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Site Possession and Insurance, PB PDF
Site Possession and Insurance, PB PDF
BONDS
PRESENT BY
POSSESSION SITE
Something that you own or has with you A place where something is, was or will
at a particular time. be built.
02
INTRODUCTION
INTRODUCTION
1. The date for possession of the site may stated in the contract by the contractor.
2. If the date of possession is not stated in the contract, the site will be handed over to the contractor within a
reasonable time after both parties signing the contract.
3. If client fails to give possession of the site to the contractor without provisions for delay in the contract, then they
will be in breach of contract.
03
DIFFERENTS BETWEEN PAM
CONTRACT 2018 WITH
QUANTITIES & PWD FORM 203A
(REV.1/2010)
DIFFERENTS BETWEEN PAM CONTRACT 2018
WITH QUANTITIES & PWD FORM 203A
(REV.1/2010)
PAM CONTRACT PWD FORM 203A
2018 WITH QTY (REV.1/2010)
Clause 11.0 – Inspection of
Clause 9.0 – Access to the Site
works
Clause 38.0 – Possession of
Clause 21.0 – Date of Site
commencement, Postponed
& Completion Date Clause 46.0 – Access for
work, etc
PAM CONTRACT 2018 WITH
QUANTITIES
CLAUSE 9.0 - ACCESS TO THE WORKS
CLAUSE 9.1 :
CLAUSE 11.1 :
• Any information or documents forwarded by the Government to the contractor shall not
relieve the contractor of his obligations under the provisions of this clause
PWD FORM 203A (REV.1/2010)
CLAUSE 38.0 – POSSESSION OF SITE
CLAUSE 38.1 :
• No work under this contract shall commence until the Performance Bond
stipulated (13.0) & insurance policy (15.0 & 18.0).
• If the contractor shall produce to the Government the cover note of the
said insurance policy and the receipt of the premium paid, it shall be
sufficient discharges of his obligations under this clause.
CLAUSE 38.2 :
• Unless the contract document shall otherwise provide, possession of the
site as complete as may reasonably be possible but not as to constitute a
tenancy, shall be given on or before the “Date of Possession” stated in
Later of Acceptance (LA).
PWD FORM 203A (REV.1/2010)
CLAUSE 38.0 – POSSESSION OF SITE (CONT’D)
CLAUSE 38.3 :
❑ Provided always that the possession of site may be given in section or in
parts.
❑ Other restrictions upon possession of the site shall be stated in the
Appendix to these conditions or in the Contract Documents.
CLAUSE 38.4 :
❑ S.O may issue instructions (43.1h)
❑ If any delay in giving possession of the site as stated in the LA or delay in
giving any section or part of the site as provided in Clause 38.3
❑ The contractor shall not be entitled to claim for any loss or damage
caused by such delay in giving possession of the site.
❑ The contractor also do not entitled to terminate the contract.
If the delay is less than 90 If the delay is more than 90
days, refer to Clause 38.4 days, refer to Clause 38.5
<90 Days
Original date of site New date for site
possession possession
PWD FORM 203A (REV.1/2010)
CLAUSE 38.0 – POSSESSION OF SITE (CONT’D)
CLAUSE 38.5 :
▪ S.O shall give written notice to the contractor of the causes for the delay.
▪ If the delay is more than 90 days of the “Date of Possession” stated in LA,
the contractor have two options.
OPTION 1 :
• Agree to proceed the works when the site is OPTION 2 :
available. • Contractor can determine his own employment.
• Contractor cannot claim for loss & damages. • Contractor entitled to claim for loss & damages
• Contractor cannot determine his own employment caused by the delay
PWD FORM 203A (REV.1/2010)
CLAUSE 38.5 (CONT’D)
✓ Contractor cannot terminate the contract after agreeing to proceed with the works.
PWD FORM 203A (REV.1/2010)
CLAUSE 38.6
If the delays in giving the part of the site possession is exceed 90 days, S.O will give written
notes and the contractor also may inform the S.O in writing within 14 days of its decision.
A. B. C.
HW Nevil is the employer William already done his Nevil had give certificate
& William is the work on time and also of practical completion to
contractor. giving back the site to the the William.
employer.
D. E. F.
William need to re-enter Nevil should give Nevil do not allowed
the site in order to make permission to William William to enter the site
good the defects. because William is because the date of
necessary to make good possession of William is
his works. ended.
HW Nevill (Sun blest) Ltd v William Press &
Son Ltd (Cont’d)
• In clause 15(2) and (3) gave only a right to re-enter to the site to
such extent as was necessary to remedy defects pursuant to a
schedule prepared or instructions given by the architect.
• The defects in the drains discovered after the certificate of practical
completion had been given undoubtedly constituted breaches of
contract. Clause 15(2) and (3) provided an efficient way of dealing
with defects to the advantage of both parties.
INSURANCE
DEFINITION
INSURANCE
Insurance is a contract, represented by a
policy, in which an individual or entity
receives financial protection or
reimbursement against losses
WHAT TIME TO PROVIDE THE INSURANCE
• Before the works are start on site. This is to ensure that the liability of the contractor
and the sub-contractor are always covered with the necessary insurances.
