BCM643 Contract Management UITM Assignment Sample Malaysia

The BCM643 Contract Management for Construction Projects course at UITM focuses on providing students with essential knowledge and skills in effectively administering and managing construction projects. With a particular emphasis on the legal aspects surrounding project management, the BCM643  course aims to equip students with a comprehensive understanding of the rights and obligations of contracting parties in the construction industry.

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Assignment Activity 1 :- Assess various clauses and related contractual issues under standard forms of contracts commonly used in Malaysia

To assess various clauses and related contractual issues under standard forms of contracts commonly used in Malaysia, let’s focus on some key aspects of a typical construction contract. In Malaysia, the PAM (Pertubuhan Akitek Malaysia) Standard Form of Building Contract is widely used. Here’s an analysis of some important clauses and contractual issues:

Parties and Recitals:

• Identify the contracting parties, including the client and the contractor.
• Examine the recitals to understand the background and purpose of the contract.

Scope of Work:

• Review the contract to ascertain a clear and detailed description of the project scope.
• Check for any ambiguities or omissions that might lead to disputes later.

Contract Price and Payment Terms:

• Evaluate the mechanism for determining the contract price.
• Examine payment terms, including milestones, progress payments, and final payment provisions.
• Assess any provisions related to variations and their impact on the contract price.

Time for Completion:

• Analyze the stipulated time for completion and any provisions for extensions of time.
• Consider the implications of delays and the associated remedies or liquidated damages.

Contract Administration:

• Examine the roles and responsibilities of the contract administrator, usually the architect or the contract administrator appointed by the client.
• Review procedures for issuing instructions, variations, and certificates.

Insurance and Indemnity:

• Assess the insurance requirements for the project, including liabilities and professional indemnity.
• Identify any obligations for the contractor to indemnify the client against specific risks.

Dispute Resolution:

• Analyze the dispute resolution mechanisms, such as arbitration or adjudication.
• Review any clauses related to amicable dispute resolution or negotiations.

Suspension and Termination:

• Examine conditions under which either party can suspend or terminate the contract.
• Assess the consequences and procedures for suspension or termination.

Performance Guarantees and Bonds:

• Identify any requirements for performance bonds or guarantees.
• Review the conditions under which these may be called upon and the process for their release.

Force Majeure and Events Beyond Control:

• Analyze the force majeure clause and events beyond control that might affect contract performance.
• Consider the rights and obligations of both parties in such situations.

Governing Law and Jurisdiction:

• Determine the governing law of the contract.
• Examine the jurisdiction for dispute resolution, especially if international parties are involved.

Remember, it’s crucial to read the specific terms and conditions of the contract thoroughly and seek legal advice if needed. This analysis provides a broad overview, but the interpretation of clauses can vary based on the specific wording in the contract.

Assignment Activity 2:- Comprehend various issues in relation to claims, completion and conclusion of construction contract including dispute resolution

To comprehend various issues in relation to claims, completion, and conclusion of a construction contract, including dispute resolution, it’s important to delve into specific aspects of the construction process. Let’s break down these issues:

Claims Management:

• Identification of Claims: Understand the process for identifying and documenting claims, including variations, delays, and additional costs.
• Notice Requirements: Examine the contract provisions regarding the timely notification of claims, specifying the required form and content.
• Evaluation of Claims: Assess the mechanisms for evaluating the validity and legitimacy of claims, involving contract administrators, quantity surveyors, or independent experts.

Completion of Construction:

• Practical Completion: Understand the criteria and conditions for achieving practical completion, indicating that the construction work is finished.
• Defects Liability Period: Examine the provisions related to the defects liability period and the rectification of any defects identified during this period.
• Final Completion: Evaluate the steps and criteria for achieving final completion, marking the formal end of the contract.

Final Account and Payment:

• Final Account Procedure: Understand the process for preparing and agreeing on the final account, including the resolution of outstanding issues.
• Retention Release: Examine conditions for the release of retention sums and any final payments owed to the contractor.
• Certification of Completion: Assess the role of the contract administrator in certifying the completion of the works.

Dispute Resolution:

• Negotiation and Amicable Settlement: Examine any contractual provisions encouraging negotiation and amicable resolution of disputes before formal proceedings.
• Mediation: Evaluate the role of mediation in resolving disputes, including the appointment of a mediator and the process involved.
• Arbitration: Understand the arbitration provisions, including the appointment of arbitrators, the arbitration process, and the enforcement of arbitration awards.
• Litigation: Consider the circumstances under which litigation might be pursued and the associated procedures.

