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1 INTRODUCTION
The conditions of contract define the terms under which the works are to be executed and maintained and set forth the obligations and liabilities of the parties to the contract. The powers of the Architect, the terms of payment and the manner in which a dispute under the contract is to be settled are a few of the many aspects covered by these conditions. Conditions of contract of various forms are used in the execution of building works. In Singapore the form used is the Singapore Institute of Architects (SIA) Conditions of Contract for private sector projects and the Public Sector Standard Conditions of Contract (PSSCOC) for public sector projects. Other conditions of contract are: (a) FIDIC (International Federation of Consulting Engineers) - widely used international forms of contract for large civil engineering projects. (b) ICE (Institution of Civil Engineers) - used in large piling and civil engineering contracts
The Articles and Conditions of Building Contract (Measurement) will be discussed in the
following sections. They are grouped under: i) ii) iii) iv) Power of the Architect and Employer Obligations of the Architect and Employer Obligations of the Contractor Dispute
PROJECT MANAGEMENT TOPIC 5: SIA CONDITIONS OF CONTRACT 5.3 POWER OF THE ARCHITECT and EMPLOYER
5.3.1 DIRECTIONS AND INSTRUCTIONS (Clause 1) 5.3.1.1 Written or Verbal Directions and Instructions (Clause 1.1) The Contractor has to comply with all written Architects directions and instructions. If verbal orders are given then: a) The Contractor can request the Architect to confirm the verbal orders in writing. b) Such verbal orders are also deemed as written provided: i) Contractor confirms such orders to the Architect in writing within 14 days of order, and ii) the Architect does not dissent from or withdraw the order within 14 days from receipt of the Contractor's written confirmation. However, if the Architect withdraws the order within 14 days from the receipt of written confirmation, the Contractor shall be compensated for any expense reasonably incurred. 5.3.1.2 Clerk-of-Works Directions and Instructions (Clause 1.1) A Clerk-of-Works directions and instructions have no legal effect unless: a) b) confirmed in writing by the Architect, or confirmed by the Contractor to the Architect and if not dissented from in writing within 14 days from receipt of the Contractor's confirmation.
Without such validation, the Contractor may not be entitled to compensation by such compliance. 5.3.1.3 Architect's Directions and Instructions (Clause 1.2) Orders given by the Architect shall be expressed as either Directions or Instructions. The difference between an Architect's direction and Architects instruction is: An Architect's direction does not entitle the Contractor to additional payment or compensation but may result in reduction in the Contract Sum. Whereas, an Architects instruction can entitle the Contractor to additional payment or compensation but may also result in reduction in the Contract Sum as the case may be.
To secure compliance by Contractor with existing contract obligations. To secure reasonably safe and proper methods of working or temporary works. To ensure properly constructed permanent works. To vary permanent work, temporary work or methods of working: i) at Contractor's request e.g. to overcome difficulties or avoid excessive costs ii) as a consequence of defective work or other default or breach of contract.
b) c) d)
e)
To suspend or postpone work for investigations due to defective work or any other default or breach of contract where insistence upon removal and rebuilding would involve unreasonable expense or delay or prejudice permanent works. f) To alter a previous direction.
5.3.1.5 Principal Instructions (1.4) Principal instructions are issued under the following circumstances: a) b) c) To vary permanent works where desired by Architect or Employer or required authorities or bye-laws To vary temporary works or methods of working where desired by the Architect or Employer or authorities To suspend or postpone to carry out investigations desired by Architect or Employer which is not at a consequence of any defective work or default of the Contractor. To carry out work/supply goods by Nominated Sub-contractor provided for under the PC Sums or Items To carry out work/supply goods by the Contractor or Nominated Subcontractor provided for under the Contingency or Provisional Sums or Items To alter or vary any previous instruction
d) e)
f)
If the Contractor does not do the above within the 28 days, the Contractor is deemed to have undertaken to comply without increase in Contract Sum. 5.3.1.7 Remedy on Non-compliance by Contractor (Clause 1.7) If the Contractor fails to carry out a direction or instruction, the Architect can issue a written notice to instruct the Contractor to comply. If the Contractor still fails to comply within 7 days of his notice, the Employer can employ others to do the work and a) b) deduct costs from the Contractor based on Architect's "Certificate of Cost of Other Contractor's Work" not deduct costs if the direction is unjustified or should have been an instruction.
