Sunday, February 28, 2010
What is FIDIC?
FIDIC – stands for “Fédération Internationale des Ingénieurs Conseils”
Headquarters in Geneva, Switzerland
Further information at www.fidic.org
The Parties in a FIDIC Contract
Contracting Authority/ Employer
Contractor - Contract between Employer & Contractor under Red/ Yellow FIDIC
Engineer - Contract between Employer & Engineer
Engineer to administer FIDIC Contract on behalf of Employer
FIDIC Conditions of Contract-Types of Manuals
FIDIC “New Red Book”
The Conditions of Contract for Construction:
“Which are recommended for building or engineering works designed by the Employer, or by his representative, the Engineer. Under the usual arrangements for this type of contract, the Contractor constructs the works in accordance with a design provided by the Employer. However, the works may include some elements of Contractor – designed, civil, mechanical, electrical and/or construction works”
FIDIC “New Yellow Book”
Conditions of Contract for Plant Design – Build
“Which are recommended for the provision of electrical and mechanical plant, and for the design and execution of building or engineering works. Under the usual arrangements for this type of contract, the Contractor designs and produces, in accordance with the Employer’s Requirements, plant and/or other works; which may include any combination of civil, mechanical, electrical and/or construction works”.
FIDIC “New Silver Book”:
Conditions of Contract for EPC (Engineering, Procurement, Construction)/ Turnkey Projects
“Which may be suitable for the provision on a turnkey basis of a process or power plant or factory or similar facility, or of an infrastructure project or other type of development, where (i) a higher degree of certainty of firm price and time is required, and (ii) the Contractor takes total responsibility for the design and execution of the project, with little involvement of the Employer. Under the usual arrangements for turnkey projects, the Contractor carries out all engineering, procurement, and construction EPC: providing a fully equipped facility, ready for operation at the “turn of a key”.
FIDIC “New Green Book” – the “Mini-Red Book”:
Short Form of Contract
“Which is recommended for building or engineering works of relatively small capital value. Depending on the type of work and circumstances, this form may also be suitable for contracts of greater value, particularly for relatively simple or repetitive work or work of short duration. Under the usual arrangements for this type of contract the Contractor constructs the works in accordance with a design provided by the Employer or his representative (if any), but this form may also be suitable for a contract which includes, or wholly comprises, Contractor-designed civil, mechanical, electrical and/or construction works.
FIDIC “Pink Book” -Harmonised Conditions of Contract for Constructions
Issued after several Multilateral Development Banks (MDB) agreed certain modifications for some Clauses, for better reflecting their financing principles.
Used for construction and engineering works, designed by the Employer (as in the Red Book)
Allows the Bank to suspend payments to Borrower – Sub-Clauses 2.4, 14.7 and 16.1
Engineer’s Authority may be unilaterally changed by the Employer – Sub-Clause 3.1
Modifications concerning selection and activity of DAB
Basic Principles and Selection of FIDIC Documents – New Red Book
Design primarily undertaken by Employer or his agent
Works are to be re-measured
Employer appoints Engineer to administer contract on his behalf
Engineer has power to vary works, but not change contract
DAB appointed within 28 days of commencement date and has powers to resolve any dispute and change “determinations” of Engineer
Basic Principles and Selection of FIDIC Documents – New Yellow Book
The Employer provides project requirements as defined under item “Employer’s Requirements” (ER)
The “ER” are the basis for the contractor to design and build the project. Errors within the “ER” are the liability of the Employer.
The contract is for a fixed sum and not re-measured.
The contract is administered on behalf of the Employer by the Engineer,
Provision is made for variations by the Engineer.
The general conditions (clauses 1 to 20), except clauses 5 & 12, are principally the same as red book.
Selection of FIDIC Documents – Risk Management
All contracts contain risks for both Contracting Authorities/ Employers and Contractors – There is no risk-free contract
FIDIC attempts to rationalise and allocate responsibilities for main risks
A key requirement is for the Contract Parties to fully understand the FIDIC General and Particular Conditions of Contract that set out their Responsibilities and Risks within a Project
Every risk given to the other party has its cost, no Party assumes a risk for free.
Main differences from previous FIDIC editions
The Engineer is no longer to act impartially, but is acknowledged to be the representative of the Employer
The Contractor is entitled to require the Employer to provide a proof of funds availability
Disputes Adjudication Board (DAB)
Dealing With Errors In Construction Documents
An email inquiry of last September in respect to construction insurance was the spark that caused me to write the article called, “Unraveling the Mysteries of Construction Insurance.” I hope it expands the understanding of an architect’s responsibility in the field of insurance.
A followup email asks about what, if any, I have written on architect’s errors and omissions. The subject is covered partially in “Professional Standard of Care for Architects and Engineers” in the May/June 2001 issue and in “Doing our Best to Avoid Claims,” in the Nov/Dec 2000 issue.
The subject is also addressed in my book, A Guide to Successful Construction — Effective Contract Administration, in Chapter 25.
Errors in the construction documents are a great embarrassment to architects and engineers, even if they don’t have great monetary value. But we all know that we are not perfect. It is almost inevitable that some errors will appear no matter how careful we are and regardless of the amount of checking we do.
One of the best ways of taking the sting out of it is to condition the client in advance. Before and during document preparation, tell the client that you and the firm are not perfect. You can say that you are careful and that you and all your personnel are competent. But you are not perfect. Tell the client that you will do your best but you cannot guarantee perfection any more than doctors or lawyers can.
The client might ask about your professional liability insurance. You can tell the client that the insurance only covers professional negligence, i.e., your deviation from the professional standard of care. An error, per se, is not negligence. For example, if an error remains in your documents even after being checked by a competent person, this is not negligence. It could be negligence, however, if the documents were not checked, and the error could have been uncovered if the drawings had been checked.
An error in judgment may not be negligence. Reread the article on professional standard of care, as that is the standard you must meet.
It is important that when an error comes to light, that the architect has an open and frank discussion with the client. Do not try to get the contractor to pay for it, as then you owe the contractor and you might be expected to return the courtesy in kind by overlooking the contractor’s errors, to the detriment of the client.
Maybe one of these days I will write an article on this topic. Don’t be too surprised if such an article borrows these lines from this letter.
Arthur O’Leary solicits suggestions from the readers of Design Cost Data for subjects that they would like to see covered in future. O’Leary’s email address is firstname.lastname@example.org. Please write him with any questions, thoughts, or subjects that you would like to see covered related to the practice of architecture or construction law.
Architects need to know enough about insurance to enable them to write their project specifications and to administer the construction contracts for their projects. A significant part of this knowledge is in knowing when to advise clients to seek the necessary insurance information from someone else.
At the very least, architects should read and be reasonably conversant with Article 11, Insurance and Bonds, of the AIA General Conditions (Note 1). These 24 paragraphs cover the contract requirements for the various forms of insurance that must be carried by the owner and the contractor.
Financial Responsibility for Accidental Losses
Unfortunate accidental occurrences causing severe property damage, personal injury, or death on a construction site could easily bring economic ruin to those who are financially responsible. It is customary to fund this awesome liability by means of insurance. Owners and contractors who enter into construction contracts owe each other the mutual obligation of providing insurance to cover certain specified risks.
Insurance is an extremely important element of the construction contract, so it is not surprising that over 10 percent of the text of the AIA General Conditions is devoted to this complex, arcane, and inscrutable subject.
AIA General Conditions
The AIA General Conditions of the Contract for Construction, Document A201, was extensively revised in 1997. The insurance portions were carefully considered, written and edited by construction industry legal and insurance experts in consultation with architects outstanding in the field of construction administration and documentation. Architects generally are not expected to be insurance experts but need to know how to cope with the insurance aspects of construction contracts and their administration.
The AIA General Conditions specifies the insurance requirements in broad general terms, while the Supplementary Conditions written by the architect must specify the specific insurance coverage required for the project, the interests to be insured, the policy limits, the perils to be insured, the insurance contract term, and the deductible amount.
It is a very risky practice for architects to provide insurance advice to their clients. Many professional liability insurance policies carried by architects specifically exclude coverage for the furnishing of insurance advice. The architect should respectfully but firmly decline to answer any insurance questions. Should an owner rely on an architect’s erroneous insurance or surety advice to its detriment, the architect would be likely to be held financially liable for the resultant damages.
Owner’s Instructions Regarding Insurance and Bonds
The AIA Owner-Architect Agreement, Document B141, also revised in 1997, provides in Subparagraph 18.104.22.168 that the owner will furnish all legal, accounting, and insurance services as may be necessary at any time for the project. Therefore, the architect should obtain the insurance requirements directly from the owner. Owners are not usually insurance experts either, so they will have to confer with their own legal and insurance advisors.
There is a convenient form devised by the AIA entitled Owner’s Instructions Regarding the Construction Contract, Insurance and Bonds, and Bidding Procedures, Document G612, 1987 Edition, which architects can present to their clients. It is in the format of a nine page questionnaire in three parts, A, B, and C. Part B, Owner’s Instructions for Insurance and Bonds, pages 4 through 7, can be used by the owner’s insurance advisor to instruct the architect in respect to the owner’s insurance and bond requirements. The architect can then rely on these instructions when writing the insurance specification in the Supplementary Conditions.
