7.1

CHAPTER 7

CONTRACT MANAGEMENT

Rev Issue Date Amendment Incorporated

First Issue September 2008 1 29 October 2008 Amendment No. 1/2008 2 14 November 2008 Amendment No. 2/2008 3 14 January 2009 Amendment No. 1/2009 4 13 February 2009 Amendment No. 2/2009 5 30 March 2009 Amendment No. 3/2009 6 19 May 2009 Amendment No. 5/2009 7 24 June 2009 Amendment No. 6/2009 8 2 September 2009 Amendment No. 8/2009 9 27 January 2010 Amendment No. 2/2010 10 22 March 2010 Amendment No. 6/2010

2008 Edition

The parts of the PAH shown in blue and boldshould only be updated by Works Branch ofDevelopment Bureau. Amendment No. 3/2009

7.3 2008 Edition

SYNOPSIS

This chapter provides reference and general guidelines on management of civil engineering contracts. It is basically written for capital works contracts and reference is made to the General Conditions of Contract for Civil Engineering Works (1999 Edition). Owing to the complicated and complex nature of contract management, the guidelines provided in this chapter shall in no way be construed as directives overriding the powers and responsibilities of the Engineer/Engineers Representative who shall always make their own decisions under their contracts provision.

7.4 2008 Edition

CONTENTS Page No.

I. ABBREVIATION 7.16 II. GLOSSARY OF TERMS 7.19

1. ACTION CHECKLIST AT COMMENCEMENT OF CONTRACT

7.20

2. ACTION CHECKLIST ON COMPLETION OF CONTRACT

7.23

3. THE SITE 7.24 3.1 HANDING OVER TO CONTRACTOR 7.24 3.2 JOINT SURVEY AND SETTING OUT 7.24 3.3 MANAGEMENT 7.25 3.4 SECURITY 7.26 3.5 PROJECT SIGNBOARD 7.26 3.5.1 Size and Location 7.26 3.5.2 Details of Project Signboard 7.26 3.5.3 Erection, Maintenance and Removal 7.27 3.6 TEMPORARY UTILITY SUPPLIES 7.27 3.7 RE-POSSESSION ON COMPLETION 7.28

4. SUPERVISING PERSONNEL 7.29 4.1 ENGINEERS STAFF 7.29 4.2 CONTRACTORS STAFF 7.29 4.2.1 Technical Resources and Site Supervision Structure 7.29 4.2.2 Site Agent 7.29 4.2.3 Surveyor 7.29 4.2.4 Safety Officer 7.30 4.2.5 Technician Apprentices and Building and Civil

Engineering Graduates 7.30

4.2.6 Qualified Tradesmen and Intermediate Tradesmen 7.31

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4.3 SUPERVISION FOR GEOTECHNICAL WORKS 7.31 4.4 SUPERVISION FOR PILING WORKS 7.33 4.5 EMPLOYMENT OF LABOUR RELATION OFFICER (LRO)

(Amendment No. 6/2010)

7.33

5. RECORDS 7.34 5.1 GENERAL 7.34 5.2 CONTRACT DOCUMENTS 7.34 5.3 RECORD DRAWINGS 7.35 5.4 SITE DIARY 7.35 5.5 SITE MEASUREMENT BOOK 7.36 5.6 PROGRESS CHART 7.36 5.7 INCLEMENT WEATHER 7.37 5.8 SITE INSTRUCTIONS 7.37 5.9 DAYWORKS 7.37 5.10 INVENTORY OF FURNITURE AND EQUIPMENT 7.37 5.11 MINUTES OF MEETINGS AND CORRESPONDENCE 7.38 5.12 RECORD PHOTOGRAPHS 7.38 5.13 REQUEST FOR INSPECTION AND SURVEY CHECK 7.39 5.14 RECORD OF MATERIALS AND EQUIPMENT PROVIDED

BY GOVERNMENT 7.39

5.15 MATERIALS TESTING 7.39 5.16 LABOUR RETURNS AND WAGES 7.40 5.17 USE OF CONTRACT TRANSPORT 7.41 5.18 MISCELLANEOUS RECORDS 7.41

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5.19 CUSTODY AND DISPOSAL 7.44

