AROUND THE BLOCK

1  MASTER BUILDERS JOURNAL 113

Construction Contract
and Management Issues
In this 4th quarter issue of Master Builders Journal for 2018, BKAsiaPacific (Malaysia) Sdn Bhd
(formerly known as BK Burns & Ong Sdn Bhd), a subsidiary of BK Asia Pacific, an international
construction consultancy group providing project, commercial and contractual management services
joins with Entrusty Group, a multi-disciplinary group, collectively named BK Entrusty, to present a
new series of construction contract and management articles in areas related to project, commercial,
contracts, risks, quality, value and the like on “PAM Contract 2018 - Changes and Implications”

BACKGROUND / INTRODUCTION • Introduction

• PAM Contract 2018 vs PAM Contract 2006 – Changes and Implications
Historically, the Pertubuhan Akitek Malaysia Form of Building Contract, • PAM Contract 2018 – With Quantities vs Without Quantities
acronym as “PAM Form” can be traced back to the 1960s, as it was originally • Summary/Conclusion
based on the RIBA 63 Form of Contract used extensively in the United
Kingdom then. Likewise in Singapore, the same form was used and both forms This article is best read with reference and together with relevant
were popularly known as the PAM/ISM 69 and SIA70 Forms, respectively. provisions/clauses under PAM 2006 and 2018 Forms of Contract, copies of
which are available at the PAM Centre, Bangsar, Kuala Lumpur.
In the 1980s, the forms of contract in the UK underwent substantial changes,
resulting in the Joint Contracts Tribunal (“JCT”) forms of contract, popularly PAM CONTRACT 2018 VS PAM CONTRACT 2006 – CHANGES AND
known as the JCT 1980 Forms. Likewise, the Singapore Institute of Architects IMPLICATIONS
(SIA) earlier form was redrafted, by a reputed Queen Counsel, Sir Duncan
Wallace, resulted in the SIA 80 Forms, which underwent several amendments, The comparison below is in respect of PAM Contract 2006 and PAM Contract
subsequently. 2018, both With Quantities contracts, to identify the changes and implications
made to the latter Form.
In Malaysia, the changes to the said PAM/ISM 69 Forms only came about in the
1990s, with PAM 98 Forms, officially launched in October 1998, eventually. 1) Definition (Article 7)
Following the extensive use of the said forms in the Malaysian construction
industry, estimated around 90 percent in the private construction sector, PAM Change is made on the Definition of Service Provider under Article 7(ay)
proceeded to review the said Forms via its Contract Review Committee, by PAM Contract 2006, now is Article 7(ax) under PAM Contract 2018, where
consultations with members and players in the industry for several years. The the word “telephone” is replaced with “telecommunication”, which gives a
result was the introduction of PAM 2006 Forms, with and without quantities broader meaning to Service Provider roles, as it is now not limited to
contracts, which included the nominated subcontract form, known as PAM telephone, but expanded to include internet, wireless system and other
Sub-Contract 2006, in 2007/2008. means of telecommunication.

