'Measurement' For PT Perumahan Pembangunan, Bogor 2011

An overview of the Standard Method of
Measurement
(SMM)
BY
ASSOCIATE PROFESSOR Sr. AHMAD FARIS OMAR

For
PT Perumahan Pembangunan
18 Jan 2011
Bogor Jakarta
1/21/2011 PM Sr. Hj. Ahmad Faris Omar 1

Aim
An overview of the:
Construction Contract Vs SMM

Overview of the SMM
Bills of Quantities
Measurement
Work examples
BQ uses and benefits

Formation Of Construction Contract
Construction process is very complex and
intricate that needs a valid agreement prior
commencement.
A contract is a legally binding

agreement between two or more
persons.
(Binding means enforceable by the court)

( X breach contract, Z can claim a legally
enforceable remedy from X)
Malaysian context
A building or engineering contract is

generally governed by the Contracts Act
1950 and other applicable statutory laws
like the Street, Drainage and Building
Act 1974, Uniform Building By-Laws
1984 and Town Planning act 1976.
Procurement Defined
Procurement is the process that is used to deliver
construction project
acquiring or obtaining or by care and effort
- BUY
E.G. Lump Sum Fixed Price

Buy consultants or contractors services
Appoint consultant for Design & manage
Or
Appoint Contractor direct for Design and build

Making a Construction Contract
3 Objectives:
1. Deciding the type of contract & particular
Terms and Conditions under which the work
will be carried out.
2. Selecting the Contractor- capable contractor
3. Establishing the contract Price or how the price
will be arrived at proper price & Value for
money, methods of making payments etc.(
competitiveness etc.)

Contract in construction procurement
The primary purpose of tendering procedure is to :
Select a suitable contractor for a particular
project, and
Obtain an offer of a reasonable tender (price,

completion time and experience) from the relevant
contractor, who would be appropriate for the
proposed project.
This tender will form the basis for a contract

between the client and the contractor
The Basic of Construction Contracts
The two most important people in a Construction
Contract are the Client and the Contractor.
The primary obligation of the client is to pay the
contractor the sum of money which forms the
consideration for the contract.
The basic obligation of the contractor is

to carry out and complete the contract works.
The works are described in the contract documents,
and these documents also lay down the
conditions with which the contractor is to comply

Structure of the
Sale of Goods
Buyer and Seller relationship
BUYER SELLER
(Money) (Goods)
Exchange of goods with money

Structure of Procuring Construction Product
Owner
.
CONTRACT
Contractor
Owner and Contractor Relationship
SALE OF SERVICES e.g. a bridge job

Types of construction contract
Construction contracts may conveniently be
labelled:
1. by the manner the Contractors remuneration is
derived at, ( PAID) or
2. by the nature of the Contractors obligations.
a. Fixed Price contract
i. Lump Sum
ii. Fixed Price plus escalation
b. Bills of Quantities
c. Measure and Value [Estimated BQ]
e. Cost Plus [Prime cost]
f. Design & Build
g. Management Contract
h. Term Contract
It is also possible to have hybrid.
Traditional Construction Arrangement
Management relationship
Contractual relationship (client/professional advisers & contractor)
Contractual relationship (contractor & sub-contractor/supplier
Client
DESIGN
Consultants
Architect, Quantity Surveyors, Engineers, ICT, ID, LS, Planners
CONTRACTOR
CONSTRUCT
Architect, Quantity Surveyors, Engineers, ICT, ID, LS, Planners
Nominated Nominated Domestic Sub- Domestic

subcontractors
1/21/2011 Suppliers
PM Sr. Hj. Ahmad Contractors
Faris Omar Suppliers12
Construction Contracting Methods /
Project Procurement Process
Types of Tender/ tendering methods
Competitive Tendering:
1. Open competition advert paper, class CIDB,
2. Selective competition
Negotiation- I Known C with good record
Other variables: continuity and the stage or
time of calling of tender.
1. Serial tendering
2. Term contracting
3. Fast-Tracking PM Sr. Hj. Ahmad Faris Omar
1/21/2011 13
What is a CONTRACT
In law a contract can be defined as:
A valid contract is a binding

agreement between two or
more parties which creates
legal rights and obligations
which the law will enforce.
Special Features of SMM
IT forms a STANDARD BASIS
a. To accommodate intricacies, complexities and

specificities
b. Need for Standard - Why?

