8.0 ADMINISTRATION OF CONTRACTING WORKS AND DOCUMENTATION

Contract administration is one of the very important work or job scope that involving with numerous tasks that occur before and after the contract execution work order issuance. In other words, it involves in managing the contracts to ensure that the contract is comply and fulfill the condition offered. All of the works must be administered in accordance with the contract specifications, contract terms and conditions, its general laws and regulation. There are few elements in a proper contract documents and specifications; enforcing general regulations; ensuring quality control by overseeing, inspecting and reviewing, sampling and testing of all materials and works and lastly recording verifying and preparing monthly pay estimates. It concentrates on the relationship between the department and the supplier from contract award to contract closeout ensuring supplier delivers product or service in conformance with the purchase documents requirements. A good contract administration can ensure that the customer’s satisfaction and can minimize disputes.

            Contract documentation is all documents which they are combined and form the basis of the contract including all the pre-tender, tender and contractual documentation. In contract documentation, it will give enough information that can capable to complete the works and meet the service delivery requires. The documentations that stated which can form a contract documents includes:

·         Contract

·         Contract Conditions

·         Special Contract conditions

·         Bill of quantities

·         Drawings

·         Specification

·         Other documents

            A tender bid contract form of administration and also the direct negotiation contract form of administration is adopted in Prangin mall. It means that there have two forms of contract used for outsourcing the contractor for maintenance work in Prangin wall which is open tender type and also the direct negotiation type of contract. For the open tender, which means the tender bid contract form of administration, it means that the instant the submission of a bid, a contract is created between the bidders and tenderer. The bid once submitted the, it can be withdrawn or changes but this would be risky to them. Once the bid is accepted, a contract is formed between the winning contractor and the owner. Besides that, for the direct negotiation form of administration, the tenderers direct find the contractor for the negotiation of the maintenance work required and the price required which this could reduce a lot of time that taken for the tenderers process.

       The Prangin mall consist of an operation manager which in charge of such contract administration and documentation works who name as Mr William. According to his statement, he said that the contracting works for the maintenance works is depending on the works whether it is a major defect or just a minor defect. The major works such as maintenance of HVAC, Fire System and etc, there will have to outsource to the external contractor to maintain it as the contractor have the resource and the they know the requirement that meets the laws of the HVAC and all that Fire System. For the minor defect such as peeling paint, surface crack and etc, would not outsource any contractor to done it but the technician of the Prangin mall could recover it by their own.

Existing Outsourcing Work

         Prangin mall is employed several outsourcing company for their maintenance work. Table below shows that the type of work that they are outsourcing and the contractor who carried out the work unfortunately it is private and confidential according to the operation manager.

Table 1 Existing Outsourcing Work and corresponding Maintenance Program

Type of Work	Maintenance Program
Civil Work	Corrective Maintenance
Mechanical Work	Corrective Maintenance
Fire System (Fire Extinguisher)	Schedule Maintenance
Fire System (Hose Wheel, Pump, Fire Alarm)	Preventive Maintenance
HVAC system	Preventive Maintenance

Type of Tender

The type of tender is depending on the situation of the maintenance work that required by the pranging mall. They are using both the direct negotiation tender and also the open tender. The situation to use the open tender is the maintenance work that do not require immediate action like a scheduled maintenance or the preventive maintenance. While for direct negotiation contract, they are using this type of contract to outsource the external contractor is when the maintenance work cannot be procrastinated which have to solve immediately such as the broken of mechanical system or civil work which in other word is the corrective maintenance program or any major defect that required the immediate action. The table below shows the documents that needed in tender submission.