PAM 2006 Forms have significantly moved away from its predecessor forms, 2) Contract Documents, Programme & As-Built Drawings (Cl 3.3 Copies
including JCT and SIA Forms, with many constructive amendments and of Documents)
changes in terms of time, cost, quality and related procedural requirements
affecting the contractual parties. However, with the rapid advancements and Cl. 3.3 (Copies of documents) is amended, to require Architect and/or QS
changes in terms of construction practice and law over the past ten years, the to provide Contract Drawings and unpriced Contract Bills to the
said Forms needed further improvements and changes to reflect the demands Contractor within 14 days after Contract award. The timeframe of 14 days
and advancements in the construction industry. is introduced to ensure such documents are provided to the Contractor on
time, in failing which or delay to do so, the Contractor is entitled for
Consequently, PAM initiated a review and improvement to its PAM Contract Extension of Time (Cl. 23.8(e)) and Loss and Expense (Cl. 24.3(a)), both are
2006 in August 2015 with the setting up of its Committee and likewise new relevant events added.
consulted and considered feedbacks and issues raised by stakeholders and
changes in the construction industry, which culminated in an updated and PAM Contract 2006 PAM Contract 2018
improved PAM Contract 2018, with and without quantities version, launched Immediately after the execution of the Within fourteen (14) Days after the award of the Contractor or on any
on 11 April 2018. These new Forms considered and adopted several pertinent Contract, the Architect or Quantity date after the award as agreed between the Architect and the
and positive changes/practices, including document transmission, single Surveyor shall without charge to the Contractor, the Architect or Quantity Surveyor shall without charge
Contractor provide him with: to the Contractor provide him with:
retention sum, extension of time reasoning, Construction Payment and a) one of the two signed original a) two (2) copies of the Contract Drawings; and
Adjudication Act (“CIPAA”) implications, expert determination, certifier role in copies of the Contract b) two (2) copies of the unpriced Contract Bills.
Performance Bond, etc. Documents; Within fourteen (14) Days after the execution of the Contract, the
b) two (2) further copies of the Architect or Quantity Surveyor shall also without charge to the
Contract Drawings; and Contractor provide him with one (1) signed copy of the Contract
In this article, BK Entrusty aims to introduce readers to the new PAM Contract c) two (2) copies of the unpriced Documents.
Contract Bills.
2018, its pertinent changes and implications by comparing with its predecessor
PAM Contract 2006, under the following article contents: -
 MASTER BUILDERS JOURNAL 113  2

3) Variations, Provisional & Prime Cost Sums 6) Extension of Time (EOT)

a. Cl 11.1(d) - Definition of Variation a. Cl 23.4 - Certificate of Extension of Time & Cl. 23.6 - Contractor to
prevent delay
Variation definition under amended Cl. 11.1 is now expanded to
include the change in the execution of temporary works, which was not The amended Cl. 23.4 now requires Architect to provide reasons for his
included in the previous version. rejection of the Contractor’s EOT submission. And if the Architect
issues a Certificate of EOT, he needs to provide details within 6 weeks
b. Cl 11.5 - Valuation of Variations and Provisional Sum from receipt of sufficient particulars from the Contractor. This is
another welcome change, as it avoids the ambiguity and argument as to
Cl. 11.5 on Valuation of Variation has been amended to require the why the Architect rejects the Contractor’s application, which is
Contractor to submit complete Variation details and particulars upon commonly practiced in the past Forms. Likewise, when he grants the
completion. If the Quantity Surveyor (“QS”) finds them insufficient extension of time, he needs to provide the necessary details, instead of
within 28 days of its submission, the Contractor is then required to just a “global” or unsubstantiated extension.
submit additional details within a further 28 days to the QS. Subject to
sufficiency of the details and particulars, the QS shall then measure and Another welcome change is the removal of the words, “…..to the
value the Variation within 30 days or extended date as agreed between satisfaction of the Architect…..”, which always has been very subjective
the Architect and Contractor. The said provisions are compared below. and often abused. Further, with the amended Cl. 23.6, it no longer
requires the Contractor to prevent or reduce delay to the satisfaction of
PAM Contract 2006 PAM Contract 2018 the Architect.
All Variations shall be All Variations shall be measured and valued by the Quantity Surveyor. Upon
measured and valued by completion of the Variations, the Contractor shall submit complete details and b. Cl 23.9 - Extension of time after the issuance of Certificate of
the Quantity Surveyor. particulars as required by the Architect and Quantity Surveyor for valuation of
Where any recording of Variations. Where any recording of site information and/or site measurements Non-Completion
site information and/or are carried out at the Site, the Contractor shall provide the Quantity Surveyor
Site measurements are with such assistance as may be necessary to carry out the works and the
carried out at the Site, the Contractor shall be given the opportunity to be present to take such notes and
The amended Cl. 23.9 expressly provides for granting EOT subject to
Contractor shall provide measurements as he may require. If the Quantity Surveyor is of the opinion that Cl. 23.1 to 23.7, which includes:
the Quantity Surveyor with the details and particulars submitted by the Contractor are insufficient to enable • Cl. 23.1 - Submission of notice and particulars for extension of time;
such assistance as may be him to carry out the measurement and valuation, the Quantity Surveyor shall
necessary to carry out the within twenty eight (28) Days from receipt of the Contractor’s submission, • Cl. 23.2 - Delay by Nominated Sub-Contractor;
works and the Contractor inform him of any deficiency in his submission and may require the Contractor • Cl. 23.3 - Insufficient information;
shall be given the to provide such further details and particulars within a further twenty eight (28)
opportunity to be present Days. When the Contractor has submitted sufficient details and particulars, the
• Cl. 23.4 - Certificate of Extension of Time;
to take such notes and Quantity Surveyor shall measure and value the Variations within thirty days • Cl. 23.5 - Other consideration for extension of time;
measurement as he may (30) Days or any other extended date as agreed between the Architect and • Cl. 23.6 - Contractor to prevent delay; and
require. Contractor.
• Cl. 23.7 - Notification to Nominated Sub-Contractors