PRIVITY OF CONTRACT
GENERAL RULE EXCEPTIONS TO RULE CIRCUMVENTING RULE
Only a party to a
contract
--may enforce/sue upon it
USE OF COMMON LAW
Kepong Prospecting V COLLATERAL PROVISIONS
-Schmidt CONTRACTS
Express Shanklin Piers V

-Detel products
Implied
EXISTENCE OF STATUTORY
AGENCY ASSIGNMENTS PROVISIONS
RELATIONSHIP
Principal bound by Formal Eg. Insurance Act
contracts entered into assignments bind 1963
by his agent with assignor and
third parties assignee
FIG. : PRIVITY OF CONTRACT
Source: Harban Singh KS, Engineering and Construction Contracts Management; Law and
1/21/2011 Principle, 2002 PM Sr. Hj. Ahmad Faris Omar 16
Express terms
1. The agreement: The written details of the

project and the agreed sum payable for its
completion.
2. The conditions of the contract: These are the
detailed provisions governing the execution
and administration of the project the std FO
Condition.
3. Drawings: Plans and detail designs,
4. Specifications or BQ: Doc describing,
material/workmanship Quality and Quantity of
work

Implied Terms
Implied terms are contract terms which are
not written down in a contract or openly
expressed, but which the law implied.
Eg. The contractor shall execute the work in
a workmanlike manner
STATUTORY TERMS are contract terms

which are imparted into contracts by
legislation,

Design documents
The purpose for producing design documentation:
to obtain development and building approvals
To provide enough information for the contractor
to build
To enable contractor to adequately price for the
works
Basis for contractual and administrative
relationships

The Contract Documents
The std. forms of contract defines what are to be
the contract documents:
The printed form (the Articles of Agreements
and Conditions),
Drawings,
Specifications,
BQ,
Schedules and
Schedules of Rates.
STANDARD FORMS OF CONTRACT
GOVERNMENT/PUBLIC PRIVATE SECTOR INTERNATIONAL

SECTOR CONTRACTS
FIDIC Conditions
ICE Conditions
JKR/PWD MISCELLANEOUS
IEEE Conditions
203 (Rev 10/83 CIDB Form for
building contracts ImechE Conditions
without quantities 2000 Edn
JCT Conditions
203A (Rev 10/83) Modified JKR/PWD
Forms, e.g. LPK,
For NSC MHA etc.
203P (Rev 10/83) BUILDING WORKS CIVIL ENGINEERING M&E WORKS
WORKS
For Nominated
Suppliers PAM 98-Without
Quantities IEM Conditions IEM Conditions
PWD form DB/T (2000
Edn) for Design & Build PAM 98-With Quantities -IEM.CE 1/89 -IEM.ME 1/94
Turnkey Contract
PAM NSC 98 -IEM.CES 1/90 TNB Conditions, etc
Figure 5.1 : Standard Form of Contract (Part II)
1/21/2011 PM KS,
Source: Harban Singh Sr. Hj. Ahmad Faris
Engineering andOmar
Construction Contracts Management; Law21
and Principle, 2002
Contract Document
PAM (With Qties) cls 3.1 PAM (Without Qties) States
States that the CDs that the CDs collectively
collectively refer to the: refer to the:
Contract Drawings, Contract Drawings,

Contract Bills, Specification,
Specification, Descriptive schedules
Summary of Tender, Summary of Tender,
Form of tender, Schedules of Rates
Letter Of Acceptance, Form of tender,
Articles of Agreement, Letter Of Acceptance,
Conditions of Contract and Articles of Agreement,
Appendix Conditions of Contract and
1/21/2011 PM Sr. Hj. Ahmad Faris
Appendix
Omar 22
Drawing
Plans, elevations, sections and details &

site plan and
provide exact dimension of all the
construction elements of the work.
Eg Structural, architectural, Mechanical &

electrical drawings.
Contract drawings as signed drawings
referred to in the contract C/Doc
Specifications
The specs describes in detail (technical) the
std. of workmanship and quality of materials to
be achieved in the construction process.
Normally it is arranged in Trades or Elements of
construction.
The specs is very important document and in

Contracts without Quantities, (drawings and
specs) the specification replaces the contract
bills.
The specs may make requirements for the
method of working to be adopted. (change VO)
Specification
The specification follows the standard
engineering practices and codes covers the
followings:
Specification for materials
Testing of raw materials and finished items
Methods of construction
Quality, workmanship and tolerance needed
Safety precautions to be taken and the likes.

