A Contractor entered into a contract with Housing Development Board (HDB) to build ten blocks of HDB flats using the Public Sector Standard Conditions of Contract (PSSCOC) for construction works (8th Edition, 2020). The following situations occurred during the construction period.

BPM109: Contract Administration
Question 1

The following questions are to be answered in the context of the SIA Measurement (9th Edition) Contract.

(a) An Architect issued a variation instruction regarding the diversion of drainage works. On 15th January 2021, a joint site measurement was called to determine the extent of work done. Advise the Contractor on what he can do to protect his right to additional payment.

(b) With reference to the information below, apply the rules for variation and calculate the cost of variation for each of the following architect’s instructions (AI):

(i) AI no. 1 – Demolish ten barbeque pits.

(ii) AI no. 2 – Replace the timber floor with carpet as indicated in the revised shop drawings.

(iii) AI no. 3 – Increase the concrete floor slab thickness from 150mm to 200mm as indicated in the revised shop drawings.

Additional information:

• The cost breakdown for “Supply and lay timber floor” rate for material, labour,
profit and overheads is: 50%, 35% and 15% respectively.

• The Contractor is given a bulk discount of 20% by the timber floor supplier because the order for timber floor had exceeded 50 m2

. The discounted rate was used during the tender.

• The Contract Rates for the “Supply and lay timber floor” and “Supply and lay
carpet” are $50/m2 and $20/m2 respectively.

• The timber floor area in the tender drawings is 65 m2

. It is now replaced with 50 m2 carpet and 15 m2 timber floor because of the variation order.

• The Schedule of Rate for “Supply and lay 150mm thick concrete slab” is $21/m2

• The area of the concrete slab affected by the variation order is 200 m2

• The daywork record for barbeque pit demolition work shows: 15 May 2021- 2
labourers (8am to 12pm), 16 May 2021 – 2 labourers (1pm to 7pm), lunch break
(12pm – 1pm). Overtime rate shall applicable.

• The daywork rate for a labourer is $6.50/hour.

(c) The following are extracts taken from a building project’s cost information.
• Contract sum – $15,000,000

• Retention on work done and material delivered to site – 10% and 20% respectively.

• Limit of retention – 5%

Answer the following questions:

(i) The amount of work done for Payment Certificate no. 3 & 4 payable to the Contractor are $7,000,000 and $7,900,000 respectively. Calculate the retention sum for each payment certificate.

(ii) The materials delivered to the Site is valued at $350,000 in a particular month. Calculate the sum payable for “unfixed materials” for that month.

Question 2

A Contractor entered into a contract with Housing Development Board (HDB) to build ten blocks of HDB flats using the Public Sector Standard Conditions of Contract (PSSCOC) for construction works (8th Edition, 2020). The following situations occurred during the construction period.

(a) The Superintending Officer (SO) gives a verbal instruction to the Contractor to carry out additional works. Advise the Contractor on what he must do to protect his right to additional payment.

(b) Discuss the courses of action that are available to both the Contractor and the SO if the Contractor disagrees with the SO’s valuation of the Final Account

A Contractor entered into a contract with Housing Development Board (HDB) to build ten blocks of HDB flats using the Public Sector Standard Conditions of Contract (PSSCOC) for construction works (8th Edition, 2020). The following situations occurred during the construction period.
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