It must be noted that there is no express provision for any effect or c. Cl 23.10 - Architect’s review of extension of time after Practical
consequence if the QS fails to measure and value variations within the Completion
time frame. Apart from breach of the contract terms, it can imply
professional incompetence or negligence for not doing so. A welcome Under amended Cl. 23.10, PAM deleted the words “(but not obliged
change as all submitted Variations need to be measured and valued to)”, but retains “The Architect may within twelve (12) weeks after the
progressively rather than at the end of construction project period, Practical Completion review and fix a Completion Date later than
which has been a common practice in the industry. that previously fixed,…”, which really is not a significant change, as the
word “may” remained, which itself carry similar meaning. However,
c. Cl 11.6(f ) - Variation Rules with such deletion, it can be inferred that PAM is moving closer to
ensuring that the Architect do review the extensions of time,
Cl. 11.6(f ) on Valuation of Variation in respect of Provisional Quantities notwithstanding.
work is amended to require the QS to re-measure “….based on actual
quantities executed within 60 days after the said works are completed.” Further, PAM introduces new Relevant Events (see below) to both
Whether the 60 days is sufficient would very much be dependent on the Extension of Time and Loss and Expense clauses in line with the
extent of provisional quantities work and time required to complete the amendments made to Cl 3.3 - Copies of Documents, which allow for
re-measurement. the late provision of Contract Drawings and unpriced Contract Bills as
relevant events for extension of time and loss/expense under the
d. Cl 11.9 - Variations and additional expenses added to Contract Sum Contract.
Cl.23.8(e) the Contractor not having received in due time the necessary
The role of the QS in ascertainment of Variations and/or Additional documents under Clauses 3.3(a) and 3.3(b);
Expenses claimed by the Contractor is now added/recognised via Cl.24.3(a) the Contractor not having received in due time the necessary
documents under Clauses 3.3(a) and 3.3(b);
amended Cl. 11.9, in addition to Architect in ascertaining the Variation
amount.

4) Cl 15.2(a) - Certificate of Practical Completion 7) Determination

Amended Cl. 15.2(a) now requires the Architect to “specifying the works a. Cl 25.4(d) Rights and duties of Employer and Contractor
that are incomplete and/or the conditions that have not been complied with”
in addition to the previous requirement of giving reason for his opinion on The amended Cl. 25.4(d) now gives clarification of the amounts payable
non-completion. The additions eliminate/reduce ambiguity and provide to the Contractor upon determination, in line with the recent case of
better/clear details by stating the works that are incomplete and which (Econpile (M) Sdn Bhd v IRDK Venture Sdn Bhd [2017] 7 MLJ 732). The
conditions not complied with. Such change should lessen the High Court held, which subsequently upon appeal, the Court of Appeal
differences/disputes arising from non or delay in the issuance of Certificate upheld the said High Court judgement, that CIPAA Section 35,
of Practical Completion. “conditional payment” is not restricted to the two instances described
in sub-section 35(2). The Parliament has chosen a more expansive
5) Partial Possession By Employer - Cl 16.1(d) Possession of Occupied interpretation by stating a general principle in sub-section 35(1) and
Part with consent used an all-encompassing expression of “any conditional payment
provision”. Accordingly, the Court was of the view that, the “Parliament
The new Form removes the limit to Retention Fund (usually 5%) from the had left it to the court to determine on a case by case basis as to whether
predecessor 2006 Form, hence only a single percentage of total value works, a conditional payment term would be defeating the purpose of CIPAA.
materials and goods in Appendix of Percentage of Certified Value Retained. This meant that the High Court judgement remained good law for the
For further details refer to Cl. 30.5 on Retention Fund hereinafter, which time being, until another similar issue is referred to the Court of Appeal
incorporates similar change. and/or Federal Court, in the near future.
 AROUND THE BLOCK
3  MASTER BUILDERS JOURNAL 113