5.3.1.8 Compensation to Contractor (Clause 1.8) If an Architect's written direction or instruction is subsequently shown to be unjustified or not within his power to issue and the Contractor has complied, then the Contractor can claim compensation for costs and extension of time as appropriate. 5.3.2 METHODS OF WORKING & TEMPORARY WORKS (Clause 2) 5.3.2.1 Contractor's Principal Responsibility (Clause 2.1) Unless specified otherwise, the Contractor has the sole right and responsibility on control of the site, choice of methods of workings and temporary works. 5.3.2.2 Architect's Power to Order Change (Clause 2.2) The Architect can give directions requiring changes in methods of working and temporary works. 5.3.2.3 Indemnity to Contractor (Clause 2.3) The Employer shall indemnify the Contractor against any accident, loss, damage, etc. which occurs due to methods of working or temporary works ordered by Architect
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During the construction stage, the programme can be used by the Contractor to plan his resources and order materials and be used by the Architect/site staff to monitor the progress on site. 5.3.3.3 Disapproval (Clause 4.3) If the Architect does not approve the programme, the Contractor shall not be prevented from starting work provided that the programme submitted is sufficiently detailed.
5.3.9.3 Completion (Clause 24.4) It is the stage of the contract at which in the opinion of the Architect, the works are complete and have been carried out in accordance with the contract document and Architects directions and instructions. The Architect may at his discretion issue the Completion Certificate if any outstanding minor works can be completed without unreasonable disturbance of the Employers full enjoyment and occupation. The certificate shall attach a record of such outstanding works for the Contractor to complete within a specified time.
AND
NOMINATED
SUB-CONTRACTORS
AND
Designated and Nominated Subcontractors are those selected by the Architect on behalf of the Employer but employed by and under the control of the Contractor.
5.3.11 NOMINATION AND RIGHT OF OBJECTION (Clause 29) After the selection of a Subcontractor/Supplier, the Architect issues a Nomination Instruction to the Contractor. The Contractor will then enter into a subcontract with the selected Subcontractor. The Contractor has the right to object to a Nomination Instruction on certain grounds: a) Doubts on the financial standing or technical competence or reliability of the selected Sub-contractor; b) Sub-contractor who is not prepared to undertake towards the Contractor such obligations and liabilities as will enable the Contractor to discharge his duties to the Employer under the terms of the Contract. If the Contractor is not obliged to enter into a sub-contract on the above grounds it is open to the Architect to act as follows: a) Nominate an alternative Sub-contractor. b) Instruct the Contractor himself to carry out the work and/or supply the materials or goods. c) Instruct the Contractor to enter into the sub-contract in which event the employer will guarantee the Contractor against any loss incurred by the Contractor arising as a direct result of the matters validly objected by him. d) Direct the Contractor to enter into a sub-contract and at the same time, among other things relieve the Contractor from the discharge of his obligations and liabilities to the extent the sub-contract terms specified by the Architect are inconsistent with the discharge of the Contract.
5.3.12.3 Grounds of Termination for Default (Clause 32.3) The Contractor's employment can be terminated on the following grounds: The Contractor a) failed or refused to submit sufficiently detailed programme or Make-up Prices (1 month). b) assigned principal functions or right to receive monies without consent c) failed or refused to remove a Subcontractor who has been objected to from site (1 month) d) suspended work without justification or fail to proceed with diligence (1 month) e) failed to comply with instructions to remove or replace any works/goods (14 days) f) removed plant, goods, materials from site without consent and failed to return them after notice (14 days) g) complied with an earlier instruction to resume work and again suspended work or failed to proceed with due diligence. h) failed or refused to comply written directions /instructions (1 month) 5.3.12.4 Termination on Insolvency etc. (Clause 32.7) Automatic termination when the Contractor becomes a bankrupt or insolvent or any winding up order is made or receiver is appointed, etc. Contractor has to vacate site within 14 days of notice.