Certificates of Insurance
Evidence of insurance specified to be carried by owner and contractor must be provided as proof of its existence and its terms and conditions. Certificates of insurance are commonly issued free of charge by insurance carriers, agents, and brokers when requested by their insureds. Certificates of the contractor’s insurance should be addressed to the owner. (A201, 11.1.3) Copies of the owner’s property insurance should be addressed to the contractor. (A201, 11.4.6)
In the interest of promoting uniformity in construction industry documentation and administration, the AIA has issued a standard form of Certificate of Insurance, Document G705, which many construction insurers have adopted. This document may soon drop out of common use as a new insurance industry form is taking its place and is now recommended by the AIA. The Agency Company Organization for Research and Development issues the new form, designated as ACORD 25-S (3/88).
One of the most important aspects of an insurance certificate is the statement that the policies will not be cancelled or allowed to expire unless 30 days’ written notice has been given to the addressee of the certificate.
According to the AIA General Conditions, Subparagraph 4.2.4, all communications between owner and contractor shall be through the architect. Consequently, the insurance certificates from each party will flow through the architect’s administration to the opposite party. When the architect transmits insurance certificates, copies of insurance policies, or surety bonds, the covering letter should merely inventory the enclosures, but should not comment on the sufficiency of the carrier or surety or the adequacy or conditions of the coverage. The architect should advise the client to seek legal or insurance advice in appraising the insurance coverages underlying the certificates.
All specified insurance and bonds must be in force before any construction is undertaken at the jobsite. Insurance companies and sureties are reluctant to issue insurance coverage or bonds once construction operations are under way.
Insurance Coverage Required by the Contract
The owner and contractor are both required to carry liability insurance. (A201, 11.1 and 11.2)
The owner is also required to carry property insurance. (A201, 11.4) If the owner decides not to purchase property insurance, the contractor is entitled to purchase it and charge it to the owner. (A201, 22.214.171.124)
A new provision in A201-1997 provides that the owner, optionally, may require the contractor to provide Project Management Protective Liability Insurance. This coverage is in lieu of the owner’s and contractor’s liability insurance and covers the architect’s vicarious liability as well. This insurance will be paid for by the owner. (A201, 11.3)
Should an insured event occur on the project, the owner or contractor should make its claim to the insurance carrier, through its insurance broker. Although the architect may be asked to furnish relevant information underlying the claim, the owner or contractor should administer its own claim. If insurance information or services are required, the owner or contractor should rely on its legal or insurance counsel for appropriate assistance.
The Architect’s Insurance
The foregoing discussion concerns the insurance required by the construction contract (A201-1997) to be carried by the owner and the contractor.
The typical architectural office will insure its ongoing business risks with general liability insurance, automobile insurance, fire insurance, and valuable papers insurance. It might also carry life and health insurance for its principals and employees. Firms that have employees must carry workers compensation insurance.
In addition, the professional risks are insured by professional liability insurance, also called errors and omissions insurance. Other forms of insurance are also available.
Every architectural office should have a continuing relationship with a reliable and knowledgeable insurance advisor who will assist in deciding what forms of insurance are to be carried. A friendly insurance broker is a valuable asset when insurance information and advice is needed.
It is the owner’s prerogative to decide whether or not the contractor is to be bonded. Before making this important decision, the owner should discuss its advantages and disadvantages with its legal or insurance counsel. Some contractors cannot obtain a bond, usually because of insufficient financial resources. (Note 2)
1. General Conditions of the Contract for Construction, AIA Document A201-1997.
2. See “What an Architect needs to Know About Construction Bonds,” by Arthur F.
O’Leary, FAIA, MRIAI, in the Nov/Dec Issue of Design Cost Data.
3. For more information on construction insurance and bonds, see Chapter 9,
Construction Insurance and Chapter 11, Construction Administration When the
Contract is Bonded, in A Guide to Successful Construction — Effective Contract
Administration, Third Revised Edition, by Arthur F. O’Leary, FAIA, MRIAI.
Construction insurance is an important policy to have if you own, run or manage a construction site.
Construction insurance provides safeguards for you as an employer against your construction workers being injured on site. Construction insurance does not exempt you from maintain a safe workplace. Usually, construction insurance policies only pay out if a strict set of health and safety guidelines are followed.
Construction insurance also covers materials and machinery on the construction site in the event of an accident, fire or theft. Due to the high cost of building materials in the current economic climate, the theft of building materials is getting more commonplace and gives a good reason why you should opt for construction insurance.
Who needs construction insurance?
Construction insurance is an essential purchase for any builder, contractor, and construction company or construction manager. Considering the fickle nature of the construction industry, insurance can be comprehensive and cover a multitude of possible problems. The cost of solving these problems is normally many times the cost of the insurance premium. This is why construction insurance is an essential part of a construction budget.
What typically does a construction insurance policy cover?
Even on a very basic level, construction insurance covers all construction equipment and property in the case of accidental damage, theft and weather. For the workers on the construction site, full liability covering medical and legal costs and subsequent workers compensation is also covered. Regardless of the size of your project and the number of people on your team, you can have piece of mind by have a complete construction insurance package.
What typically does a construction insurance policy not cover?
The transportation of building materials from warehouse to building site is not normally covered but some of the better insurers are now covering this as standard. Construction insurance does not cover any extra costs incurred due to delayed completion of the project regardless of the reason for delay.
Additional insurance products
Construction insurance insures the property until it is built but does not cover subsequent problems the building may experience due to errors in workmanship. If you want total security surrounding any construction you are liable for, then you should take out professional indemnity insurance in the event you need to fix the property or the problems with the property have caused any injuries.
Additional coverage for a construction insurance policy
In construction, there are numerous contractors that will enter your construction site. How do you know how many are on your site at any time and are they the same contractors working from day to day? A standard policy may only cover your immediate workforce and specific contractors. Ensure your policy covers all the people who potential enter your construction site.
How much construction insurance typically cost?
Construction insurance is usually a percentage of your total construction budget. The size of the percentage is wholly dependant to the scope of the project at hand. You may find that a small house may be around 1% of your total cover whereas a high rise block may be over 5%. The exact percentages are then determined by the level of coverage required and the insurer you choose to go with.
A variety of different organizations are possible for quality and safety control during construction. One common model is to have a group responsible for quality assurance and another group primarily responsible for safety within an organization.
In large organizations, departments dedicated to quality assurance and to safety might assign specific individuals to assume responsibility for these functions on particular projects. For smaller projects, the project manager or an assistant might assume these and other responsibilities. In either case, insuring safe and quality construction is a concern of the project manager in overall charge of the project in addition to the concerns of personnel, cost, time and other management issues.
Inspectors and quality assurance personnel will be involved in a project to represent a variety of different organizations. Each of the parties directly concerned with the project may have their own quality and safety inspectors, including the owner, the engineer/architect, and the various constructor firms. These inspectors may be contractors from specialized quality assurance organizations. In addition to on-site inspections, samples of materials will commonly be tested by specialized laboratories to insure compliance. Inspectors to insure compliance with regulatory requirements will also be involved. Common examples are inspectors for the local government’s building department, for environmental agencies, and for occupational health and safety agencies.
The US Occupational Safety and Health Administration (OSHA) routinely conducts site visits of work places in conjunction with approved state inspection agencies. OSHA inspectors are required by law to issue citations for all standard violations observed. Safety standards prescribe a variety of mechanical safeguards and procedures; for example, ladder safety is covered by over 140 regulations. In cases of extreme non-compliance with standards, OSHA inspectors can stop work on a project. However, only a small fraction of construction sites are visited by OSHA inspectors and most construction site accidents are not caused by violations of existing standards. As a result, safety is largely the responsibility of the managers on site rather than that of public inspectors.
While the multitude of participants involved in the construction process require the services of inspectors, it cannot be emphasized too strongly that inspectors are only a formal check on quality control. Quality control should be a primary objective for all the members of a project team. Managers should take responsibility for maintaining and improving quality control. Employee participation in quality control should be sought and rewarded, including the introduction of new ideas. Most important of all, quality improvement can serve as a catalyst for improved productivity. By suggesting new work methods, by avoiding rework, and by avoiding long term problems, good quality control can pay for itself. Owners should promote good quality control and seek out contractors who maintain such standards.
In addition to the various organizational bodies involved in quality control, issues of quality control arise in virtually all the functional areas of construction activities. For example, insuring accurate and useful information is an important part of maintaining quality performance. Other aspects of quality control include document control (including changes during the construction process), procurement, field inspection and testing, and final checkout of the facility.
The development of a construction plan is very much analogous to the development of a good facility design. The planner must weigh the costs and reliability of different options while at the same time insuring technical feasibility. Construction planning is more difficult in some ways since the building process is dynamic as the site and the physical facility change over time as construction proceeds. On the other hand, construction operations tend to be fairly standard from one project to another, whereas structural or foundation details might differ considerably from one facility to another.