Furthermore set-off dispute reference to adjudication under PAM, is a

In view of the aforesaid Court judgement, PAM Contract 2006 Cl. condition precedent to arbitration, unless such reference is made after
25.4(d) was held to be a conditional payment clause within CIPAA the Practical Completion date (See Clause 36.1).
Section 35, which renders it void and unenforceable. The said Clause
25.4(d) provides that: b. Cl 30.5 - Retention Fund

“… Until after the completion of the Works under Clause 25.4(a), the The amended Cl. 30.5 (Retention Fund) removes the “Limit of
Employer shall not be bound by any provision in the Contract to make Retention Fund” under earlier PAM versions i.e. “When the sum of the
any further payment to the Contractor, including payments which have amounts so retained equals the amount stated in the Appendix as Limit
been certified but not yet paid when the employment of the Contractor Retention Fund or that amount as reduced under Clause 16.1(d) and
was determined. Upon completion of the Works, an account taking into 16.1(f ) and/or Clause 27.7, as the case may be, then no further amounts
consideration the value of works carried out by the Contractor and all shall be retained by virtue of this clause.”, and replaces it with a single
cost incurred by the Employer to complete the Works including loss “Percentage of Certified Value Retained”, which can be found in its
and/or expense suffered by the Employer shall be incorporated in a final Appendix. There is no more of 10 % Certified Value Retained and 5 %
account prepared in accordance with Clause 25.6” limit of Retention Fund, as practiced under previous forms.

Section 35 CIPAA effectively takes away the contractual right of the This is a welcome change, as it not only avoids the confusion between
paying party to pay only upon the satisfaction of certain conditions and certified value retained and limit of retention fund, it also facilitates
replaced the same with a default payment provision under Section 36 better cash flow in the initial stages of the work progress. However, this
(3) and (4) CIPAA, which provides “The due date for payment under benefit is only applicable if employers maintain retention at the usual 5
subsection (3) is thirty calendar days from the receipt of the invoice.” % and not increase to 10 %, as the latter will almost certainly affects
contractor’s cash flow drastically, particularly when the current market
In the light of the aforesaid case law, which PAM had considered and profit level is below five percent for most contractors.
taken into account of, the amended Cl.25.4 (d) now provides that, “….the
Employer shall not be bound by any provision in the Contract to make any Likewise, under Clause 27 – Nominated Sub-Contractors, the amended
further payment to the Contractor, including payments which have been Cl. 27.7 - Final payment to Nominated Sub-Contractors, similar deletion,
certified but not yet due but excluding payments which have been certified in that “amount stated in the Appendix as Limit of” has been deleted.
and are due but remain unpaid when the employment of the Contractor
was determined.” However, the amended wordings (emphasis 10) Cl. 35 - Expert Determination
underlined), may still be a subject of contention, due to its ambiguity.
PAM Contract 2018 introduces a new provision, “Expert Determination”
b. Cl 25.6 - Final Account upon determination (Cl. 35), as below.