6. PROGRAMME, PROGRESS AND EXPENDITURE 7.45 6.1 CONTRACTORS PROGRAMME AT COMMENCEMENT 7.45 6.2 PROGRAMME UPDATING AND REVISION 7.45 6.3 MONITORING AND REPORTING PROGRESS 7.45 6.4 ACTION IN CASE OF SLOW VARIABLE PROGRESS 7.46 6.5 MONITORING AND ESTIMATING EXPENDITURE 7.46 6.6 AUTHORITY TO INCREASE CONTRACT SUM 7.48 6.7 SECTIONS SUBJECT TO EXCISION (Amendment No. 1/2009) 7.49 6.8 MINOR WORKS (Amendment No. 6/2009) 7.49 7. CONTRACT PAYMENTS 7.50 7.1 ARRANGEMENT FOR PAYMENTS TO CONTRACTOR 7.50 7.2 INTERIM PAYMENTS 7.50 7.2.1 General Principles 7.50 7.2.2 Procedure 7.51 7.2.3 Minimum Amount 7.53 7.2.4 Contract Price Fluctuation 7.54 7.2.5 Deductions 7.54 7.3 FINAL PAYMENTS 7.54 7.4 MISTAKES IN PAYMENTS 7.55 7.5 OVERDUE PAYMENTS 7.56 7.6 RE-ENTERED CONTRACTS 7.56 7.7 INTERIM MEASURES TO ASSIST THE CONSTRUCTION

INDUSTRY (Amendment No. 2/2009) 7.56

8. EXTENSION OF TIME FOR COMPLETION AND LIQUIDATED DAMAGES

7.57

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Page No.

8.1 EXTENSION OF TIME FOR COMPLETION 7.57 8.1.1 General Principles 7.57 8.1.2 Reasons for Extension 7.59 8.1.3 Procedure 7.60 8.2 LIQUIDATED DAMAGES 7.60 8.2.1 Authority 7.60 8.2.2 General Principles 7.60 9. SITE MEETINGS 7.62 9.1 OBJECTIVE 7.62 9.2 FREQUENCY 7.62 9.3 TYPICAL TOPICS 7.62 9.4 RECORDS 7.62

10. LIAISON WITH OTHERS 7.63 10.1 LIAISON WITH UTILITY COMPANIES, GOVERNMENT

DEPARTMENTS AND OTHERS 7.63

10.2 FACILITIES FOR THE BLIND 7.64

11. SITE SAFETY 7.65 11.1 RESPONSIBILITY 7.65 11.2 CONTRACTORS SAFETY ORGANISATION 7.65 11.3 MONITORING AND LIAISON WITH LABOUR

DEPARTMENT AND MARINE DEPARTMENT 7.65

11.4 CHECKING AND AUDITING OF TEMPORARY WORKS 7.66 11.5 REPORTING OF SITE INCIDENTS AND ACCIDENTS 7.67 11.6 SPECIAL PRECAUTIONS WITHIN RAILWAY RESERVES 7.69 11.7 REGULATING ACTIONS ON CONTRACTORS

CONVICTED OF SITE SAFETY OFFENCES OR INCURRING SERIOUS INCIDENTS ON SITE

7.69

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Page No.

11.8 DEPARTMENTAL SAFETY AND ENVIRONMENTAL ADVISER

7.70

11.9 CONSTRUCTION SITE SAFETY MANUAL 7.70 11.10 PAY FOR SAFETY AND ENVIRONMENT SCHEME 7.70 11.11 SCORE CARD FOR ASSESSMENT OF SITE SAFETY

PERFORMANCE 7.71

11.12 SITE SAFETY CYCLE 7.72 11.13 SAFETY TRAINING 7.73

12. ENVIRONMENTAL PROTECTION 7.73 12.1 NOISE CONTROL 7.73 12.1.1 Working Within Restricted Hours 7.73 12.1.2 Processing of Construction Noise Permit 7.73 12.1.3 Monitoring Noise Control Measures 7.73 12.1.4 Sanctions Against Offences 7.74 12.2 PREVENTION OF WATER POLLUTION 7.74 12.2.1 Water Pollution Control Ordinance (Cap. 358) 7.74 12.2.2 Dumping at Sea Ordinance (Cap. 466) 7.74 12.3 PREVENTION OF AIR POLLUTION 7.74 12.3.1 Classification of Works 7.75 12.3.2 Notification 7.76 12.3.3 Control of Works 7.77 12.4 ENVIRONMENTAL PERMIT 7.77 12.5 CONSTRUCTION AND DEMOLITION (C&D) MATERIAL 7.77 12.5.1 Dumping Licences 7.77 12.5.2 Trip-ticket System 7.78 12.5.3 Waste Management Plan 7.78 12.5.4 Construction Waste Disposal Charging Scheme 7.79 12.6 REGULATING ACTIONS ON CONTRACTORS