Forming a good construction plan is an exceptionally challenging problem. There are numerous possible plans available for any given project. While past experience is a good guide to construction planning, each project is likely to have special problems or opportunities that may require considerable ingenuity and creativity to overcome or exploit. Unfortunately, it is quite difficult to provide direct guidance concerning general procedures or strategies to form good plans in all circumstances.
There are some recommendations or issues that can be addressed to describe the characteristics of good plans, but this does not necessarily tell a planner how to discover a good plan. However, as in the design process, strategies of decomposition in which planning is divided into subproblems and hierarchical planning in which general activities are repeatably subdivided into more specific tasks can be readily adopted in many cases.
From the standpoint of construction contractors or the construction divisions of large firms, the planning process for construction projects consists of three stages that take place between the moment in which a planner starts the plan for the construction of a facility to the moment in which the evaluation of the final output of the construction process is finished.
The estimate stage involves the development of a cost and duration estimate for the construction of a facility as part of the proposal of a contractor to an owner. It is the stage in which assumptions of resource commitment to the necessary activities to build the facility are made by a planner. A careful and thorough analysis of different conditions imposed by the construction project design and by site characteristics are taken into consideration to determine the best estimate. The success of a contractor depends upon this estimate, not only to obtain a job but also to construct the facility with the highest profit.
The planner has to look for the time-cost combination that will allow the contractor to be successful in his commitment. The result of a high estimate would be to lose the job, and the result of a low estimate could be to win the job, but to lose money in the construction process. When changes are done, they should improve the estimate, taking into account not only present effects, but also future outcomes of succeeding activities. It is very seldom the case in which the output of the construction process exactly echoes the estimate offered to the owner.
In the monitoring and control stage of the construction process, the construction manager has to keep constant track of both activities’ durations and ongoing costs. It is misleading to think that if the construction of the facility is on schedule or ahead of schedule, the cost will also be on the estimate or below the estimate, especially if several changes are made. Constant evaluation is necessary until the construction of the facility is complete. When work is finished in the construction process, and information about it is provided to the planner, the third stage of the planning process can begin.
The evaluation stage is the one in which results of the construction process are matched against the estimate. A planner deals with this uncertainty during the estimate stage. Only when the outcome of the construction process is known is he/she able to evaluate the validity of the estimate. It is in this last stage of the planning process that he or she determines if the assumptions were correct. If they were not or if new constraints emerge, he/she should introduce corresponding adjustments in future planning.
What is Construction Bids?
Construction Bids are written offers from contractors to undertake a construction job in return of a certain sum of money. Bids can be either Negotiated Bid, Limited Competition, Selective Bid or Open Competition Bid. This article will talk about Negotiated Bid while the other will be written in fupcoming posts.
In this method the price to be paid in return of the work to be done is negotiated with a single contractor. This , obviously, does not provide the owner with a comparative prices. Though the cost of a work will be higher in this method, an owner may expect some advantages from employing a particular contractor whose policies and methods are known and who has in the past proved capable of fulfilling his obligations. The higher cost may be offset by better quality , early completion, and smooth administration.
The negotiated construction bid procedure can be adopted to the owner’s advantage if the chosen contractor is one in which the Owner and the Engineer have confidence, and which is of known integrity and reliability. Moreover, the work to be carried out is within his special scope and experience.
The procedure of the negotiated bid is as follows:
* The Engineer. on behalf of the owner, invites a contractor to submit a bid. The initial invitation includes information regarding the proposed contract procedure, a brief description of the work, the approximate dates of commencement and completion of the works as well as other essential information.
* The Engineer or the contractor prepares the priced bill of quantities. In many cases it would be more practical that the contractor do the original pricing, as he is in a better position to judge the correct price, which may depend on construction equipments and methods of execution to be adopted by him.
* The priced bills are then handed over to the other party for consideration.
* The rates are examined by the other party. Rates in dispute are compared with current rates for similar work, obtained in competitive tendering after allowing for the special features of the situation.
* When the Engineer and the Contractor reach agreement, the agreed schedule of prices is sent to the Owner for his approval and assent.
In this chapter, we consider the problems associated with resource utilization, accounting, monitoring and control during a project. In this discussion, we emphasize the project management uses of accounting information. Interpretation of project accounts is generally not straightforward until a project is completed, and then it is too late to influence project management. Even after completion of a project, the accounting results may be confusing. Hence, managers need to know how to interpret accounting information for the purpose of project management. In the process of considering management problems, however, we shall discuss some of the common accounting systems and conventions, although our purpose is not to provide a comprehensive survey of accounting procedures.
The limited objective of project control deserves emphasis. Project control procedures are primarily intended to identify deviations from the project plan rather than to suggest possible areas for cost savings. This characteristic reflects the advanced stage at which project control becomes important. The time at which major cost savings can be achieved is during planning and design for the project. During the actual construction, changes are likely to delay the project and lead to inordinate cost increases. As a result, the focus of project control is on fulfilling the original design plans or indicating deviations from these plans, rather than on searching for significant improvements and cost savings. It is only when a rescue operation is required that major changes will normally occur in the construction plan.
Finally, the issues associated with integration of information will require some discussion. Project management activities and functional concerns are intimately linked, yet the techniques used in many instances do not facilitate comprehensive or integrated consideration of project activities. For example, schedule information and cost accounts are usually kept separately. As a result, project managers themselves must synthesize a comprehensive view from the different reports on the project plus their own field observations. In particular, managers are often forced to infer the cost impacts of schedule changes, rather than being provided with aids for this process. Communication or integration of various types of information can serve a number of useful purposes, although it does require special attention in the establishment of project control procedures.
Take the following tips when you go for your next job interview so that you can make a positive impression and please your prospective employer as well as get that job:
Dress for success
Make sure that you are wearing your best clothes when you go for a job interview. You should wear a suit and tie if you are a man and a woman’s suit for a woman with low heels and stockings. Although most companies go for business casual nowadays, you do want to dress for success when you go for the job interview so that you can land the job.
Talk positively about your past jobs
Employers will most likely ask you about your past job experiences. Make sure that you talk positively about any experiences that you might have had when you were working. You should talk positively about them even if they were unpleasant experiences. Never talk bad about a past job or a past employer as it looks bad for you.
Answer questions straightforward
If you are asked a question that you do not understand, ask the interviewer to repeat the question and then answer in a straightforward manner. Job interviewers sometimes are vague with their questioning. If you answer questions in a straight forward manner and ask them to clarify what you do not understand, you have a better chance of giving a well informed and intelligent answer.
Remember your manners
Be sure to sit up straight, do not slouch and look the interviewer in the eye when you talk. Do not mumble your answers or look to the floor. Be sure to shake hands as this custom is always observed by both men and women. Remember your manners when you are in a job interview and that includes thanking the interviewer for taking the time to speak to you.
Toot your own horn
Never tell an employer anything negative about yourself. This is the time to toot your own horn and loud. While being self depreciating may be charming at a party, it can turn off a prospective employer. Do not brag, but be very detailed about your accomplishments and do not be afraid to list them.
Be confident, well groomed, informative and charming and you are sure to ace that job interview. And the most important for great Successful Job Interview is to Avoid the Job Interview Mistakes. Best luck!
A contract award letter is sent to the provider whose solution, in terms of value, best addresses the requirements defined in the request for proposal (RFP).
It is highly recommended that you to read the suggestions below in order to properly and successfully use the RFP contract award letter.
Use a formal letterhead and do not handwrite the RFP contract award letter.
First, thank the person who submitted the proposal for their time, effort, and interest in the project related to the issued RFP.
Next, notify the provider that the submitted proposal is the best apparent solution to the project for which the RFP was issued. Keep in mind that the award is not officially definitive, as unsuccessful providers have the right to formally contest their disqualification, rejection, or non-selection within a reasonable timeframe, as initially defined in the RFP. Therefore, do not sign any contract with the selected provider until the deadline to receive protests expires and all protests are settled.
Finally, close the letter formally with “sincerely” or a similar polite expression. Sign your name and title. Be sure to provide correct, complete contact and reference information for future correspondence.
Do not forget to send the contract award letter via certified mail.
Since things sometimes get a little more complicated than usual, remember to consult a lawyer for further information before doing anything.
Use templates and samples to create your award letter.
The Contract Award Letter is also known as: bid acceptance letter, bid award letter, RFP (request for proposal) award letter, proposal award letter, contract award letter or vendor award letter.
It is useful to think of a bid as being made up of two basic elements:
(1) the estimate of direct job cost, which includes direct labor costs, material costs, equipment costs, and direct filed supervision; and
(2) the markup or return, which must be sufficient to cover a portion of general overhead costs and allow a fair profit on the investment. A large return can be assured simply by including a sufficiently high markup. However, the higher the markup, the less chance there will be of getting the job.
Consequently a contractor who includes a very large markup on every bid could become bankrupt from lack of business. Conversely, the strategy of bidding with very little markup in order to obtain high volume is also likely to lead to bankruptcy. Somewhere in between the two extreme approaches to bidding lies an “optimum markup” which considers both the return and the likelihood of being low bidder in such a way that, over the long run, the average return is maximized.