The amended Cl. 25.6, brings forward the final account (final cost) Cl. 35.1 (Disputes on all matters) Cl. 35.3 (Expert determination shall not
incurred to complete the works from six (6) months on completion of At any time, the parties by written agreement may refer any prejudice the parties’ rights to adjudication
disputes on all matters for determination by an expert. or arbitration)
the Works to “….three (3) months on the availability of the final cost Cl. 35.2 (Expert determination under PAM Rules) Prior reference of the dispute under Clause
incurred to complete the Works,….”. This provision is a welcome change If the parties fail to agree on an expert after fourteen (14) 35.1 shall not be a condition precedent for its
Days from the date of the written agreement, any party can reference to adjudication or arbitration by
as it speeds up the overall dispute issues considerably, including apply to the President of Pertubuhan Arkitek Malaysia to either the Contractor or the Employer, nor
payment as the parties need not wait until completion of the Works, appoint an expert. Upon appointment, the expert shall shall any of their rights to refer the dispute to
which could be for a long time. The onerous is now on the Architect or initiate the expert determination in accordance with the adjudication under Clause 36.0 or arbitration
current edition of the PAM Expert Determination Rules or under Clause 37.0 of these Conditions be in
QS to do so within three months upon availability of the final cost any modification or revision to such rules. any way prejudiced or affected by this clause.
incurred to complete the Works.

8) Nominated Sub-Contractor The above Expert Determination provision, which is not condition
precedent to reference to adjudication or arbitration, is meant to be a
a. Cl 27.14 - Contractor permitted to tender for P.C. Sums voluntary process, as it involves an independent Expert to investigate and
gives his expert opinion on any matter referred by disputing parties, who
The amended Cl. 27.14 now requires the Contractor’s prior consent agree to abide by the Expert’s opinion/decision/findings. Such expert
before omission of any P.C. Sums or its award to others. The amended determination, which is usually a thorough and detailed review and finding
clause added, “The Architect may omit any P.C. Sums, which are included of the disputed issue/matter, can be relatively faster and possibly cheaper
in the Contract Bills, provided prior consent of the Contractor has been than CIPAA and/or arbitration reference.
obtained. The Employer shall only be permitted to award the works
related to such P.C. Sums to any other contractors with the consent of the PAM is developing its Panel of Experts and its Expert Determination Rules
Contractor.” Such amendment avoids unscrupulous Employers for use under this new provision.
awarding such P.C. Sum works to others, instead of permitting the
Contractor to tender for the same, which deprives him of doing the said 11) Miscellaneous Changes (ADR clauses)
works and/or profit under P.C. Sums.
PAM Contract 2006 Cl. 34, Adjudication and Arbitration is now separated
9) Certificates And Payment into two provisions in PAM Contract 2018, which are Cl. 36 (Adjudication)
and Cl. 37 (Arbitration). The previous express provision of “The parties by
a. Cl 30.4 Set-off by Employer written agreement are free to refer any other disputes to adjudication.”
under Cl. 34.1 of PAM Contract 2006 is deleted under Cl. 36.1 of PAM
Under PAM 2006 Contract, Cl.30.4 disallows the Employer to set-off Contract 2018.
disputed amount by the Contractor, unless the amount has been agreed
by him or decided by an Adjudicator. This often ends up with the Further, the Mediation provision is now Cl. 34 (previously was Cl. 35 in
Contractor disputing the said set-offs, for adjudication reference PAM 2006), with no change except PAM Contract 2018 requires party to
thereafter. The amended Cl 30.4 empowers the Employer to set-off refer to current edition of PAM Mediation Rules for mediation process.
amount (or its part) not disputed by Contractor instead of agreed Likewise, Arbitration provision (Cl. 37) is similar to PAM 2006 Arbitration
amount only. The disputed amount can still be referred to adjudication provision (Cl. 34.5 to Cl. 34.11) except for a minor addition to amended Cl.
for Adjudicator’s decision prior to set-off, if so decided. The amended 37.3 which refers to “…the current edition of the PAM Arbitration Rules or
clause, added, “The Employer shall only be entitled to set-off the amount any modification or revision to such rules.”
or part of the amount not disputed by the Contractor. The Employer shall
not be entitled to set-off the disputed amount until the adjudicator has 12) Notice
issued his decision.”
The amended Cl. 38.1 on Notice allows for any written notice or other
However, one must note that, adjudication under PAM and its document to be given under the Contract via electronic transmission and
Adjudication Rules is strictly contractual and for set-offs only as it has is deemed to have been duly served upon and received by the addressee at
nothing to do, nor have similar recourse and implications under CIPAA the time of transmission. This is provided for under Cl. 38.2(d) “if
2012, which apart from payment disputes, can include set-offs. transmitted by way of electronic transmission, at time of transmission” and
 MASTER BUILDERS JOURNAL 113  4

