Drawings

These indicate the location, scope

and design complexity of the works
and show graphically the full extent of
what is required to be constructed.

@nurkamaliahmustaffa2013

@nurkamaliahmustaffa2013

Form of Tender

It is a formal offer to execute the contract

works in accordance with the various contract
documents for the contract price or tender sum
and the contract period which the contractor is to
complete the works.
A performance bond is a surety bond (jaminan)
issued by an insurance company or a bank to
guarantee satisfactory completion of a project by
a contractor.
For example, a contractor may cause a performance bond to be issued in
favor of a client for whom the contractor is constructing a building. If the
contractor fails to construct the building according to the specifications
laid out by the contract (most often due to the bankruptcy of the
contractor), the client is guaranteed compensation for any monetary loss
up to the amount of the performance bond.

@nurkamaliahmustaffa2013