General view in payment obligation



AssignmentMBG 1243 –Construction Contract Studies 1 Lecture : En Norazam OthmanComparative analysis on clauses concerning payment and obligations:PWD Form 203APWD Form DB (Rev. 2007)PAM Contract 2006 (With Quantities)NAZIB FAIZAL (MB101105)Faculty of Build EnvironmentCourse : MSc- Construction Contract ManagementGeneral view in payment obligationClauses that related to the payment obligation are in REF _Ref275886910 \h Table 1. PAM 2006 governs the payment in clause 30. PWD 203A governs the payment in clause 28, and PWD DB governs payment in clause 31, 36, 53, 55, and 57.Table 1 Clauses that related to the payment obligationNoStandard FormClauseDescription1PAM 200625Determination of contractor’s employment by employer26Determination of own employment by contractor30Certificates and payment37Performance bond2PWD 203A28Payment to contractor and interim certificates31Final account and payment certificate54Payments upon termination60Payment to nominated sub-contractor or supplier3PWD DB31Default in payment of wages36Direct payments to contractor’s consultants53Interim payments55Effect of PD’s certificates and payment by government57 Advance payment63Payments upon terminationIn this assignment, I would like to compare base on:Parties who involves in payment obligationType of paymentInterim payment stages statementAdvance paymentProcedure of Interim PaymentSchedule of issuing interim certificatesRequirement upon issuing interim certificatesContractor’s obligation in applying paymentProcedure of payment upon completionWages of workmen affects the final paymentRetention fund/performance bondPayment for liquidated damagesPayments upon terminationPerformance bondDirect payment to the third partyLate payment by government/employerComparisonNoItemPAM 2006PWD 203APWD DB1Parties who involves in payment obligation:parties involves:ContractorArchitect Quantity SurveyorEmployerparties involvesContractorSuperintending Officer(SO), or SO’s representativesEmployerparties involves:ContractorProject Director (PD)Employer2Type of paymentsStagesStagesAdvance payment and stages3Interim payment stages statementStated in appendixStated in appendixStated in appendix4Advance paymentNo advance paymentNo advance payment25% of the value of the contract sum5Procedure of interim paymentProcedure:Contractor submit a payment application at the interim claim interval as stated in the AppendixArchitect and Quantity consider and ascertain the amount in 21 daysArchitect issues the interim certificates base on consideration and certain amountEmployer pay the contractor base on interim certificates issued by architectProcedure:Contractor shall complete the work as in AppendixRegarding to the complete work, SO shall make valuation of the complete work in 14 daysSO issuing interim certificatesGovernment pays the contractor base on interim certificatesProcedure:Contractor shall submit interim payment applicationPD consider and ascertain the amount in 28 daysPD issuing the interim payment certificatesGovernment pays the contractor base on interim certificates6Schedule of issuing interim certificates 21 days14 days28 days7Schedule of interim certificates paymentWithin the period of honouring certificatesStated in appendix, if it not stated = 30 daysStated in appendix, if it not stated = 30 days8Contractor’s obligation in applying paymentComplete details and particulars as required by the Architect and Quantity SurveyorTo make a works is done and SP can make a valuationThe value of works done and properly executedThe amount on any valuation of variations or the instructions by the PD (clause 24The amount in regard to the expenditure of provisional sums executed or expended (clause 25)The value of any goods or unfixed materials delivered to or adjacent to the site intended for use or to be incorporated into the worksThe upervision reports as required by the PD under clause 13.1 9Procedure of payment upon completionAfter six month after practical completion of the works, the contractor shall send all documents necessary for preparing the final count to Architect and Quantity SurveyorIf the parties are agree in final account, then architect shall issues penultimate certificate for the release of the retention sums and any other outstanding sumWithin 21 days after the period oh honouring certificates for the payment of the penultimate certificate and within 21 days after the certificate of making good defects has been issued, in the event no penultimate certificate has been issued; the final certificate shall be issued by architectFinal certificate are issued which consists of final account and the total sums certified in previous payment certificatesIf any difference between balance due to contractor and employer, the balance shall be payable by the employer to the contractor within the period of honouring certificatesWithin 3 month after the issuance of the certificate of practical completion, the contractor shall submit application to enable the final account prepared by the SO. If contractor failed, SO shall forthwith make the assessment based on available document for the final accountWithin 3 months after the expiry of the defects liability period for the whole of the works or 3 month after the issue of the certificate of completion of making good defects under clause 48 hereof, SO shall issue the final certificate that consists of supported documents, full particulars complete with receipt, vouchers, final valuation, any amount determined in clause 31.1Final payment is paid by the government to the contractor. Final payment will not be paid unless the contractor satisfied the SO in his obligation due to the workmenWithin 3 month after issuance of the certificate of completion of making good defects or the certificate of completion of maintenance (if any), Contractor shall submit to PD a statement of the final account showing in detail the value PD proceed to verify the final account based on the document which is given by contractorIf final account is verified, PD shall issues Final certificate which consists of balance sumFinal payment is paid