construction procurement essentials

Standard Forms of Contract in Use

TRADITIONAL PROCUREMENT

China
— Building and Engineering Construction Contract, issued by the
Ministry of Construction and the Department of Labour and
Commerce, 2007 Edition.

— Building and Engineering Construction Specialist Sub-contract,

issued by the Ministry of Construction and the Department of
Labour and Commerce, 2007 Edition.

— Building and Engineering Construction Labour Sub-contract,

issued by the Ministry of Construction and the Department of
Labour and Commerce, 2007 Edition.

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construction procurement essentials
Standard Forms of Contract in Use

TRADITIONAL PROCUREMENT

Hong Kong
— Agreement and Schedule of Conditions of Building Contract for use
in the Hong Kong Special Administrative Region (Standard Form of
Building Contract Private Edition – With Quantities 2005 Edition).

— Agreement and Schedule of Conditions of Building Contract for use

in the Hong Kong Special Administrative Region (Standard Form of
Building Contract Private Edition – Without Quantities 2006
Edition).
— Agreement and Schedule of Conditions of Nominated
Sub-Contract for use in the Hong Kong Special Administrative
Region, 2005 Edition.

— Agreement and Schedule of Conditions of Nominated Supply

Contract for use in the Hong Kong Special Administrative Region,
2005 Edition.

— General Conditions of Contract for Building Works published by the

Government of the Hong Kong Special Administrative Region,
1999 Edition.
— Standard Form of Contract for Minor Works (1992, 1st Edition,
first amendment published January 2003, English and Chinese).
— General Conditions of Contract for Civil Engineering Works
published by the Government of the Hong Kong Special
Administrative Region, 1999 Edition.

— Sub-Contract for Building Works to be used in conjunction with the

General Conditions of Contract for Building Works (1999 Edition)
published by the Government of the Hong Kong Special
Administrative Region, 2000 Edition.

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construction procurement essentials
Standard Forms of Contract in Use

TRADITIONAL PROCUREMENT

Malaysia
— Standard Form of Contract to be used where Bills of Quantities
form part of the Contract PWD 203A (Rev. 2007) published by
Jabatan Kerja Raya (JKR).

— Standard Form of Contract to be used for Contract where Drawings

and Specifications form part of the Contract PWD 203 (Rev. 2007)
published by Jabatan Kerja Raya (JKR).

— Standard Form of Sub-Contract for Nominated Sub-Contractor

where The Main Contract is based on Form PWD 203 or 203A,
PWD 203N (Rev. 2007) published by Jabatan Kerja Raya (JKR).

— Standard Form of Sub-Contract for Nominated Suppliers where

The Main Contract is based on Form PWD 203 or 203A, PWD
203P (Rev. 2007) published by Jabatan Kerja Raya (JKR).

— Agreement and Conditions of PAM Contract 2006 (with Quantities)

published by Pertubuhan Akitek Malaysia (PAM).

— Agreement and Conditions of PAM Contract 2006 (without

Quantities), published by Pertubuhan Akitek Malaysia (PAM).

— Agreement and Conditions of PAM Sub-Contract 2006 for use

where the Sub-Contractor is nominated under the PAM Contract
2006, published by Pertubuhan Akitek Malaysia (PAM).
— CIDB Standard Form of Contract for Building Works 2000 Edition,
published by the Construction Industry Development Board
Malaysia (CIDB).

— CIDB Standard Form of Sub-Contract for Nominated

Sub-Contractor for use in conjunction with the CIDB Standard
Form of Contract for Building Works, Form CIDB.B(NSC)/2002
published by the Construction Industry Development Board
Malaysia (CIDB).

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construction procurement essentials
Standard Forms of Contract in Use

TRADITIONAL PROCUREMENT

Singapore
— Articles and Conditions of Building Contract published by the
Singapore Institute of Architects, 8th Edition December 2008
(Measurement Contract).

— Articles and Conditions of Building Contract published by the

Singapore Institute of Architects, 8th Edition December 2008
(Lump Sum Contract).

— Conditions of Sub-Contract for use in conjunction with the Main

Contract (Lump Sum Contract and Measurement Contract, 8th
Edition) published by the Singapore Institute of Architects, 4th
Edition November 2008.

— Public Sector Standard Conditions of Contract for Construction

Works published by the Building and Construction Authority, 6th
Edition December 2008.
— Standard Conditions of Nominated Sub-Contract for use in
conjunction with the Public Sector Standard Conditions of Contract
for Construction Works published by the Building and Construction
Authority, 5th Edition December 2008.

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construction procurement essentials
Standard Forms of Contract in Use

TRADITIONAL PROCUREMENT

United Arab Emirates (Dubai and Abu Dhabi)

— FIDIC Conditions of Contract for Construction published by the
Federation Internationale des Ingenieurs-Conseils, 1st Edition
1999.

— NEC3 Engineering and Construction Contract published by the

NEC, June 2005 (with Amendments June 2006).

Thailand
— FIDIC Conditions of Contract for Construction published by the
Federation Internationale des Ingenieurs-Conseils, 1st Edition
1999.

Vietnam
— FIDIC Conditions of Contract for Construction published by the
Federation Internationale des Ingenieurs-Conseils, 1st Edition
1999.