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PROJECT MANAGEMENT TOPIC 5: SIA CONDITIONS OF CONTRACT 5.4 OBLIGATIONS OF THE ARCHITECT and EMPLOYER
5.4.1 DESIGN RESPONSIBILITIES (Clause 3) 5.3.3.1 Responsibilities (Clause 3.1) If the design and specification of the Works is provided by the Architect, the Contractor's responsibility is to complete the Works satisfactorily complying with all requirements. He is not responsible for the design or suitability for the purpose. However, if the Contract requires some design to be carried out by the Contractor and/or Sub-contractors, the Contractor will be responsible for these designs. 5.3.3.2 Architect to Supply Information (Clause 3.2) If any additional drawings, details or amendments to the drawings need to be supplied to the Contractor, the Architect has to supply them within a reasonable time taking into account: a) b) c) d) e) Contractor's programme which the Architect has approved Actual rate of progress of the Contractor Contract Date for Completion or Extended date Reasonable pre-planning period for the Contractor Request from Contractor
For variations, information must be provided to the Contractor within reasonable time. 5.4.2 ADMINISTRATION (Clause 6) 5.4.2.1 Documents (Clauses 6.4 to 6.9) Upon award of contract, the Architect has to issue without charge to the Contractor: a) b) c) d) One copy of the certified Articles of Agreement, of the Conditions of Contract and of the Contract Documents Two copies of the Specification Two sets of contract drawings Two copies of the unpaired Bills of Quantities and (if requested by the Contractor) one copy of priced Bills.
During the contract period, if the Architect is required to issue additional information or drawings to the Contractor, two copies are to be issued. Where two copies of documents are issued the Contractor shall keep on site one copy. These documents must be available to the Architect or his representative for reference at all times. When all outstanding matters between Employer and Contractor are settled, all drawings, details, etc. bearing Architect's name should be returned to the Architect if
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5.4.8
PAYMENT OF CONTRACTOR AND INTERIM CERTIFICATES (Clause 31) The Contractor shall be entitled to progress payment for the Work carried out. The Contractor shall serve on the Employer a payment claim based on periodic valuation. Within 14 days after receipt of payment claim, the Architect shall issue an Interim Certificate for payment to Contractor. Within 21 days after the payment claim is served on the Employer by the contractor, the Employer shall respond to the payment claim, a payment response to the Contractor who shall be entitled to payment of any sum stated. The Contractor will be paid progress payment on the date immediately upon the expiry of 35 days after the date the tax invoice is submitted to the Employer or the date on which the payment response is required. Before the end of the Maintenance Period the Contractor is to submit the Final Claims Documents. The submission shall contain details of: Quantities Rates Prices Any adjustment to Contract Sum Additional payment or compensation claimed
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5.5.4
ASSIGNMENT AND SUB-CONTRACTING (Clause 15) 5.5.4.1 Assignment by Contractor (Clause 15.1) Contractor shall not assign to others nor shall receivers and liquidators be entitled to carry out their functions without prior consent of the Employer with regards to the following: a) Principal functions of controlling site, his staff, co-ordination of Subcontractors, ordering of materials. b) Right to receive monies due under the Contract. 5.5.4.2 Sub-contractors (Clause 15. 2) If a Contractor wants to engage a sub-contractor which is not provided for in the Contract, he must obtain the consent of the Architect. The Architect shall not withhold consent if sub-contractor is suitably qualified for the relevant works 5.5.4.3 Responsibility of Sub-contractors (Clause 15.3) Unless otherwise stated in the contract, the Contractor shall be responsible for the actions and works of all sub-contractors (designated or nominated).
5.5.5
PLANT AND MATERIALS (Clause 16) All plant, temporary buildings and materials brought onto the Site by the Contractor shall, until completion of the Works, be deemed to be the property of the Employer and shall not be removed without the consent in writing of the Architect.
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5.5.7
5.5.8
5.5.9
5.5.10 TIME FOR COMPLETION (Clause 22) The Contractor is to complete works on or before: a) Date of completion or b) Modified date of completion 5.5.11 MAINTENANCE FOLLOWING COMPLETION (Clause 27) 5.3.24.1 Maintenance Period (Clause 27.1) The Maintenance Period is stated in the Appendix (normally 12 months). It commences upon issue of "Completion Certificate". 5.3.24.2 Maintenance Certificate (Clause 27.5) The Architect issues the Maintenance Certificate when the Contractor has completed all the defects notified to him. 5.5.12 PAYMENT OF NOMINATED SUB-CONTRACTORS AND SUPPLIERS (Clause 30) 5.3.27.1 Certification and Payment (Clause 30.1 & 30.2) Interim Certificate: Interim certificates are issued by the Architect to the Employer and must indicate the amount due to the Contractor including amounts due to the Subcontractors. The
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5.6 DISPUTE
5.6.1 ARBITRATION (Clause 37) Any dispute between the Employer and the Contractor shall be referred for arbitration and final decision of a person to be agreed by the parties. 5.6.2 MEDIATION CLAUSE (Clause 38) Upon the agreement of both the Employer and the Contractor, they may be referred their dispute for mediation under the Mediation Rules of the SIA.
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