Table 2 Lists of documents needed in tender submission

Section	Content
A	Surat Akaun Borang Tender
B	Notis Dan Syarat-Syarat Tawaran
C	Ringkasan Tender
D	Borang Kontrak PWD JKR 203 (Rev. 1/2010)
E	Skop Kerja
Bill 1.0	Pendahuluan dan Pematuhan Kepada Syarat-Syarat Kontrak (Preliminaries) Butir-Butir Kerja
Bill 2.0	Kerja Penyelenggaraan
Bill 3.0	Kerja-Kerja Elektrik
G	Lampiran
i)	Jadual Kadar Harga
ii)	Senarai Lukisan
iii)	Peraturan Keselamatan Dan Kesihatan Pekerja Di Tapak Bina   -Dasar Pengurusan Dan Kawalan Keselamatan Dan Kesihatan Pekerjaan (KKP) Terhadap Pekerja / Pihak Luar Yang Memasuki / Menggunakan Premis Prangin Mall Mengikut Kehendak Akta KKP 1994   - Peraturan Keselamatan Dan Kesihatan Pekerjaan (KKP) Terhadap Kontraktor Yang Digunakan Khidmatnya Di Premis Prangin Mall

Open tender / competitive bidding

In Prangin Mall, they adopted open tender bidding for preventive maintenance program which involved for the Fire System and also the HVAC System. Open tender means that the contract involved a transparent’ procurement method in which the bids are from all competing contractors, suppliers or vendors who are interested to join. The scope, specifications and terms and conditions of the proposed project are openly advertised, so that the bidders are free to submit their tender in a fair condition. Then, their proposed contracts and criteria are then being evaluated. This type of open tender aims at obtaining goods and services at the lowest prices by stimulating competition and also preventing any favouritism happens.

Generally, there are 2 types of competitive bidding practicing by the team which are open and closed competitive bidding.  Open bidding refers to the sealed bids are opened in full view of all who may wish to witness the bid opening whereas for closed competitive bidding, it refers to the sealed bids which are opened in the presence of authorized personnel only. Most of the time, Mr William are normally practicing close competitive bidding.

Direct Negotiation

Another tendering method usually adopted in Prangin mall is direct negotiation method. This method is normally used when it is for the private work or it involved projects of large size and great complexity. The selected contractor will be awarded with the contract without any competition needed. In the direct negotiation, it provided a flexibility of pricing arrangement which might save a lot as it able to provide a better price. Yet, this method is often viewed as less preferable alternative to be adopted by the team unless under special case which there have an emergency cases such as the sudden break down of HVAC or any system which requires immediate action. By using this method, it is to save time for the tendering process which then the immediate action problem can be solved immediately. Besides that, it is hard for them to identify cost-savings or performance improvements achieved through negotiations.

Type of Contract

Lump Sum contract is being used widely in the maintenance management between prangin mall and the selected companies. With the presence of bonding under lump sum contract, it means that the selected companies are agreed to receive a payment of specified amount for completing work without any cost breakdown by the principal-prangin mall. This type of contract is a traditional means of procuring and still the most common form of contract. Under this lump sum contract, a single ‘lump sum’ price for all of the works is agreed before the works begin. Lump sum contracts apportion more risk to the contractor than some other forms of contract, as there are fewer mechanisms to allow them to vary their price, and they give the client some certainty about the likely cost of the works.

By having this contract, prangin mall assigned all the risks to the contractors but they have the freedom to provide their own means and methods to complete the work as long as it is under reasonable price and standards. The lump sum price is developed by estimating the labour costs and adding specific amount that will cover the contractor’s overhead whereby it will be varied from builder to builder.

Which contractor to choose

Qualification of Tender Selection

The objective of a qualification process is to set a minimum bar of capability for the bidder or group of companies to enter the contract. Setting qualification criteria will reduce the risk of project failure caused by a lack of capabilities and capacity in the future. The maintenance team in prangin mall have set a bar of criteria in selecting the winner of the tender for each calls of tender. The 4 main criteria are the financial of the company, experience or capability of the company, machinery used by the company as well as the tender amount offered by the company. Figure 5.2 shows the summary of the qualifications of bidder to be selected.

Figure 5.2 Summary of qualifications of tender selection
*Please click the photo for clearer image