by the government to the contractor. Final payment will not be paid unless the contractor satisfied the SO in his obligation due to the workmen10Wages of workmen affects the final paymentFinal payment is not affected by wages matter between the workmen that have been employed by the contractor, workmen employed by sub contractor, labor, and etcWages of all the workmen has to be paid and all contributions under the Employment Act 1955, The Employee;s Social Security act 1969, The Employee’s provident Fund Act 1991 and any other laws relevant to the employment of workmen have been paid.Wages of all the workmen has to be paid and all contributions under the Employment Act 1955, The Employee;s Social Security act 1969, The Employee’s provident Fund Act 1991 and any other laws relevant to the employment of workmen have been paid.11Retention fund Retention fund will release after Architect issued Pnultimate Certificate. Performance bond shall be refunded to the contractor without interest on the completion of works.No retention fund is applied in government standard form. No retention fund is applied in government standard form. 12Payment for liquidated damagesIf the contractor fails to complete the works by the completion date, Architect shall issue a certificate on non-completion. Upon the issuance of the certificate of non completion , the contractor shall pay or allow to the employer a sum calculated at the rate stated in appendixIf the contractor fails to complete the works by the date for completion or within any extended time granted pursuant to clause 43, the SO shall issues a certificate of non completion to the contractor and notice the intention of the Government to impose liquidated and ascertained damages that stated in appendix.If the contractor fails to complete the works by the date for completion or within any extended time granted pursuant to clause 49, the PD shall issues a certificate of non completion to the contractor and notice the intention of the Government to impose liquidated and ascertained damages that stated in appendix.13Payment upon terminationBase on reasonable valuation and put in the final account.Base on reasonable valuation. If contract is terminated under clause 50 and 52, the amount to be paid (in so far as such amounts or items have not already been covered by payments on account made to the contractor) shall be the following:The value of all work carried out up to the date of terminationThe amounts payable in respect of any preliminary items so far as the work of service comprised therein has been carried out or performed and a proper proportion of any such items which have been partially carried out or performedThe cost of materials or goods reasonably ordered for the works which have been delivered to the contractor or of which the contractor is legally liable to accept deliveryA sum being the amount of any expenditure reasonably incurred by the contractor in the expectation of completing the whole of the works in so far such expenditure has not been recovered by any other payments The reasonable cost of any protection works and removal of equipment and site facilities pursuant to termination as provided under the contract.Base on reasonable valuation. If contract is terminated under clause 50 and 52, the amount to be paid (in so far as such amounts or items have not already been covered by payments on account made to the contractor) shall be the following:The value of all work carried out up to the date of terminationThe amounts payable in respect of any preliminary items so far as the work of service comprised therein has been carried out or performed and a proper proportion of any such items which have been partially carried out or performedThe cost of materials or goods reasonably ordered for the works which have been delivered to the contractor or of which the contractor is legally liable to accept deliveryA sum being the amount of any expenditure reasonably incurred by the contractor in the expectation of completing the whole of the works in so far such expenditure has not been recovered by any other payments The reasonable cost of any protection works and removal of equipment and site facilities pursuant to termination as provided under the contract.14Performance bondIn the event, If the employer determine the employment of the contractor, or if there is any breach of contract, the employer may call on the performance bond and utilize and make payments out of or deduction from the performance bond for the completion of and/or rectification of the works and reimbursement of loss, and or/expense suffered by the employer.In the event, if the contractor determines his own employment, the employer shall return the performance bond to the contractor for cancellation.If the contractor fails to performs any of his obligations under the contract and such failure is non remedied in accordance with this contract, the government shall be entitled to call upon the performance bond, wholly or partially.The performance bond may be released or refunded to the contractor upon the completion of works.If the contractor fails to performs any of his obligations under the contract and such failure is non remedied in accordance with this contract, the government shall be entitled to call upon the performance bond, wholly or partially.The performance bond may be released or refunded to the contractor upon the completion of works.15 Direct Payment to the third partyNo provision for direct payment to the subcontractor/consultantsGovernment shall paid the nominated sub contractor/suppliers according to interim certificates/final certificatesApplied in direct payment to the contractor’s consultants. For the purpose of payment to the consultant, the contractor and the consultant shall enter an irrevocable Deed of Assignment for the assignment of any money due to the consultant to be paid directly by the government.16Late payment by employer/governmentEmployer shall pay interest basen on the Maybank Lending Tate plus one percent No provisionNo provision ................
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