TOPIC 11 Contract Closeout and Final Payment, Slides of Construction management

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Contract Closeout &

Final Payment

ECM578- Contract Administration

Prepared for Dr. Mazlina Zaira Mohammad

P1: 5 P2: 5 P3: 4 P4: 4 18 /

Prepared by :

..just incase you dont know us ehe

Nur Myshara Zulkarnain Harun

Muhamad Azeez Mu'meen B Ishak

Muhammad Ubaidullah B Md Ramli

What is Contract Closeout? The completion of the contract and related inspection, correction and acceptance of the work.

Contractor Performance

Submittal of all required

documentation

review of the insurance

claim file

Settlement of all

subcontractores

Inspection

Cost audit

Major

element in

closeout

Process

contract changes, claims,

and final quantities

delivered

liquidated damages

Definition of payment Advance Advance PaymentPayment A sum of money lent by the client of the contractor in the early stages of construction as financial aid for the work and repayment to the client through an interim payment deduction

Final Final paymentpayment

The payment to be made to the contractor or the client of the works described in the contract after all the contract price adjustment has been done.

Interim Interim paymentpayment

A sum payable to the contractor on a regular basis as specified in the standard form of contract for the value of work, which has been completed plus material supplied and any other eligible items accounted by the contract.

All the 'set- off'/deduction to which the employer is entitled must have been ascertained All the claims to which the contractor is entitled must have been evaluated Final account

in order for the final account to be formalized

the following condition must be satisfied.

The contractor must have fulfilled his obligation under the contract

The final measurement

and valuation of the

executed work must

have been satisfactory

completed

NOTIFY CONTRACT

ADMINISTRATION

1 2 3

ESTABLISHING THAT A WORK

IS COMPLETED

CHECKLIST PREPARATION

Project Manager responsible to

determine contract is completed

and ready for closeout

Showing all the contract

deliverables, submittals and

indicating on the checklist

Project Manager notify the

contract administrator by

memorandum

Reviewed Inspected Accepted Required deliverables have been inspected and inspected

Contract is completed

Lawful subject matter

Parties Involved Offer Checklist of completed contract Acceptance

Mutual obligation

Mutual of agreement

Valuable consideration

Checklists should containt several items, including: Example of a completed checklist

Contract Closeout Report Purpose: to identify the variances from the baseline plans in terms of assess the success of the project and also documents articulates methods for improvement formulates lessons learned and best practices from project performance, project cost, and schedule. project deliverables feedback Why is it important? As a reference point for future projects that include Develop ways to streamline tasks to improve Better allocation of resources for future projects similar tasks or goals efficiency in future projects using real data Project Manager

Consistently superior contractor performance reports may lead to more tendering opportunities for the contractor in future projects Pre-construction Construction (Administration, Safety & Quality) Completion Time Contractor performance is evaluated on: Insurance and Performance Bond Work Programme Method statement Quality plan and organisation chart CIDB Levy & DOSH Registration Timely commencement Sufficient workforce Sufficient equipment, Timely progress and Timely Response to and supervisors machineries and plant Quality Reports Submission S.O.'s instructions Administration Proper signage/barriers Proper housekeeping Personal Protective Zero accident/injury Equipment (PPE) usage Safety Quality

Compliance to specifications

Monthly meetings & inspections

Response to complaints or notices

Ahead On time Delay

Process of contract administrator

check the

final amount of the cost before

proceed to

payment.

Certification by contract

administrator that a

construction contract has

fully completed

FINAL PAYMENT responsible? Contract Administrator ( C A ) Final account Process of calculating and make any adjustment to the contract sum to make sure amount of Final Payment can be determined. Final Payment (^) Final Certificate

Before proceed to payment Contract Administration should:

Make sure all administrative steps are done Make use of contract closeout checklist Required inspection performed Memorandum from Project Manager

Must be a

Standard statement

prepared by grantee's Legal counsel Must contain Certification as a proof the contractors has paid its subcontractors & Supplier Final contract amount agreed by both parties

Signed by

Corporate official

authorized

General release need to be done before final payment Assures the grantee that there will be no future claims from the contractors Any changes must be reviewed by the Legal Counsel

Necessary for

grantee &

contractor to

have resolved all

open issue of

finacial

F L O W

Problem of Contractor who Quit Work

Contractor lacks

sufficient financial

incentive to

complete the

contract

Contractor

awarded another

contract

Contractor have a

problem with the

client

(Miscommunication)

Contractor

failing to

perform in a

timely manner

Possible reason

Warranty & Guarantee Register Each individual item of equipment & system Pertinent section in Contract specification Name of company that provide the warranty Expiration date of the warranty Address of the providing company