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construction procurement essentials
Standard Forms of Contract in Use

DESIGN & BUILD PROCUREMENT

China
— FIDIC Conditions of Contract for EPC/Turnkey Projects published
by the Federation Internationale des Ingenieurs-Conseils, 1st
Edition 1999.

Hong Kong
— General Conditions of Contract for Design and Build Contracts
published by the Government of the Hong Kong Special
Administrative Region, 1999 Edition.

Malaysia
— Standard Form of Design and Build Contract PWD Form DB (Rev.
2007) published by Jabatan Kerja Raya (JKR).

Singapore
— REDAS Design and Build Conditions of Contract published by the
Real Estate Developers’ Association of Singapore, 2nd Edition
October 2007.

— Public Sector Standard Conditions of Contract for Design and Build

published by the Building and Construction Authority, 5th Edition
December 2008.

United Arab Emirates (Dubai and Abu Dhabi)

— FIDIC Conditions of Contract for Plant and Design-Build published
by the Federation Internationale des Ingenieurs-Conseils, 1st
Edition 1999.

Vietnam
— FIDIC Conditions of Contract for Plant and Design-Build published
by the Federation Internationale des Ingenieurs-Conseils, 1st
Edition 1999.

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construction procurement essentials
Procurement Arrangements in a Nutshell

Traditional Procurement

Under traditional procurement, the Client engages an Architect and other

Consultants to develop and complete a detailed design for a building
project, through drawings and a set of prescriptive specifications. The
construction is carried out by a Contractor who is appointed after a
competitive tender or through negotiation.
Traditional procurement separates the design and construction processes.
The Contractor has no responsibility for design and carries out the work as
shown and described in documents provided by the Employer and his
professional advisers. The basis of the tender price is for a fixed design
element provided by the design consultants to varying levels of detail.

Design & Build

Design-build offers an integrated supply chain from design to construction

of a building project and provides a single point of contact for the Client. In
design-build, the Client assembles an outline design and states his
functional requirements for the Contractor to provide a design solution who
also executes the construction of the building. The Contractor takes full
control and responsibility contractually of the whole design and construction
process from start to finish.
Design-build variants have also been developed in an attempt to bring about
the best combination of achieving the ‘one-stop shop’ for the Client.

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construction procurement essentials
Procurement Arrangements in a Nutshell

Modified Traditional Approach with Contractor-Designed Portions

The modified traditional procurement method provides for defined parts of

the works (for example, architectural works) to be designed by the
Client-appointed Architect. The remaining portions (commonly, the structural
works and mechanical and electrical services) are left to the Contractor who
takes responsibility for the design and integrating them with the architectural
portion for construction.

Guaranteed Maximum Price Contracts

A Guaranteed Maximum Price (or GMP) is effectively a lump sum price for a
project where the amount of money that a Client is contractually obliged to
pay is the maximum price. In GMP contracts, the risk of the final cost
exceeding the price cap and cost overruns falls on the Contractor whose
entitlement to payment is capped at the GMP level.
The characteristic price cap in GMP contracts bears the hallmark of cost
certainty and can best be described as a lump sum price with very limited
rights to adjustments for variations.
GMP contracts can work in a variety of procurement routes – from the
traditional approach to modified traditional with contractor-designed
portions, design-build or management-oriented arrangements.

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construction procurement essentials
Procurement Arrangements in a Nutshell

Management-oriented Arrangements
Construction management is an interactive procurement concept involving
the combined efforts of the Client, Construction Manager, design
consultants and a multitude of Trade Contractors. The Client contracts
directly with all Trade Contractors while the Construction Manager, on behalf
of the Client, programmes and manages the entire delivery process from
inception to completion.
A Construction Manager is a consultant, design team coordinator, manager
of the myriad of Trade Contractors and the Client’s construction adviser but
is not the Main Contractor.
A variant of construction management is management contracting where the
works are let out in work packages by the Management Contractor who is
reimbursed the costs of such works, plus a fee which can be a percentage
of the costs or a fixed sum. It is contrasted to construction management in
that it is the Management Contractor, not the Client, who contracts with each
of the Works Contractors.

Public-Private Partnerships
Public-Private Partnership (PPP) is a generic term which describes the
various possible structures whereby the public and private sectors work
together in the delivery of services and the provision and operation of an
asset such as a building, facility, plant or equipment.
The procurement of services (as opposed to assets) by the public sector
Client is from an asset designed, constructed, funded and maintained by the
private sector. Through PPP, private sector involvement introduces
innovation and a high level of financial, managerial and technical expertise.
Broadly, a typical PPP model involves the procuring authority (or public
agency) contracting with the Special Purpose Vehicle (SPV) under a
long-term service purchase agreement of usually 15 to 30 years for the
design, construction, maintenance and operation of the facility. The SPV
enters into a range of sub-contracts for the construction works, and also for
the operations and maintenance of the asset.
Typical forms of project structures under PPP include Design, Build,
Finance, Operate (DBFO); Design, Construct, Manage, Finance (DCMF);
Build, Own, Operate (BOO); Build, Operate, Transfer (BOT); Build, Own,
Operate, Transfer (BOOT); and Private Finance Initiative (PFI).

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