From all indications, most contractors confront uncertain bidding conditions by exercising a high degree of subjective judgment, and each contractor may give different weights to various factors. The decision on the bid price, if a bid is indeed submitted, reflects the contractor’s best judgment on how well the proposed project fits into the overall strategy for the survival and growth of the company, as well as the contractor’s propensity to risk greater profit versus the chance of not getting a contract.
One major concern in bidding competitions is the amount of “money left on the table,” of the difference between the winning and the next best bid. The winning bidder would like the amount of “money left on the table” to be as small as possible. For example, if a contractor wins with a bid of $200,000, and the next lowest bid was $225,000 (representing $25,000 of “money left on the table”), then the winning contractor would have preferred to have bid $220,000 (or perhaps $224,999) to increase potential profits.
Some of the major factors impacting bidding competitions include:
Exogenous Economic Factors
Characteristics of Bidding Competition
Objectives of General Contractors in Bidding
Contractor’s Comparative Advantages
Tuesday, February 9, 2010
Public safety regulation
Exchange rate fluctuation
Attitudes of participants
Construction occupational safety
Uncertainty stemming from regulatory agencies, environmental issues and financial aspects of construction should be at least mitigated or ideally eliminated. Owners are keenly interested in achieving some form of breakthrough that will lower the costs of projects and mitigate or eliminate lengthy delays. Such breakthroughs are seldom planned. Generally, they happen when the right conditions exist, such as when innovation is permitted or when a basis for incentive or reward exists. However, there is a long way to go before a true partnership of all parties involved can be forged.
During periods of economic expansion, major capital expenditures are made by industries and bid up the cost of construction. In order to control costs, some owners attempt to use fixed price contracts so that the risks of unforeseen contingencies related to an overheated economy are passed on to contractors. However, contractors will raise their prices to compensate for the additional risks.
The risks related to organizational relationships may appear to be unnecessary but are quite real. Strained relationships may develop between various organizations involved in the design/construct process. When problems occur, discussions often center on responsibilities rather than project needs at a time when the focus should be on solving the problems. Cooperation and communication between the parties are discouraged for fear of the effects of impending litigation. This barrier to communication results from the ill-conceived notion that uncertainties resulting from technological problems can be eliminated by appropriate contract terms. The net result has been an increase in the costs of constructed facilities.
The risks related to technological problems are familiar to the design/construct professions which have some degree of control over this category. However, because of rapid advances in new technologies which present new problems to designers and constructors, technological risk has become greater in many instances. Certain design assumptions which have served the professions well in the past may become obsolete in dealing with new types of facilities which may have greater complexity or scale or both. Site conditions, particularly subsurface conditions which always present some degree of uncertainty, can create an even greater degree of uncertainty for facilities with heretofore unknown characteristics during operation. Because construction procedures may not have been fully anticipated, the design may have to be modified after construction has begun. An example of facilities which have encountered such uncertainty is the nuclear power plant, and many owners, designers and contractors have suffered for undertaking such projects.
If each of the problems cited above can cause uncertainty, the combination of such problems is often regarded by all parties as being out of control and inherently risky. Thus, the issue of liability has taken on major proportions and has influenced the practices of engineers and constructors, who in turn have influenced the actions of the owners.
Many owners have begun to understand the problems of risks and are seeking to address some of these problems. For example, some owners are turning to those organizations that offer complete capabilities in planning, design, and construction, and tend to avoid breaking the project into major components to be undertaken individually by specialty participants. Proper coordination throughout the project duration and good organizational communication can avoid delays and costs resulting from fragmentation of services, even though the components from various services are eventually integrated.
Attitudes of cooperation can be readily applied to the private sector, but only in special circumstances can they be applied to the public sector. The ability to deal with complex issues is often precluded in the competitive bidding which is usually required in the public sector. The situation becomes more difficult with the proliferation of regulatory requirements and resulting delays in design and construction while awaiting approvals from government officials who do not participate in the risks of the project.
The purpose of competition is to benefit your enterprise, and competition should not be promoted for the sake of competition. Indeed, in some cases, it may cost more to enter into a competitive procurement to do business directly with a supplier because of the unicity of the requested products, the inadequacy of other sources, the immediacy of your needs, or the emergency or legitimacy of circumstances. In other words, competitive procurement should be promoted pragmatism, with other methods thus becoming exceptions.
Competitive procurement is the contractual acquisition (purchase or lease) by an organization of any kind of asset, whether material (goods, products, or construction) or immaterial (services) with appropriated funds, enabling all deemed responsible sources to compete in a fair and open environment. Competitive procurement is also known as full and open competition (FOC), or competitive solicitation.
While procurement is supposed to bring fairness, impartiality, transparency, and suitability to corporate practices, a competitive procurement process will ensure the highest level of openness, thus maximizing the suitability of the requested assets or services, and the best return on investment (ROI).
Different Procurement Methods
1. Simplified acquisitions, like micro-purchases, small purchases;
2. Competitive Procurement: Full and open competition (FOC), like bids, proposals; or
3. Other than full and open competition (OFOC), like sole source.
Full and Open Competition (FOC)
The competitive procurement methods available for use in fulfilling the requirement for full and open competition in the acquisition process are
1. sealed bidding, relying on bids, also called sealed bids;
2. negotiated procurement, relying on competitive proposals; and
3. two-step sealed bidding, a combination of bidding and negotiating.
Competitive Procurement is also known as: Full and Open Competition, FOC, competition-based procurement, competitive procurement process, competitive solicitation, competition-based purchase process, competitive contractual acquisition, Competition In Contracting Act, CICA, competitive acquisition, competitive procurement processes, competitive purchase process, competition-based acquisition, federal competitive procurement, competitive procurement methods, Request for Proposals, RFP, RFP procurement, RFP solicitation, Invitation for Bids, IFB procurement, IFB solicitation, Invitation to Bid, ITB, ITB procurement, ITB solicitation, competitive procurement policies and procedures, competitive procurement methods, Federal Acquisition Regulation, or FAR.
When all the preliminaries are completed and the owner has decided to proceed with the work, tenders are invited. Legally this is an attempt to check if there would be interested contractors to carry out the work within the estimated limit of time and finance. The invitation to Tender is not binding to the owner to proceed with the work and does not cause any liability for any expenses to which contractors would spend in preparing and submitting their construction bids.
Information to be given in a Call for Bids Notice
The text of a good advertisement should at least include the following information:
Mode of submitted bids: Bidders should be asked to submit bids in sealed covers, in order to maintain secrecy of quotations.
Form of Bid: It is advisable to get all offers in the same form to facilitate scrutiny, and comparison
Name of the inviting authority: This helps the bidder know the persons he will have to deal with and the co-operation he may receive, if his bid is accepted, and such may also affect his quotation.
Nature of the work and its location: If the nature and location of work is within his operating area, the prospective contractor will want to learn more about the job; else he may not waste time in reading further details
Estimated cost of the work: This most briefly indicates the magnitude of the work and enables him o see whether it is too small to interest him or perhaps too large for him to handle.
Time Limit: The time limit within which the work is to be completed should be mentioned. This will be of great help to the bidder to work out a realistic price of the work.. The time limit may influence the type and number of construction equipments and workers to be employed, and will vitally affect the contractor’s bid.
The availability of Data and forms: where, from whom, at what cost and up to which date blank bid forms and specifications may be obtained and whether a refund will be made upon their return in satisfactory conditions.
Earnest money required with the bid: The amount and form of security; whether the amount will be accepted i the form of cash, bank guarantee, check or others. Also the number of days within which the amount will be refunded to the unsuccessful bidder.
Performance security: The amount, form, and procedure of recovering.
Information regarding drawings: where and when drawings can be examined by bidders.
Last date, place and time of receipt of sealed bid.
The date, time and place and procedure of opening bids.
Reservation to reject bids.
Tips for consideration in preparing construction bids
Sub-contractor’s work: Make relative inquiries about prices with sub-contractors and material suppliers for their respective portions of the job.
* Difficulty to access the site
* Limited space on the site for vehicle movements
* Type of soil and depth of water table
* Availability of space for storing materials on site
* Availability of materials, their sources and prevailing market prices
* Local availability of skilled and unskilled labor, prevailing wages for workmen
* Source and cost of water needed for construction
* Power and lighting source, and the cost of erecting, marinating and dismantling power connection to the site
Time for completion: The bidder then estimates the length of time the work will take and the number and category of permanent staff suggested by the nature of the work for construction management . This helps to calculate the establishment charges.
Temporary works: The value of any temporary works needed to commence the construction and to clear away on completion, such as temporary office required for construction management purpose, store sheds for building materials, access road, water supply, depreciation of construction equipments, insurances, taxes, etc.
Often, a subcontractor, whether an individual or a business, forms relationships with several general contractors. The general contractor working with a subcontractor does not employ the subcontractor as a regular employee in most cases. Instead the subcontractor is either an independent contractor, or is a company that provides its employees with required benefits like health insurance coverage.
