2018
Paper 1 Q4
a) Areas of impropriety
1. Impropriety in acquisition / procurement of the works.
PPADA 2015 has set our guidelines as highlighted in Part VII- Basic procurement Rules.
These include invitation of tenders, submission, evaluation and recommendation of awards.
Any of these basic procedures should have been followed and breach of any / inconsistency
with the regulation would amount to impropriety. Such include corruption, conflict of interest
etc. as per Section 66 or offences and sanctions as per section 176
2. Impropriety in valuation and payment for works.
The contract implementation team should follow guidelines as highlighted in Section 152 (2)
that include monitoring performance, ensuring right quality and contractor acts within the
provision of the act. Any breach of the same such as application and processing of payments for
works not meeting the contract qualities or acta as highlighted in section 176 during contract
administration would amount to an offense
3. Impropriety in valuation and approval of Variations that subsequently
He approval and valuation of variations I the project could have be contrary to provision in
PPADA Section 139. Examples of possible breach includes
● Varying of contract sum upwards within 12 months from the date of signing the
project
● Lack of justification of costs or without recommendation of the evaluation committee
justification of costs relating to extinction of contract period, use of prime costs,
contingencies, provisional sums and reimbursable costs
● Lack of variation to satisfy requirements as per section 139 subsection 4
● Variations exceeding 15% of the original contract sum still being incorporated in the
works and not tendered separately
NB: answer as per the clauses in the provided or mentioned Act . The provision are generally the
same perhaps a change in the section number
b) Rights and obligations of the parties.
i) Contractors’ obligation:
● To issue a 14-day notice prior to termination (Sub Clause 16.3.2)
● Cessation of work and removal of equipment 16.4
o Upon termination: cease all further work except for specifically instructed works
with regards to protection of life or property or safety of works.
o Hand over contractors’ documents, plants, materials and other works for which
the contractor has received payment.
o Remove all other goods from the site except as necessary for safety
ii) Contractors rights:
Clause 16.3 Termination by the contractor:
1. Right to terminate on the grounds of
● the Contractor does not receive the amount due under an Interim Payment
Certificate within 90 days after the expiry of the time stated in Sub-Clause1 4.7
[Payment] within which payment is to be made (except for deductions in
accordance with Sub-Clause 2.5 [Procuring Entity's Claims]),
● the Procuring Entity substantially fails to perform his obligations under the
Contract in such manner as to materially and adversely affect the economic
balance of the Contract and/or the ability of the Contractor to perform the
Contract,
● prolonged suspension; subclause 8.11
2. Right to receive Payment on termination Clause 16.5
● Receive the performance security from the procuring entity
● Payment of any loss or damage sustained as a result of the termination
● Receive payment in accordance with sub clause 19.6.2
iii) Employers rights:
1. After termination, the Procuring Entity may complete the Works and/ or arrange for any
other entities to do so.
2. Receive contractors’ documents, plant, materials and other works for which the
contractor has been paid for.
iv) Employers Obligations
● Return performance security to the contractor
● Pay the contractor in accordance with subclause 19.6
● Pay to the contractor the amount of any loss or damage sustained due to the
termination
Note: Rights of one party can be seen as a direct obligation of the other party.
C. Advisory measures to enable the parties to close the contract
As per old PPOA (Clause 33 Termination)
The contractor should give a 14-day notice of intention to terminate the contract due to delayed
payment as per section 33.1 (d). Once terminated, the contract shall stop work and ensure the site
is safe and secure leaving it as soon as reasonably possible.
The PM should take record of works executed as well as materials, goods, equipment and
temporary buildings
A certificate can then be issued for the value of works done and materials ordered and delivered
to site up to the date of issue and cost of removal of demobilisation
The contractor may specify in writing any temporary buildings, equipment goods or materials b
belonging to or hired by him, and the employer may dispose such property and credit to the
contractor the amount less the cost of disposal
Upon Termination, the procuring entity may employ and pay other persons to carry out and
complete the Works and to rectify any defects and may enter upon the Works and use all
materials on the Site, plant, equipment and temporary works
In case the parties are unable to agree on any matters, they may resolve the dispute through
provisions in Clause 37 which is arbitration. Procedure for notice and appointment of the
arbitrator should be adhered to
As per new PPRA 2021 (event after termination by Contractor clause 16)
The Contractor shall be entitled to terminate the Contract if:
the Contractor does not receive the amount due under an Interim Payment Certificate
within 90 days after the expiry of the time stated in Sub-Clause1 4.7 [Payment] within
which payment is to be made (except for deductions in accordance with Sub-Clause
2.5 [Procuring Entity's Claims]),
After a notice of termination under Sub-Clause 15.5 [Procuring Entity's Entitlement to
Termination for Convenience], Sub-Clause 16.2 [Termination by Contractor] or Sub-Clause
19.6 [Optional Termination, Payment and Release] has taken effect, the Contractor shall
promptly:
a) cease all further work, except for such work as may have been instructed by the
Architect for the protection of life or property or for the safety of the Works,
b) hand over Contractor's Documents, Plant, Materials and other work, for which
the Contractor has received payment, and
c) remove all other Goods from the Site, except as necessary for safety, and leave the
Site.
In any of these events or circumstances, the Contractor may, upon giving 14 days' notice to
the Procuring Entity, terminate the Contract.
After a notice of termination under Sub-Clause 16.2 [Termination by Contractor] has taken
effect, the Procuring Entity shall promptly:
a) Return the Performance Security to the Contractor,
b) pay the Contractor in accordance with Sub-Clause 19.6 [Optional Termination,
Payment and Release], and
c) pay to the Contractor the amount of any loss or damage sustained by the
Contractor as a result of this termination.
Upon Termination, the procuring entity may employ and pay other persons to carry out and
complete the Works and to rectify any defects and may enter upon the Works and use all
materials on the Site, plant, equipment and temporary works
In case the parties are unable to agree on any matters, they may resolve the dispute through
provisions in Clause 20 which include amicable settlements and arbitration