Liquidated Damages and Delay Claims:

• Liquidated Damages: Evaluate the provisions related to liquidated damages for delays and the conditions under which they can be applied.
• Delay Analysis: Understand the methodologies for analyzing and substantiating delay claims, including critical path analysis and forensic scheduling.

Force Majeure and Frustration:

• Force Majeure Events: Examine the force majeure clause and its application to events beyond the control of the parties.
• Frustration: Understand the concept of frustration and its implications for the termination of the contract in exceptional circumstances.

Post-Completion Obligations:

• Post-Completion Defects: Address any contractual obligations related to defects that may arise after completion.
• Warranty Periods: Evaluate provisions specifying warranty periods for various aspects of the completed work.

Record Keeping and Documentation:

• Documentation Requirements: Assess the contractual requirements for maintaining records and documentation throughout the construction process.
• Audit and Verification: Understand the rights of the parties to audit and verify claims and supporting documentation.

Understanding and addressing these issues comprehensively will contribute to the effective management, completion, and conclusion of construction contracts, reducing the likelihood of disputes and facilitating a smoother handover process.

Assignment Activity 3:- Defend rights of construction parties on contract related issues.

Defending the rights of construction parties involves ensuring that the contractual rights and obligations of each party are upheld throughout the duration of the construction project. Here’s an overview of key rights for different parties involved in a construction contract:

Contractor’s Rights:

• Right to Payment: Contractors have the right to receive timely and full payment for work performed, including variations and additional work.
• Right to Variations: Contractors are entitled to be compensated for any approved variations to the original scope of work.
• Right to Extension of Time: If delays occur due to factors beyond the contractor’s control, they have the right to request and, if justified, be granted an extension of time.
• Right to Practical Completion: Contractors have the right to achieve practical completion and, subsequently, final completion, triggering the release of retention and final payments.

Client’s Rights:

• Right to Quality Work: Clients have the right to expect that the work performed meets the agreed-upon quality standards.
• Right to Withhold Payment for Defects: Clients may have the right to withhold payment if there are defects or incomplete work, subject to contract provisions.
• Right to Liquidated Damages: Clients have the right to levy liquidated damages for delays caused by the contractor, as specified in the contract.
• Right to Terminate: In certain circumstances outlined in the contract, clients may have the right to terminate the contract.

Consultant’s Rights:

• Right to Professional Fees: Consultants, such as architects or engineers, have the right to receive professional fees as outlined in the contract.
• Right to Issue Instructions: Consultants have the right to issue instructions to the contractor in accordance with their role as contract administrators.
• Right to Certify Payments: Consultants may have the authority to certify payments, confirming that the work has been performed to the required standard.

Subcontractor’s Rights:

• Right to Payment: Subcontractors have the right to receive payment for work performed, as agreed upon in their subcontract.
• Right to Lien: In some jurisdictions, subcontractors may have the right to file a lien against the property for non-payment.
• Right to Stop Work: If payment is not forthcoming, subcontractors may have the right to suspend work in accordance with the contract terms.

Rights Related to Dispute Resolution:

• Right to Due Process: All parties have the right to a fair and impartial dispute resolution process as outlined in the contract.
• Right to Legal Representation: Parties involved in disputes have the right to legal representation during mediation, arbitration, or litigation.
• Right to Enforce Awards: Once a resolution is reached, parties have the right to enforce any arbitral or court awards.

Force Majeure and Frustration:

• Right to Invoke Force Majeure: Parties have the right to invoke force majeure clauses in the event of unforeseen circumstances preventing contract performance.
• Right to Terminate for Frustration: In extreme cases of frustration, parties may have the right to terminate the contract if performance becomes impossible.

Rights to Confidentiality and Intellectual Property:

• Right to Confidentiality: Parties have the right to expect that confidential information shared during the project will be protected as per contractual provisions.
• Intellectual Property Rights: Contractors and consultants may retain rights to their intellectual property unless otherwise specified in the contract.

Defending these rights involves a thorough understanding of the contractual provisions, adherence to proper procedures, and, when necessary, seeking legal counsel to ensure that the rights of all parties are respected and protected.

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