Not having to extend benefits to a subcontractor is one way that the general contractor saves money on a job. However, if problems occur because of faulty work on the part of the subcontractor, usually the general contractor is held liable for such problems. The general contractor may attempt to seek redress with the subcontractor, or have defined terms in the contract with a subcontractor stipulating that the liability would be more evenly shared.
Frequently, though, hiring a subcontractor, or several, is a way to avoid problems in construction. Specialized workers like plumbers, electricians, or people who install heating and cooling devices, often called HVAC workers, tend to have more knowledge and training in their given field. While simply building something requires training and knowledge, people who are specialists better perform certain types of work.
The subcontractor and the general contractor are served well by being able to form good working relationships with each other. For the general contractor, access to a reliable subcontractor can mean finishing jobs on time and on budget. For the subcontractor, a good reputation among contractors means greater opportunities for consistent work.
A subcontractor often holds licenses in his or her specialty field. He or she might hold a general license to conduct work in a state, and also hold advanced licensing. Such licensing implies a certain amount of hours practicing his or her trade and knowledge regarding state building codes.
In some cases, one may also refer to a person hired for a few days of work, without a specialized field as a subcontractor. Really the more accurate term is independent contractor. The person is usually a temporary employee of the contractor, hired to finish work on time, or to temporarily replace another worker who is ill. This type of subcontractor may not have a general contractor’s license but may be hired for his or her carpentry skills.
Most commonly, the term ‘contractor‘ is used to describe an expert in the construction industry who hires skilled and unskilled workers to actually construct a financed project. A contractor must be licensed by an examining board before he or she can bid on the project. This bid is based on the estimated cost of the building materials, the wages of subcontractors and laborers and the contractor’s fee for coordinating the project.
Although a contractor’s main concern is hiring qualified subcontractors (specialized craftsmen paid by the contractor), he or she may also perform some of the construction work as well. Most contractors develop good working relationships with other construction specialists, so they often hire the same specialized companies and workers for each contracted project. The contractor is ultimately responsible for the quality of the work performed by subcontractors, so it doesn’t always pay to hire unknown entities to cut down on expenses.
A professional contractor should also have an understanding of his or her limitations. The client works with an architect and financier long before the first shovel of dirt is removed by a contractor. During the bidding process, a contractor may have to work with the building’s architect to discuss potential problems with a design element. If the complexity of the building’s design or the potential cost overruns threaten to overwhelm a contractor’s skills, he or she needs to step back and allow other contractors to win the bid. A good contractor understands that the success of the project depends on his or her ability to hire the right independent subcontractors and follow the wishes of the client.
In a different sense, a contractor could also be anyone who agrees to perform work for a fee. This occurs frequently in businesses which cannot afford to assign or hire a new employee to perform a specific job. The job itself may not be long-term enough to justify the expenses of a new hire, or the wages may not be sufficient for established employees. Companies in this situation often hire ‘independent contractors’ to perform the job without a formal employment agreement. The pay rate is discussed with each independent contractor and a legal agreement may be produced. After completing the job, an independent contractor receives the entire amount of pay without tax deductions or other withholdings. At the end of the tax year, the company issues a federal 1099 form showing the independent contractor’s miscellaneous income earned.
Bidder Responsibility Determination
Bids are evaluated with no discussion held with the bidders. Because bid evaluation and comparison are limited to price and other price-related factors only, the decision cycle of Bidder Responsibility Determination is shorter than other competitive procurement methods that have to deal with more complex, non-price-related evaluation factors.
Evaluation of bids is two-fold. After the bid has been determined responsive, the bidder must be deemed responsible, as detailed below.
Bidder Responsibility Determination
To be determined responsible, a bidder must be successfully evaluated against the 7 following criteria:
1. Financial Resources.
The bidder must have adequate financial resources to perform the contract, or the ability to obtain them.
2. Performance Schedule.
The bidder must be able to comply with the performance schedule, required or proposed delivery, taking into consideration all existing commercial and governmental business commitments.
3. Performance Record.
The bidder must have have a satisfactory performance history, if any. Nevertheless, a prospective contractor shall not be determined responsible or non-responsible solely because of a lack of relevant performance history, except when specified in a standard for special acquisitions.
4. Integrity and Ethics.
The bidder must have a satisfactory record of integrity and business ethics including satisfactory compliance with laws related to taxes, labor and employment, environment, anti-trust, and consumer protection.
5. Organization and Skills.
6. Equipment and Facilities.
7. Other Qualification.
Bidder Responsibility Determination is also known as: bidder evaluation criteria, contractor responsibility determination, vendor responsibility determination, bidder evaluation worksheet.
Kementerian dan agensi dikehendaki merancang perolehan. Bagi maksud ini jenis item/perolehan hendaklah ditentukan, carta/jadual proses disediakan, peruntukan kewangan disemak, kontraktor/pembekal dan kepala/sub kepala/gred dan kod bidang pendaftaran dikenalpasti dan kajian pasaran dilakukan.
Kementerian dan Jabatan dikehendaki menyediakan spesifikasi tender. Bagi maksud ini, Jawatankuasa Spesifikasi perlu ditubuhkan. Spesifikasi hendaklah secara terperinci bagi memberi gambaran secara jelas kepada petender akan apa yang diperlukan atau yang dikehendaki. Spesifikasi tersebut hendaklah berasarkan kepada fungsi dan performance dengan kepatuhan kepada standard antarabangsa or equivalent boleh dimasukkan ke dalam spesifikasi tersebut.
Spesifikasi yang menjurus kepada sesuatu jenama atau negara ditegah sama sekali. Petender boleh membantah di dalam 14 hari dari tarikh tender diiklankan jika spesifikasi tersebut menjurus kepada sesuatu jenama bagi tender tempatan dan 28 hari bagi tender antarabangsa.
Dokumen Tender dikenakan bayaran dengan harga minima sebanyak RM50. Kandungan Dokumen Tender akan meliputi syarat-syarat dan terma am, spesifikasi, salinan perjanjian, jadual harga, tempoh penghantaran, tempoh bantahan dan skop kerja yang diperlukan.
Setiap tender tempatan yang dikeluarkan hendaklah diiklankan di dalam sekurang-kurangnya sebuah akhbar tempatan bahasa Melayu, bagi tender antarabangsa, iklan tersebut akan diiklankan dalam sekurang-kurangnya dua akhbar tempatan, satu Bahasa Melayu dan satu Bahasa Inggeris serta pemberitahuan juga dihantar kepada Embassy dan High Commission negara-negara yang sesuai dan boleh mengambil bahagian di dalam tender tersebut. Bagi tender yang diuruskan oleh Kementerian Kewangan, iklan tender juga akan dipaparkan di dalam homepage BPPK.
Petender diberi tempoh tidak kurang dari 21 hari untuk mengemukakan tawaran bagi tender tempatan dan tidak kurang dari 56 hari bagi tender antarabangsa.
Jualan Dokumen Tender
Dokumen Tender akan dijual mulai tarikh iklan tender tersebut dibuat didalam akhbar tempatan. Hanya kontraktor/pembekal yang memenuhi syarat-syarat pendaftaran dalam bidang yang berkenaan dibenarkan membeli Dokumen Tender tersebut. Bagi tender antarabangsa, pengecualian diberikan dari syarat-syarat keperluan pendaftaran.
Pembekal/kontraktor tempatan yang telah berdaftar dengan Kementerian Kewangan/Pusat Khidmat Kontraktor dikecualikan dari mengemukakan deposit tender. Bagi tender antarabangsa, petender asing diperlukan mengemukakan deposit tender bernilai antara RM62,500 bagi tawaran kurang dari RM5 juta sehingga deposit bernilai RM1 juta bagi tawaran bernilai RM30 juta bagi tender bekalan dan perkhidmatan. Bagi tender kerja, petender dikehendaki mengemukakan deposit tender bernilai RM50,000 bagi kontrak di bawah RM10 juta sehingga deposit bernilai RM1 juta bagi kontrak kerja bernilai RM100 juta.
Masa Tutup Tender
Agensi mestilah menetapkan jam 12.00 tengahari pada hari tawaran ditutup sebagai waktu akhir untuk menerima dokumen tender daripada petender. Tender lewat tidak boleh diterima.
Jawatankuasa Pembuka Tender
Jawatankuasa Pembuka Tender hendaklah terdiri dari sekurang-kurangnya dua pegawai dimana seorang daripadanya hendaklah pegawai daripada Kumpulan Pengurusan dan Profesional yang dilantik oleh Ketua Jabatan untuk membuka peti tawaran dan tawaran yang diterima.