• The contractor is not entitled to extension of time due to the delay in depositing
insurance policies with the government.
IMPORTANCE OF INSURANCE
• The contractor is responsible for any personal injury or death of any person while
performing his duty in work.
• The client is not responsible for any injury and death of any person in implement work.
• The contractor is to compensation the employer to provide protection to the
government against the claims by a third party due its negligence and fault.
• Not liable to compensation the government if the loss is will caused by the
government’s negligence
• Not liable to compensation the government if the loss is will caused by the
government’s negligence
For government projects with normal risks, the minimum coverage for any 1 accident
where the number of accidents is unlimited are as follows :-
• The insurance is to be taken under the joint names of the employer and the contractor.
• For sub-contract work, under the joint names of the employer, contractor and the sub-
contractor.
PERIOD OF INSURANCE
• The contractor is required to maintain the insurance for the whole construction period
and the whole of the defect liability period.
• The insurance is to cease only upon the issuance of the certificate of completion of
making good defects.
CALCULATION PREMIUM
• The contractor is required to furnish the SO the insurance policy and the receipt of the
premium paid before it start the work.
• Rates difference between insurance companies and much influenced by the limit of
indemnity, contract sum, location of site, insurance companies regulations and etc.
• The Contractor is responsible to renew the insurance policy if necessary, for example
have EOT
• If not, the employer may renew the insurance on behalf of contractor
• The Government is entitled to the on cost charges as stated in the appendix
• The Employer also may deduct the renewing cost from the Performance Bond
CANCELLATION OF INSURANCE
• The Contractor can make any cancellation to the insurance policy within 30 days after
the notice of cancellation is issued to the employer.
• Cancellation only can be made after the issuance of CCMGD
• The 30 day period gives ample time for the government to take any necessary action
before the cancellation of the insurance policy.
DIFFERENCES OF INSURANCE POLISY BETWEEN PWD 203A AND PAM
INSURANCE WORKS
Clause 18 : Clause 20 :
• If the loss and damage is caused by contractor, the • If the loss and damage is caused by contractor, the
contractor must pay for the loss or damages. insurance will covered the default.
PUBLIC LIABILITY
Clause 15 : Clause 19 :
• Insurance policy cover all personal injury or death • Insurance policy cover personal injury or death and
and damages to the property for the third party damages to the property for the third party in execution of
Clause 15 : Clause 18 :
• Insurance of workmen compensation is not a • Insurance of workmen is compulsory rule for local or
PERFORMANCE BONDS
debt investment in which an investor
the action or process of carrying out or loans money to an entity (typically
accomplishing an action, task, or function. corporate or governmental) which
borrows the funds for a defined period of
time at a variable or fixed interest rate.
PERFORMANCE BOND CAN USE
• The performance bond can be used at any time whenever there is non-performance of the
contract by the employer.
• The performance bond may be used in the following circumstances:
i. Payment of defects made good by others if SO elected to do so.
ii. Payment of works executed by others if failure by the contractor to perform work when
instructed.
iii. Payment for removal of improper works, material or plant.
iv. Reimbursement of insurance premium paid by the employer if the contractor fails to insure as
required.
v. The recovery of liquidated damages
vi. The recovery of loss in determination by Employer.
PERFORMANCE BOND
• A performance bond is an agreement between the Government, the contractor and a third party like
bank or insurance company.
Clause 13.1(a)
• The contractor is required to submit the Performance Bond before he is allowed to start work on site.
Clause 13.1(b)
• Contractor deemed to opt for performance guarantee sum
Clause 13.2
The third party agrees to pay a sum of money to the Government in the event of non-performance of the
contract by the contractor.The duration of the performance bond is from the date of possession until 12
month after expiry of defects liability.
AMOUNT OF GUARANTEE
Clause 13.1 (a)
The value of the performance bond must be for an amount equal to 5% of
the contract sum.
Example calculation of value of performance bond:
Contract Sum = RM10,000,000.00
Value of PB = 5% of RM10,000,000.00
= RM500,000.00
The value of the performance bond does not change even though the
contract sum changes.
Performance guarantee sum
PWD FORM 203A
Clause 13.2
PAM WITH QUANTITIES
Clause 39
• deduction ten percent (10%) of amount from first and subsequent interim
payments
• Until the total deduction is equivalent to the 5% of the total sum.
PERFORMANCE BOND
• The performance bond provides protection to the government against non-
performance of a contract by the contractor and will be released to the
contractor when the work has been completed and the defects made good by
the contractor.
• This is to pay for the loss and damage incurred by the employer due to the
termination of the contract.
CASE STUDY
“In consideration of Esso Production Malaysia Inc. (EPMI) agreeing to release to
Perbadanan Ladang-Ladang Tabung Haji Sdn. Bhd. (PLLTH) the sum of DM466,562 (Four
hundred sixty six five hundred sixty two only) being the amount of liquidated damages (L/D)
presently withheld by EPMI pursuant to several purchase Orders made between EPMI and
PLLTH, we hereby Unconditionally and Irrevocably guarantee the payment to EPMI, the
Ringgit equivalent of the sum of DM466.562 (Four hundred sixty six five hundred two
only).”
THANK YOU!