38.3(d)” in the case of electronic transmission, that the electronic

transmission was duly transmitted from the dispatching terminal, as On Contract Bills, for With Quantities Form, Article 7 (r) - Contract Bills refers
evidenced by a transmission report generated by the transmitting to Bills of Quantities amongst the Listed documents, but in Without
equipment”. Quantities, it refers to Summary of the Tender (or Contract Sum) and Schedule
of Rates instead. Further under Clause 11, for With Quantities, it refers to
13) Performance Bond Contract Documents, as opposed to Without Quantities, which refers to
– Cl 39.5 Payments from the Performance Bond Contract Bills and Schedule of Rates.
– Cl. 39.6 Return of Performance Bond
The significant differences between the said Forms under Clause 12 are;
A radical change, in that the amended Cl. 39.5 now requires the Architect
to certify the Contractor’s breach or determination of Contractor’s PAM 2018 (With Quantities) PAM 2018 (Without Quantities)

employment prior to the Employer’s action in calling on the Performance Cl. 12 : Contract Bills Cl. 12 : Quality And Quantity Of The Works
Bond. Further, amended cl 39.6 shortens the period of returning the Bond Cl. 12.1 : Measurement of building works Cl. 12.1 : Quality and quantity of the Works
from 28 days to 14 days. Such radical change provides due protection for The quality and quantity of the work The quality and quantity of the work included in the Contract
the Contractor to overcome the Employer unilaterally calling on the included in the Contract Sum shall be Sum shall be deemed to be those which are shown upon the
deemed to be those which are set out in Contract Drawings and/or set out in the Contract Bills. Unless
Performance Bond without default. This change is certainly welcome as it the Contract Bills and unless otherwise otherwise expressly stated, the measurements of Variations and
eliminates On Demand Bond, which is a notorious practice in the expressly stated, shall be prepared in Provisional Quantities shall be carried out in accordance with
accordance with the principles of the the principles of the Royal Standard Method of Measurement of
construction industry. Standard Method of Measurement of Building Works sanctioned by the Institution of Surveyors
Building Works sanctioned by the Royal Malaysia and currently in force.
In summary, the overall changes in the PAM Contract 2018 as opposed to its Institution of Surveyors Malaysia and
currently in force.
predecessor, PAM Contract 2006, are in the following provisions/clauses, as
Cl. 12.2 : Correction of errors or
tabulated below. omissions
Cl. 12.2 : Lump Sum Contract
No. Revisions to PAM Contract 2018 No. Revisions to PAM Contract 2018
Unless otherwise expressly provided, the Unless otherwise expressly provided, the contract is a Lump
1 Article 7 (ag) – Limit of Retention Fund 15 Cl. 24.3(a) - Matters materially affecting the contract is a Lump Sum Contract. Any Sum Contract and shall be deemed to include all ancillary and
regular progress of the Works (Loss and/or error in description, quantity or other works and expenditure, which may or may not have been
Expense) omission of items in the Contract Bills specifically mentioned or described in the Contract Documents,
2 Article 7(ax) - Service Provider 16 Cl. 25.4(d) - Rights and duties of Employer and shall not vitiate the Contract and shall but which are either indispensably necessary to be carried out to
Contractor be corrected by the Architect or bring the Works to completion or which may contingently
Consultant. become necessary to overcome difficulties before completion.
3 Cl. 3.3 - Copies of Documents 17 Cl. 25.6 - Final Account upon determination
4 Cl. 11.1 - Definition of Variations 18 Cl. 27.7 - Final payment to Nominated Sub-
Contractors
5 Cl. 11.5 - Valuation of Variations and 19 Cl. 27.14 -Contractor permitted to tender for P.C. SUMMARY / CONCLUSION
Provisional Sums Sums
6 Cl. 11.6(f) - Valuation rules 20 Cl. 30.4 - Set-off by Employer PAM Contract 2018 is not really a new or radically changed form of contract as
7 Cl. 11.9 - Variations and additional 21 Cl. 30.5 - Retention Fund
there are only several revisions and additions, meant as updates and
expenses added to Contract Sum improvements to its predecessor, PAM Contract 2006, after having consulted
8 Cl. 15.2 - Certificate of Practical 22 Cl. 34 - Mediation and considered the feedbacks and issues raised by stakeholders and changes in
Completion the construction industry.
9 Cl. 16.1(d) - Possession of Occupied Part 23 Cl. 35 - Expert Determination
with consent Having consulted and considered the feedbacks and issues raised by
10 Cl. 23.4 - Certificate of Extension of Time 24 Cl. 36 - Adjudication stakeholders and changes in the construction industry, the updates and
11 Cl. 23.6 - Contractor to prevent delay 25 Cl. 36.1 - Set-off Dispute referred to Adjudication improvements under PAM Contract 2018, in particular the pertinent and
12 Cl. 23.8 - Relevant Events (EOT) 26 Cl. 37 - Arbitration
positive changes and practices such as single retention sum, extension of
time reasoning, expert determination, certifier role in Performance Bond, etc
13 Cl. 23.9 - Extension of time after the 27 Cl. 38 - Notice
issuance of Certificate of Non-Completion are welcome and positive changes for the construction industry. There are
14 Cl. 23.10 - Architect’s review of Extension 28 Cl. 39.5 - Payments from the Performance Bond
several revisions/changes that will have implications on the consultants, in
of time after Practical Completion Cl. 39.6 – Return of Performance Bond particular the Architect and Quantity Surveyors on the contract
administration aspects.