CONVICTED OF ENVIRONMENTAL OFFENCES 7.79

12.7 SITE CLEANLINESS, TIDINESS AND CONTROL ON

MOSQUITO BREEDING 7.80

12.8 USE OF PFA AS GENERAL FILL IN RECLAMATION 7.80

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12.9 ENVIRONMENTAL MANAGEMENT 7.81

13. VARIATIONS 7.83 13.1 AUTHORITY FOR VARIATIONS 7.83 13.2 VARIATION ORDERS 7.84

13.3 VALUATION OF VARIATIONS 7.84 13.4 EXECUTION OF WORK OUTSIDE THE ORIGINAL SCOPE

OF THE CONTRACT AND CHANGES TO CONTRACT TERMS AND CONDITIONS

7.85

13.5 VARIATIONS AFFECTING ENVIRONMENTAL PERMIT 7.86

14. CONTRACTUAL CLAIMS 7.87 14.1 GENERAL 7.87 14.2 HANDLING OF CLAIMS 7.87 14.3 AUTHORITY TO SETTLE CLAIMS 7.89

15. REPORT ON CONTRACTORS PERFORMANCE 7.90 15.1 OBJECTIVE 7.90 15.2 PROCEDURE AND GUIDANCE 7.90

16. DETERMINATION OF CONTRACTORS EMPLOYMENT

7.92

16.1 GENERAL 7.92 16.2 WARNINGS PRIOR TO DETERMINATION OF

CONTRACTORS EMPLOYMENT 7.92

16.3 ACTION TO EFFECT DETERMINATION OF

CONTRACTORS EMPLOYMENT 7.93

16.3.1 General 7.93 16.3.2 Actions upon the Serving of a Notice of Determination

of Contractors Employment 7.93

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16.3.3 Actions upon Determination of Contractors Employment

7.94

16.3.4 Actions after Determination of Contractors Employment

7.94

16.4 CHECK-LIST FOR ACTIONS REGARDING

DETERMINATION OF CONTRACTORS EMPLOYMENT 7.97

17. DAMAGE REPAIRS AND EMERGENCY WORK 7.101 17.1 DAMAGE REPAIRS GENERALLY 7.101 17.2 DAMAGE TO CROPS AND PROPERTY ON

AGRICULTURAL LANDS 7.101

17.3 EMERGENCY WORK 7.101 17.4 REPORTING OF MAJOR EMERGENCY INCIDENTS 7.102

18. PROCEDURE ON COMPLETION OF WORKS 7.103 18.1 PRIOR TO ISSUE OF CERTIFICATE OF COMPLETION 7.103 18.1.1 Criteria for Assessing Completion 7.103 18.1.2 Handing Over Completed Works 7.103 18.1.3 Liaison with DLO 7.105 18.1.4 Outstanding Works 7.105 18.2 CERTIFICATE OF COMPLETION 7.105 18.2.1 Procedure 7.105 18.2.2 Standard Forms 7.106 18.2.3 Partial Completion 7.106 18.2.4 Release of Surety Bond and Security Deposit 7.106 18.3 MATTERS DURING MAINTENANCE PERIOD 7.107 18.3.1 Working During the Maintenance Period 7.107 18.3.2 Inspection Before the End of the Maintenance Period 7.107 18.3.3 Maintenance Certificate 7.108 18.3.4 Release of Retention Money 7.108 18.3.5 Report on Completion of the Contract 7.108 18.3.6 As-constructed Survey 7.109 18.3.7 Information for Maintenance Authority 7.109 18.3.8 Electronic Drawings 7.110 18.4 POST-COMPLETION (Amendment No. 1/2009 & 2/2010) 7.110 18.4.1 Post-completion Review 7.110 18.4.2 Works Contracts with Significant Amount of Omitted

Items (Amendment No. 2/2010) 7.111

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19. DEDUCTION OF MONIES FROM GOVERNMENT CONTRACTS

7.112

19.1 GENERAL 7.112 19.2 ADMINISTRATIVE PROCEDURE 7.112 20. CONTRACTS INVOLVING DESIGNS BY

CONTRACTOR 7.114

20.1 ALTERNATIVE DESIGNS FROM CONTRACTORS AFTER

CONTRACT AWARD 7.114

20.2 DE