Bagi tender bekalan dan perkhidmatan, penilaian tender hendaklah dibuat oleh dua (2) Jawatankuasa yang berasingan iaitu Jawatankuasa Penilaian Teknikal dan Jawatankuasa Penilaian Harga. Jawatankuasa Penilaian Teknikal hendaklah terdiri daripada pegawai yang mempunyai kemahiran, pengalaman serta kelayakan mengenai barangan/perkhidmatan tersebut. Bagi penilaian harga, penilaian boleh dibuat oleh Jawatankuasa Penilaian Harga atau oleh Pegawai Penilai yang terdiri daripada pegawai yang mahir serta berpengalaman dalam bidang tersebut. Bagi penilaian tender kerja ianya hendaklah dilakukan oleh satu Jawatankuasa yang dianggotai oleh tidak kurang daripada dua (2) orang pegawai. Salah seorang daripadanya hendaklah terdiri daripada jurukur bahan atau pegawai teknikal dalam bidang berkenaan. Laporan Penilaian hendaklah ditandatangani oleh semua ahli jawatankuasa.
Pemilihan Petender Yang Berjaya
Laporan daripada Jawatankuasa Penilaian Teknikal dan Jawatankuasa Penilaian Harga hendaklah dirangkumkan untuk mendapatkan syor dan perakuan berasaskan tawaran terendah yang dinilai dan boleh diterima (the lowest evaluated and acceptable tender). Pegawai yang memproses tender adalah bertanggungjawab menyediakan perakuan kepada Lembaga Perolehan berdasarkan tender yang paling menguntungkan Kerajaan. Faktor-faktor seperti harga, latar belakang syarikat, tempoh siap/penghantaran, kualiti, rekod-rekod yang lalu hendaklah dijadikan asas pemilihan.
Lembaga Perolehan/Tender Kementerian atau Jabatan adalah diberikuasa menimbang serta menyetujuterima tender sehingga RM50 juta bagi tender kerja dan RM30 juta bagi tender bekalan dan perkhidmatan. Bagi tender yang melebihi had nilai yang dibenarkan atau tender yang keputusannya tidak sebulat suara atau bagi Jabatan-jabatan yang tidak mempunyai Lembaga Perolehan sendiri, perakuan tender hendaklah dikemukakan ke Kementerian Kewangan untuk keputusan muktamad.
Semua tender bagi perolehan bekalan dan perkhidmatan yang bernilai tidak melebihi RM30 juta dan sehingga RM50 juta bagi tender kerja adalah di bawah bidang kuasa Lembaga Perolehan Kementerian atau Jabatan.
Surat Niat akan dikeluarkan kepada petender yang berjaya jika perlu. Surat tersebut boleh mengandungi syarat dan terma tambahan bagi mempastikan kontrak tersebut berjaya dilaksanakan dan bagi memenuhi dasar-dasar dan aspirasi Kerajaan. Surat Niat tidak legally binding. Apabila Surat Niat dikeluarkan, rundingan boleh diadakan dengan petender untuk membincangkan syarat dan terma tambahan atau apa-apa perubahan-perubahan. Keputusan muktamad bagi penerimaan tender adalah berdasarkan kepada rundingan yang berjaya dengan/atau setujuterima syarat dan terma tambahan.
Surat Setuju Terima
Jika tawaran petender diterima tanpa apa-apa perubahan Surat Setujuterima boleh dikeluarkan. Jika Surat Niat dikeluarkan dahulu maka selepas rundingan diadakan dan persetujuan dicapai atas apa-apa perubahan, Surat Setuju Terima hendaklah dikeluarkan. Surat Setuju Terima tersebut hendaklah ditandatangani dan dikembalikan kepada agensi bagi penyediaan kontrak. Surat Setuju Terima merupakan dokumen legal dan ianya merupakan sebahagian daripada kontrak.
Kontrak secara formal akan dibuat selepas diterima Surat Setuju Terima dari petender yang berjaya. Petender tersebut dikehendaki mengemukakan Bon Pelaksanaan daripada bank-bank, institusi kewangan atau syarikat insurans yang menjalankan perniagaan di Malaysia. Nilai Bon Pelaksanaan adalah berdasarkan kepada nilai kontrak seperti berikut:-
2.5% nilai kontrak bagi kontrak bekalan atau perkhidmatan yang bernilai melebihi RM50,000 hingga RM500,000;
5.0% nilai kontrak bagi kontrak bekalan atau perkhidmatan yang melebihi RM500,000; dan
5.0% nilai kontrak bagi kontrak kerja.
Syarat-syarat Penyertaan Tender
Semua Perolehan Kerajaan hendaklah dibuat daripara Kontraktor yang pendaftarannya masih berkuatkuasa. Pihak berkuasa bagi pendaftaran pembekal dalam bidang bekalan dan perkhidmatan ialah Kementerian Kewangan manakala bagi kontraktor kerja ialah Pusat Khidmat Kontraktor (PKK) dan Lembaga Pembangunan Industri Pembinaan Malaysia (LPIPM). Pengecualian hanya dibenarkan bagi perolehan yang tidak melebihi RM10,000 setahun bagi bekalan dan perkhidmatan mengikut AP 184.2(a).
Perbendaharaan akan menguruskan kontrak pusat bagi barangan gunasama dari semasa kesemasa. Semua Jabatan hendaklah menggunakan kontrak pusat apabila membeli barangan gunasama yang terdapat di dalam kontrak pusat yang diuruskan oleh Perbendaharaan, melainkan mendapat pengecualian Perbendaharaan terlebih dahulu.
Terakhir Dikemaskini Selasa, 08 Julai 2008 14:38
1. When a building is being constructed or demolished at a height greater than 75 feet (22.86 m), verify that at least one elevator or personal hoist with an emergency communication system is in place.
2. When a personal hoist requires a jump, verify that all necessary permits are obtained and testing performed.
3. When a building is being constructed or demolished at a height greater than 75 feet (22.86 m), verify that a standpipe system is available and in redlines at all times for use by the Fire Department.
(i) Verify that values are in place at each story below the construction floor.
(ii) Verify that standpipes are connected to a water source and Siamese connection.
(iii) Verify that Siamese hose connections are free from obstruction and are marked by a red light and a sign reading, “Standpipe Siamese Connection.”
(iv) Verify that no breach exists by visually tracing standpipes risers, cross connections and Siamese connections.
4. If a construction shed is located within 30 feet (9.144 m) of the building, verify that the construction shed is constructed of noncombustible materials.
5. Verify that interior and exterior guardrails and toe boards are provided and properly installed to meet the standards described in section 3307.8 of the building code.
6. Verify that all stairwells have standard handrails.
7. Verify that all signs required by section 3301.9 of the building code are installed and contain the required information.
Safety netting inspections
1. Verify that horizontal safety netting is maintained not more than two stories below the stripping operation floor on concrete structures or the uppermost finished and walk able concrete floor is more than six stories or 75 feet (22.86 m) in height above the adjoining ground or adjoining roof level, whichever is applicable.
2. Verify that horizontal safety netting projects outward horizontal from the edge of the floor a minimum of 10 feet (3.048 m).
3. Verify that omitted horizontally safety netting in designated crane and derrick lifting areas is indicated and approved on the crane application and the site safety plan.
4. For steel frame construction, where the steel frame extends more than eight stories above the walk able concrete floor, verify that the vertical safety netting is provided on the floors at and below the topmost working metal deck where this deck is substantially completed and that the required guardrails and toe boards are in place.
5. Verify that vertical safety netting is provided on all floors below the floor on which horizontal netting is required.
6. Verify that vertical safety netting is secured and kept closed at all times, except during actual loading operations or perimeter construction operations.
Maintenance of site and adjacent area inspections.
1. Verify that all areas used by the public are maintained free from ice, snow, grease, debris, equipment, materials, projections, tools, or other items, substance, or conditions that may constitute a slipping, tripping or other hazard.
2. Verify that guards, shields or barricades surround all exposed, electrically charged, moving or otherwise dangerous parts of machines and construction equipment so as to prevent contact with the public.
3. Verify that there are no exposed hose lines, wire, rope, or other items that may constitute a tripping hazard to the public.
4. Verify that adjoining property is protected when the height of the building exceeds that of the adjoining property.
5. When the building is extended, enlarged or increased in height so that any portion of such building, except chimneys or vents, extends higher than the top of any previously constructed chimneys within 100 feet (30.48 m).
1. Verify that floors and stairs are clean from excess debris.
2. Verify that tools and equipment not in use are kept away from edges or openings.
3. Verify that the roof of the side walk shed and the street are free of debris.
4. Verify that sufficient containers for the storage of garbage and debris are provided.
5. Verify that containers are covered and secured when full.
Removal and storage of material inspections
1. Verify that combustible waste material and combustible debris have been removed from the site.
2. Verify that material stored on floors of a building is secured when not being used.
3. When exterior walls are not in place, verify that stored material is kept at least 10 feet (3.048 m) back from the perimeter of the building, or at least 5 feet (1524 mm) back area is less than 1,000 square feet (304.8 m), or at least 2 feet (609.6 mm) back from the perimeter of the building on upper working floors located not more than two stories below the stripping operation on concrete floor on steel structures.
4. Verify that no material hangs over the edge of a building unless banded and braced for relocation by the end of the workday, except on the floor of the stripping operation and on floors designated as the lumber or steel mill.
(i) On floor of the stripping operation, verify that material that overhangs the floor is banded and braced, overhangs by not more than one-third of its length, and is relocated by next workday for concrete operations.