Meantime, PAM Contract 2006 may continue to be used, but it is envisaged

PAM CONTRACT 2018 – WITH QUANTITIES VS WITHOUT that the PAM Contract 2018 is likely to replace it in the near future, similar to
QUANTITIES the earlier predecessor, PAM Contract 1998. That said, an alternative form
promoted in the Malaysian construction industry is the Asian International
Generally, the differences between With and Without Quantities of PAM Arbitration Centre (“AIAC”) Standard Forms of Building Contract (2019
Contract 2018 Forms, are the removal of QS role in Without Quantities Form Edition), which introduce the Contract Administrator role, a significant and
and replacing with the Consultant under several provisions/clauses, such as : radical shift from its predecessor 2018 Form, which was viewed as being
similar to PAM Contract 2006, except for the inclusion of relevant CIPAA
• Cl. 11.8 (Access to Contractor’s books and documents); related provisions therein.
• Cl. 24 (Loss and/or Expense caused by matters affecting the Regular
Progress of the Works); Notwithstanding the changes to the aforesaid standard forms, there is still a
• Cl. 25.5 (Records of Work) under Determination of Contractor’s need for a fairer and more practical form such as the New Engineering
Employment by Employer provision; and Contract (“NEC”) Forms, which are principally based on mutual trust and fair
• Cl. 30.10 (Final Account) under Certificates and Payment provision. contracting, for our Malaysian construction industry.

In the next issue of the MBAM Journal, BK Entrusty article will deal with another pertinent contractual issue affecting
the Malaysian construction industry, on “Essentials of Works Progress Reporting”
 AROUND THE BLOCK
5  MASTER BUILDERS JOURNAL 113

References / Bibliography 5. Econpile (M) Sdn Bhd v IRDK Venture Sdn Bhd [2017] 7 MLJ 732.
1. Agreement and Conditions of PAM Contract 2006 (With Quantities). 6. Asian International Arbitration Centre (AIAC) Standard Forms of Building Contract
2. Agreement and Conditions of PAM Contract 2018 (With Quantities). (2018 and 2019 Editions)
3. Agreement and Conditions of PAM Contract 2018 (Without Quantities). 7. New Engineering Contract (NEC) 4 “Engineering and Construction Contract
4. Agreement and Conditions of PAM Sub-Contract 2018. (2017)”, UK.

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