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					                                       Chapter 16 – DETERMINATION



                                         Description                       Action By           Reference
             Flowchart



                  1                      1. Establish the completion          CAO
                                            cost.



                  2                      2. Prepare and issue Final           CAO
                                            Account
   No                    Yes
                                         3. Amount due to                     CAO
                  3                         Government?


                                         4. Payment to Contractor             CAO
       4


                           5             5. Issue claim to Contractor         SOR
                                            by AR Register


                No
                           6             6. Contractor pays?

                                Yes

                                         7. Issue 1st Reminder (within        SOR
                           7
                                            2 weeks)



                No                       8. Contractor fails to pay?
                           8
                                Yes
                                         9. Issue 2nd Reminder (within        SOR
                           9                2 weeks)



               No                        10. Contractor fails to pay?
                           10

                                Yes

                          11             11. Issue 3rd Reminder (within       SOR
       End
                                             2 weeks)



                                         12. Refer matter to the Legal        BUBPK
                                                                              BUBK
                           12
                                             Adviser at Ministry level /
                                             A.G.’s Chamber


                               Flowchart 16.2 – Settlement of Final Account




16-2                                                                                Revision 0 : March 2009
                                      Chapter 16 – DETERMINATION


16.3.2       Settlement Of The Final Account

                                                                                      Action By
    Step      Procedures / Tasks
                                                                                    / Reference
              (Please refer to Flowchart 16.2 – Settlement of Final
              Account)
     1        Establish Completion Cost                                              Action By:
                                                                                           CAO
              Prepare the estimate on the Completion Cost (comprising of
              loss by Government and new contract sum by new
              contractor).
  2, 3 & 4    Prepare and Issue Settlement of Final Account                          Action By:
                                                                                           CAO
              Prepare the Settlement of Final Account for the new
              Contractor. Costs comprise of:

                      (a)   Interim Payments
                      (b)   Advance Payment
                      (c)   Payments to subcontractors and suppliers
                      (d)   New Contract Sum
                      (e)   Cost for re- tender
                      (f)   Loss to Government
                      (g)   On- Cost Charge
                      (h)   Finalised Contract Sum

              Establish the Final Amount due to Contractor or
              Government, as the case may be.

              Ensure that all deductions are incorporated into the Final
              Account. Include the amounts of the forfeited Performance
              Bond.

              Pay the Contractor if any final amount is due to him.
     5        Issuance of Claim to Contractor (By A.R. Register)                     Action By:
                                                                                           SOR
              If under the Final Account an amount is due to Government,
              send the Final Account and claim for payment (‘claim’) to
              the Contractor by A.R. Registered post as soon as is             Refer: SP JPS Bil
              practicable, preferably within 9 months after determination.              1/1990
   6&7        Issuance of 1st Reminder                                               Action By:
                                                                                           SOR
              Issue 1st reminder if Contractor fails to pay, or no action is
              taken by Contractor, within 14 days of issuance of claim.


   8&9        Issuance of 2nd Reminder                                               Action By:
                                                                                           SOR
              Issue 2nd reminder if Contractor fails to pay, or no action is
              taken by Contractor, within 14 days after the issuance of 1st
              reminder.




Revision 0 : March 2009                                                                   16-7
                                     Chapter 16 – DETERMINATION

                                                                                              Action By
   Step      Procedures / Tasks
                                                                                            / Reference
  10 & 11    Issuance of 3rd Reminder                                                        Action by:
                                                                                                   SOR
             Issue 3rd reminder if Contractor fails to pay, or no action is
             taken by Contractor, within 14 days after the issuance of 2nd
             reminder.
       12    Refer to Legal Adviser at Ministry level/ A.G.’s Chamber                        Action by:
                                                                                                  BUBK
                                                                                                BUBPK
             Seeks advice by Legal Advisor (of Ministry or State) if still no
             action taken by Contractor.


16.4        NOTICES

16.4.1       Notice for Intention to Notice Determine the Contractor’s Employment

   To state clearly the contract no, job title, contract sum contract period, date of possession,
   completion date and extended completion date, if any.

   To state clearly the reason of determination by the Contractor’s default.

   To highlight the percentage of works done and aims for completion according to original or
   revised works programme.

   To state the date and duration by the Contractor suspended the works.

   To highlight whether the contractor consistently repeats the default (not for 1st warning) together
   with all references for previous notices such as serials meetings, date, officers in charged, etc.

   To state the assistance given to contractor in form of materials procurements and granted
   extension of time

   To state the date or last extended date for completion together with method statements works
   programme.

   The notice must be copied to all relevant parties including PKK or bank/ insurance company.

16.4.2       Notice for Determination

   To state clearly the contract no, job title, contract sum contract period, date of possession,
   completion date and extended completion date, if any.

   To state the reference and date of Notice for Intention the Determine the Contractor’s
   Employment

   To state whether the Contractor is continuing the defaults

   If the Contractor replied a notice, to highlight to them the reasons are not accepted.

   The notice must be copied to all relevant parties including the registrar of the Contractor and
   bank/ insurance company.




16-8                                                                                          April 2009
                                                                                 Revision 0 : March 2010
                                       Chapter 16 – DETERMINATION


16.5           FINAL ACCOUNT

      To include the Completion Cost which comprises the advance payment, interim payments,
      payments to sub-contractors, suppliers, new contract price, re- tender cost, loss to Government
      and charge on cost.

      To include the Revised Contract Sum which includes deduction for loss, damages and expense.

16.6           RE-TENDER

      Evaluate the executed works and check the balance of works to avoid disputes for BQ contracts.

      To allow credit for plants, tools, equipment and unfixed materials left on site for use of new
      contractor.

      Any other above this to refer to Chapter 6 to 8.

16.7           REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents for the procedures or
    processes outlined in this Chapter.

      Sample of Warning Letter (‘Notis Kemungkiran Kontraktor’)

      Sample of Notice for Determination (‘Penamatan Pengambilan Kerja Kontraktor’)

      Sample of Schedule Activities (Bar Charts for Preparation of Tender Invitation)

      Sample of Settlement of Final Account Upon Determination

      Sample of Letter for Calling off Performance Bond and Advance Payment Bond

      Sample of Calculation of Loss by Government

16.8           REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for the latest procedures and
processes in respect of determination of the employment of the contractor.

Treasury Circular
(Surat Pekeliling Perbendaharaan)

     SPP 5/2006:
[1] SPP 8/2009 Peraturan Pelantikan Kontraktor Penyiap bagi Projek Sakit

DID Circulars
(Surat Pekeliling / Edaran JPS)

[1] SPJPS. Bil. 1/1990: Perakuan Penamatan Pengambilan Kerja Kontraktor Berasaskan Borang
Kontrak 203 & 203A
[2]    Surat Edaran (27)dlm.PPS 10/4/2 Jld. 4 Bertarikh 7/2/03 : Penamatan Pengambilan Kerja Kontraktor




April 2010 : March 2009
Revision 0                                                                                       16-9

				
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