(ii) Where the steel mill and lumber mill are located, verify that any material that overhangs is relocated by the next workday.
Protection of sidewalk inspections
1. Verify that valid permits for sidewalk sheds have been obtained, have not expired, and are posted in central, visible area.
2. Verify that approved drawings of the sidewalk shed are at the construction site.
3. Verify that sidewalk sheds extend the entire perimeter of the building.
4. Verify that when the building exceeds 100 feet (30.48 m) in height, the sidewalk sheds extend 20 feet (6.096 m) beyond the property line.
5. Verify that required sidewalk sheds remain in place until the structure is enclosed, all exterior work completed, the sash is gazed above the second story, the exterior façade is cleaned down, all outside handling of material equipment and machinery is completed, and dismantling of a hoist, crane, or the use of a derrick in their removal above the second story has been completed.
6. Verify that all openings in sidewalk sheds, fences and railings for loading purposes are kept closed, barricaded, protected, or guarded at all times.
7. Verify that sidewalk sheds are illuminated at night by the equivalent of 100-watt bulbs spaced 15 feet (4.572 m) apart at a minimum height of 8 feet (2.44 m) above the sidewalk.
8. Verify that temporary footbridges and walkways for the public are at least 5 feet (1.524 m) in width.
Warning signs and lights inspections
1. Verify that all areas that are dangerous or hazardous to the public or areas where work is performed to the public or areas where work is performed near vehicular traffic are appropriately marked with warning signs and lights.
2. Verify that steps necessary to protect the public are taken, including provisions for flagmen/flag women whenever intermittent operations are conducted on or across areas open to the public or when dangerous operations, such as blasting, may affect such areas.
Scaffolds, structural ramps, runways and platform inspections
1. Verify that where they pose a risk to the public that all structural ramps, scaffolds, runways and platforms are provided with guardrails, toe boards, screening, or nets, unless otherwise specified by the building code.
Material handling and hoisting equipment inspections
1. Verify that all certificates of approval, operation, and onsite inspection for all cranes, derricks, and cableways have been obtained and are available for inspection at construction site.
2. Verify that all permits for highway and street closing are available for inspection at construction site.
3. Verify that licenses of crane operators are available at the construction site.
4. When a crane is to be jumped, verify that it is in accordance with the schedule submitted by the professional engineer and approved by the department.
5. Verify that a means of communication exists between the responsible parties when the operator of hoisting machinery has no vision of the lift or loading areas.
6. Verify that a program has been established and is operational for the control of pedestrian and vehicular traffic around the construction site during all lifting and hoisting operations.
7. Verify that flagman/women are present to stop pedestrian and vehicular traffic during the following intermittent operations:
(i) During all lifting and hoisting operations;
(ii) When trucks enter and exit the site;
(iii) When dangerous operations e.g. blasting, occur;
(iv) When the sidewalk and street is temporarily closed.
• Kumpulan Reka bentuk
- Jurutera Stuktur dan Sivil
- Jurutera Mekanikal dan Elektrikal
- Juruukur Bahan
- Arkitek Dalaman
- Arkitek Lanskap
- Pengurus Projek
- Dan lain-lain seumpamanya.
• Kumpulan Pembinaan
- Sub-Kontraktor dan Pembekal
- Sub-Kontraktor dan Pembekal Dinamakan
- Kerani Tapak
- Dan lain-lain seumpamanya.
ATUR CARA KONTRAK
Atur cara kontrak bagi perlaksanaan sesuatu projek adalah kaitan penglibatan antara pihak-pihak dalam projek binaan. Rangkaian penglibatan mereka menentukan peranan, fungsi, hubungan kontrak dan kewajipan setiap pihak. Antara faktor-faktor yang perlu dipertimbangkan semasa memilih kaedah atau atur cara tertentu : ruang lingkup kerja, keadaan tapak, tahap teknologi pembinaan, tempoh projek, kemudahan sumber tenaga mahir dan bahan, keadaan ekonomi, kedudukan kewangan majikan, sama ada majikan atau kontraktor yang lebih bersedia menanggung risiko-risiko tertentu.
Perbezaan utama antara jenis-jenis atur cara kontrak boleh digolongkan mengikut :
a) Cara kontraktor menerima bayaran – secara harga tetap atau bayar ganti kos.
b) Takat obligasi kontraktor di dalam sesuatu kontrak – membina sahaja atau membina dan mereka bentuk sekali, atau hanya mengurus pembinaan sahaja.
Suatu jenis atur cara kontrak tidak semestinya tersendiri, ia mungkin terdiri dari gabungan cirri-ciri lebih dari satu jenis prinsip atur cara kontrak. Sebagai contoh, mungkin terdapat kontrak jumlah pukal yang menggunakan atur cara kontrak tradisional; atau atur cara reka bentuk dan bina.
Dengan perkembangan semasa industri binaan, timbul kepelbagaian atur cara yang khusus untuk sesuatu projek, yang berdasarkan prinsip-prinsip jenis-jenis utama yang disebut di atas. Contoh-contoh tersebut termasuk atur cara ‘Turnkey‘ dan ‘Build-Operate-Transfer’.
Cara Kontraktor Menerima Bayaran
Harga kontrak ialah amaun yang dipersetuju oleh majikan/klien untuk dibayar kepada kontraktor bagi perlaksanaan kerja. Harga kontrak ini dinyatakan dalam dokumen kontrak.
Cara kontraktor menerima bayaran secara :
a) Harga tetap, dalam bentuk
- Jumlah pukal, mengguna senarai bahan atau lukisan dan spesifikasi.
- Pengukuran, mengguna jadual kadar harga.
b) Bayar ganti kos, dalam bentuk
- Kos sebenar ditambah peratusan.
- Kos sebenar ditambah yuran tetap.
- Kos sasaran.
Kontrak Harga Tetap
Dalam kontrak harga tetap kontraktor menyebut harga bagi keseluruhan kerja dan harga ini tidak mengambil kira turun-naik harga (bahan atau buruh) semasa tempoh perlaksanaan. Jika terdapat peruntukan bagi turun-naik harga, ia disebut sebagai kontrak berserta harga turun-naik. Jumlah harga kontrak didapati dari anggaran yang telah diberi oleh kontraktor dan ini dinyatakan di dalam dokumen perjanjian. Majikan/klien akan membayar kontraktor harga kontrak tersebut, sama ada ianya adalah kos sebenar yang akan ditanggung oleh kontraktor atau tidak. Maka, apa-apa perbelanjaan terlebih menjadi kerugian kepada kontraktor – risiko ditanggung oleh kontraktor.
Kontrak harga tetap boleh diberi secara :
• Jumlah pukal, mengguna Senarai Bahan atau Lukisan dan Spesifikasi.
• Pengukuran, mengguna jadual kadar harga harga yang telah dipersetuju.
Dalam kontrak jumlah pukal, harga kontrak telah ditetapkan bagi kerja yang akan dilaksanakan dan ianya dimasukkan ke dalam perjanjian. Kebanyakan kontrak binaan adalah jenis kontrak jumlah pukal walaupun mungkin terdapat peruntukan bagi turun-naik harga dan perubahan kerja.
Penggunaan kontrak jumlah pukal yang mengguna dokumen-dokumen bergantung kepada kecukupan maklumat yang ada mengenai ruang lingkup kerja pada masa memanggil tender atau memasuki kontrak. Dokumen seperti senarai bahan dan lukisan dan spesifikasi lazimnya diguna di mana tahap kerja dapat dipasti dengan tepat dan dokumen-dokumen dapat disiapkan dalam masa-masa tersebut.
• Bagi atur cara mengguna senarai bahan, kuantiti yang terukur menjadi sebahagian bari kontrak dan dianggap sebagai ukuran tepat kerja-kerja yang hendak dilaksanakan. Melalui cara ini kontraktor dapat mengetahui dengan lebih tepat skop kerjanya.
Kebiasaan borong kontrak binaan memperuntukkan supaya segala kesilapan dalam pengukuran kuantiti yang dijumpai semasa perlaksanaan kontrak hendaklah dibetulkan oleh arkitek/penyelia, bagi pihak majikan, dan kontraktor berhak menuntut kos yang telah diselaraskan itu. Kadar harga yang diletakkan oleh kontraktor bagi setiap item kerja terukur menjadi asas pengiraan jumlah harga kontrak.
(Rujuk kes : Bryant & Son Ltd lwn Birmingham Hospital Saturday Fund 1938)
• Dalam atur cara mengguna lukisan dan spesifikasi, segala bahagian kerja yang penting dan jelas perlu untuk sesuatu bangunan disifatkan tersedia masuk dalam ruang lingkup obligasi kontraktor dalam melaksanakan dan menyiapkan kerja.
Jika sesuatu butir kerja tertinggal atau tidak ditunjuk di dalam dokumen tetapi ianya adalah jelas penting dan perlu (indispensably necessary), kerja tersebut tidak dianggap sebagai item tambahan, maka kontraktor tidak berhak mendapatkan bayaran tambahan bagi melaksanakannya – rujuk kes Williams lwn Fitzmaurice 1858.