BQ
BQ are also used for cost planning;

projected cash flows and budget, for
valuation of interim payments and
variation orders and for settlement of final
account.

BQ
a bill of quantities or BQ is a document
detailing the qualitative and quantitative
aspects of every constituent parts of a
proposed construction project.
providing details of the prices,
dimensions, etc., of the materials required
to build a large structure,

BQ
Each of these items is complete with the
description of material, labour and
workmanship for the work and its
quantity (NSW Legislative Council,
1991; Marsden, 1998; Seeley, 1997

BQ
BQ is used mainly for project costing and
as part of tender document for soliciting
competitive tenders from contractors. It is
a uniform document for contractors to
estimate or price the work on precisely the
same basis, thus allowing for the fairest
bidding. (Willis et al., 2002).

BQ
BQ are also used for project costing or
estimating, for assessing tenders, price
negotiation; valuation of interim payment
and variation orders and for the settlement
of final account. It is considered as a multi-
purpose document.

BQ
Project cost management processes
include cost estimating, cost planning, cost
monitoring, cost control and cost
information system, for accurate pricing.
essential for preparing project budget and
cash flow, to compute the quantities of
material required for the project, to
prepare labour requirements and
schedules, to claims for payments and to
procure sub-contractors.
BQ
For contractors, any construction project
will involves the process of tendering or
bidding, resources planning (money,
materials, labour, plant), work planning
and execution, procuring of sub-
contractors, supervision, monitoring and
controlling.

BQ
They are useful information for the
contractors project planner to prepare the
work plan or programme for the project
which include organising of activities into
logical sequence and estimating activity
duration. At the same time, the quantities,
unit rate and the cost of the many work
items are useful for the monitoring and
controlling of the project finance.
BQ
cost of various trade contractors work and
projected monthly income and
expenditure, cash flow etc.
information pertaining to the progress and
financial aspects of the projects and
project status

Thank you
BQ preparation, measurement and

work examples will be in the next
session


'Measurement' For PT Perumahan Pembangunan, Bogor 2011

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An overview of the Standard Method of

ASSOCIATE PROFESSOR Sr. AHMAD FARIS OMAR

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 1

Construction Contract Vs SMM

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 2

A contract is a legally binding

(Binding means enforceable by the court)

A building or engineering contract is

E.G. Lump Sum Fixed Price

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 5

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 6

Obtain an offer of a reasonable tender (price,

This tender will form the basis for a contract

The basic obligation of the contractor is

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 8

Exchange of goods with money

Owner and Contractor Relationship

SALE OF SERVICES e.g. a bridge job

Architect, Quantity Surveyors, Engineers, ICT, ID, LS, Planners

Nominated Nominated Domestic Sub- Domestic

A valid contract is a binding

a. To accommodate intricacies, complexities and

b. Need for Standard - Why?

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 15

GENERAL RULE EXCEPTIONS TO RULE CIRCUMVENTING RULE

Express Shanklin Piers V

1. The agreement: The written details of the

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 17

STATUTORY TERMS are contract terms

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 18

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 19

GOVERNMENT/PUBLIC PRIVATE SECTOR INTERNATIONAL

Figure 5.1 : Standard Form of Contract (Part II)

Contract Drawings, Contract Drawings,

Plans, elevations, sections and details &

Eg Structural, architectural, Mechanical &

The specs is very important document and in

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 25

BQ are also used for cost planning;

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 26

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 27

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 28

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 29

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 30

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 32

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 34

BQ preparation, measurement and

1/21/2011 PM Sr. Hj. Ahmad Faris Omar 35

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