Dalam kes Cheng Keng Hong lwn Govt. of Federation of Malaysia 1966, mengenai kontrak berdasarkan lukisan dan spesifikasi, terdapat percanggahan di antara spesifikasi untuk peralatan elektrik dan lukisan susun atur pemasangan elekttrik. Diputuskan bahawa kontraktor disifatkan telah memauskan sekali harga peralatan elektrik ke dalam harga tendernya.
Dokumen jenis ini tidak mengandungi item-item kerja terukur dan harga yang disebutkan oleh kontraktor dalam jadual kadar harga digunakan untuk menghargakan kerja-kerja perubahan. Kontraktor menghargakan kerja-kerja perubahan. Kontraktor terpaksa membuat pengukurannya sendiri untuk mendapatakan anggaran.
Jumlah harga kontrak ditetapkan selepas penyiapan kerja dengan mengukur dan menilai kerja berpandukan jadual kadar harga yang telah dipersetuju. Jadual kadar mungkin menyerupai senarai bahan tetapi tanpa kuantiti. Kontrak jenis ini lazimnya digunakan di mana tahap kerja tidak dapat dipastikan dengan tepat semasa memanggil tender atau memasuki kontrak.
Kontrak jenis pengukuran ini digolongkan sebagai kontrak harga tetap kerana kadar harga setiap item kerja telah ditetapkan dahulu dan dipersetuju, hanya jumlah kontrak ditentukan selepas penyelesaian kerja dan bukan pada permulaan kerja seperti jumlah pukal.
Bayar Ganti Kos
Dalam kontrak jenis bayar ganti kos, kontraktor dibayar segala perbelanjaannya dan ditambah sejumlah wang sebagai yuran.
Kontraktor dibayar berasaskan kos sebenar kerja-kerja pembinaan, ditambah peratusan (di atas kos sebenar) atau yuran tetap untuk caj overhed dan keuntungan. Dalam atur cara bayar ganti kos, majikan menanggung risiko perbezaan antara harga akhir sebenar dan anggaran, sama ada penjimatan atau pembayaran kos yang lebih.
Harga kontrak didapati dengan menghitung kos buruh, bahan-bahan dan jentera, ditambah peratusan atau yuran tetap untuk caj overhed (belanja yang diperlukan untuk pengendalian projek) dan keuntungan. Adalah penting untuk menetapkan dari awal apa yang termasuk dalam "kos" kontraktor. Perhatian bahawa dalam kontrak pengukuran, harga yang disebut oleh kontraktor dan yang telah dipersetujui.
Satu cara alternatif ialah dengan mengguna kos sasaran, di mana, anggaran kos sasaran awal dibuat dan setelah kerja siap, perbezaan di antara kos sasaran dan kos sebenar diagihkan antara majikan dan kontraktor mengikut agihan yang telah dipersetujui.
Kekurangan kontrak bayar ganti kos : majikan tidak dapat mengetahui dengan pasti pada peringkat awal perbelanjaan yang akan ditanggung kelak dan kontraktor kurang insentif untuk mengawal kos. Walau bagaimanapun, kontrak yang mempunyai insenitf berpatutan boleh membawa kepada penjimatan masa dan kos.
Keadaan di mana kontrak bayar ganti kos adalah bersesuaian : skop kerja tidak dapat dipastikan, permulaan dan penyiapan kerja yang awal dikehendaki, perubahan pada reka bentuk yang banyak dijangka, kaedah atau atur cara pembinaan yang kompleks dan berinovatif di mana atur cara tradisional tidak memadai, telah wujud hubungan khas di antara majikan dan kontraktor dan objektif utama adalah kualiti dan masa pembinaan.
Takat Obligasi Kontraktor di dalam Sesuatu Kontrak
Secara am, takat penglibatan atau obligasi kontraktor di bawah sesuatu kontrak, bergantung sama ada ianya :
I. Kontrak tradisional, obligasi untuk membina sahaja.
II. Kontrak reka bentuk dan bina, obligasi untuk mereka bentuk dan membina sekali.
III. Kontrak pengurusan, obligasi untuk mengurus sahaja.
Di dalam atur cara kontrak tradisional perunding reka bentuk menyediakan reka bentuk bangunan ; sememtara kontraktor hanya dikehendaki “ membina sahaja “ menurut apa yang ternyata di dalam dokumen kontrak. Jika bangunan tersebut gagal atau runtuh berpunca dari mutu kerja dan bahan-bahan yang tidak sempurna, majikan akan membawa tindakan terhadap kontraktor ; jika berpunca dari kecuaian reka bentuk, tindakan terhadap pereka bentuk. Dalam atur cara ini, tanggungjawab bagi kegagalan bangunan teragih pada berbagai pihak.
Keberkesanan atur cara ini bergantung kepada reka bentuk serta lukisan-lukisan yang telah lengkap semasa menender dan penggunaan borang-borang perjanjian yang difahami kerana tidak realistik untuk meminta kontraktor menyebut jumlah harga pukal bagi kerja-kerja yang belum dapat dipasti dengan tepat atau yang kompleks dan berinovatif. Walau bagaimanapun, atur cara kontrak tradisional ini telah lama digunakan dan telah menjayakan berbagai projek-projek bangunan dan kejuruteraan sivil.
Antara kekurangan yang biasa diperkatakan : kemahiran kontraktor tidak dapat digunakan pada peringkat yang lebih awal atau dengan lebih berminat menyediakan reka bentuk dari mengurus projek.
Mana-mana kontraktor yang berfikir dia mampu melaksanakan projek yang dicadangkan boleh memasuki tender. Cara ini dianggap membazir, tetapi majikan boleh menghadkan jumlah penender dengan meletakkan syarat-syarat seperti kelas dan jenis kerja kontraktor. Kaedah ini member tender. Secara teori, kaedah ini patut mendapatkan harga yang kompetitif dan terrendah, tetapi keupayaan kontraktor tersebut mungkin disangsi. Kontraktor yang kurang pengalaman mungkin tidak menyedari risiko kontrak dan menender dengan harga yang rendah. Bagaimanapun majikan tidak terikat untuk memilih tender yang terendah sekali. Lazimnya, untuk memanggil tender secara terbuka, tender diiklankan di surat khabar. Kaedah ini sering digunakan untuk projek-projek kerajaan bagi memenuhi ketanggungjawaban awam.
Hanya kontraktor yang memenuhi kriteria-keriteria tertentu dijemput untuk menender. Kaedah ini boleh mendapatkan harga terendah dari kontraktor-kontraktor yang setanding. Kontraktor–kontraktor dijemput dari senarai yang telah dikumpulkan oleh majikan/klien atau perunding profesional.
Kaedah ini membabitkan rundingan terus antara majikan/klien atau wakilnya dan satu atau beberapa kontraktor. Kaedah ini digunakan dalam keadaan di mana telah wujud hubungan perniagaan di antara dalam keadaan di mana telah wujud hubungan perniagan di antara majikan dan kontraktor mempunyai keupayaan khas, kualiti yang tinggi, perlu memulakan dan menyiapkan kerja dengan cepat, atau kontraktor diperlukan member input reka bentuk. Oleh sebab kaedah ini tidak ada atau kurang pertandingan, harga kontraktor mungkin lebih tinggi dari yang boleh diperolehi melalui kaedah ini.
Majikan/klien yang mempunyai program binaan yang berterusan boleh menggunakan cara kontrak bersiri dengan satu kontraktor. Kontraktor akan meneder untuk suatu projek dan sekiranya prestasinya memuaskan, dia akan memdapat kontraktor-kontraktor lain yang serupa jenis. Kesinambungan kerja dapat mengurangkan kos menender, kontraktor sudah faham kehendak majikan, kerja lebih efisyen dan mungkin harga yang lebih rendah.
Majikan/klien mungkin menghendakkan pelbagai kerja dilaksanakan bagi suatu tempoh tertentu. Dalam keadaan ini, kontraktor dipilih untuk melaksanakan semua kerja yang dikenal pasti bagi sesuatu tempoh mengikut jadual kadar harga yang tetap untuk dijangka masa tertentu. Apabila majikan memerlukan kerja dilaksanakan, dia akan mengeluarkan arahan-arahan dan dia dapat mengganggarkan kos yang penyelenggaran. Kontraktor akan melaksanakan semua jenis kerja penyenggaraan yang dihuraikan berpanduan jadual kadar harga yang telah dipersetuju.
Ini adalah satu kepelbagaian dari kaedah sedia ada. Dalam kaedah ini berbagai-bagai bahagian kerja dalam satu projek itu dilaksanakan secara bertindih. Pakej-pakej kerja dikenal pasti sebagai kontrak berasingan dan bermula mengikut fasa-fasa yang ditetapkan. Lukisan atau butir reka bentuk untuk keseluruhan kerja mungkin belum lengkap sepenuhnya semasa memulakan projek. Bahagian-bahagian dilaksanakan berperingkat dan berdindih. Kaedah ini dapat memendekkan tempoh penyiapan keseruluhan projek dan boleh menjimatkan kos.
Terima kasih kepada En. WONG CHUN SIANG