Letter of Award By Developer to Contractor [270606]

Ref. No:                   Date:    [Insert Date]

[Company Name]
[Insert Address]

Dear Sir,

RE:    Letter of Award


We are pleased to inform you that your tender for the above works is accepted and hereby award to you the contract for the construction and completion of the abovecaptioned project (“the Works”) for the fixed lump sum of [Insert Amount] (Ringgit Malaysia ) only (“the Contract Sum”) subject to the following terms and conditions:-

1.    Summary of Tender



d.    Preliminaries                            

       Total Contract Sum  

2.    The form of contract between the parties herein shall be the Standard PAM 1998 Conditions of Contract (Private Edition Without Quantities) together with the supplementary clauses, note and modification as provided in the Contract Documents, a copy of which shall be executed by parties in due course.

3.    The Contract Documents for the Works shall include but is not limited to the following:-

a.    The contents of this letter;
b.    Construction drawings, specifications, bill of quantities and other documents submitted by you in your tender, except for items modified or overridden by the contents of this letter explicitly or impliedly.

4.    Liquidated and ascertained damages (“LAD”) shall be calculated at RM5,000.00 per day for any delay in the completion of the Works whether in whole or in part.

5.    The Contract Sum shall be fixed Lump Sum based on contract drawings and specifications.  No additional claims for times or expenses will be entertained in the event of discrepancies, conflicts, divergence’s in the drawings and specifications.

6.    No fluctuations in the Contract Sum shall be allowed in respect of the rise or fall of the costs of materials, labor, fuel, plants, taxes, government duties, exchange rates, statutory fees, etc arising throughout the duration of this contract.

7.    The defect liability period shall be eighteen (18) months from the delivery of Vacant Prossession to the individual purchaser of each of the units of houses comprising the abovecaptioned project.

8.    The Retention Sum shall be 10% of the interim payment as provided in Appendix A.

9.    As conditions precedent to the commencement of works, you are required to:-

a.    Deposit with us copies of the insurance policy for public liability (i.e. insurance against injury to persons and damage to property) of an insured value not less than RM 11,000,000.00 and receipts of premium paid;
b.    Deposit with us copies of insurance policy for workman compensation of an amount not less than RM 1,650,000.00 (being 15% of the Contract Sum) and receipts of premium paid;
c.    For the purpose of commencement of the works and no other, you may produce to us the cover notes of the insurance policies and receipts paid;
d.    Furnish us with registration numbers and list of your workmen registered with the Employee’s Social Security Scheme.
e.    Comply with Part VII of Lembaga Pembangunan Industry (Levy Collection) Regulation 1996 and shall submit a notification in Form CIDB K1/96 to the Lembaga not later than 14 days after the acceptance of this letter of award or not less than 14 days before the commencement of works, whichever date is the earlier.  You shall bear any costs required thereunder without any reimbursement from us;
f.    Use all endeavors to employ only Malaysian citizens in completing the Works.  In the event you employ foreign labor, you shall ensure full compliance with prevailing relevant laws and regulations for such labor and pay all fees and levy required.  You shall maintain on site at all times during progress of the Works and up to date register containing particulars of all workers employed by you.  You shall fully and unconditionally indemnify and hold us harmless against all claims, penalties, fines, damages, costs expenses and proceedings arising from any breach or contravention of any laws and regulations referred to in this clause.

10.    You shall observe strict control over your workmen to ensure site cleanliness and orderliness of work sequence.  All materials for the Works shall be properly stacked and protected at approved location without creating obstruction to others.  You are to ensure that your workmen exercise due care when using the public roads and shall be held responsible for any damage caused to the same, the repair cost of which shall be borne by you.  You are also to ensure that all back filling and reinstatement of completed roads are to our satisfaction and also to the satisfaction of the relevant local authorities.

11.    The schedule of Payment shall be as follows:-

a.    You shall submit regularly your monthly progress payment by month end to the Developer, the developer site personnel will verify the amount of claimable work done, whereby amount payable will be issued based upon the schedule of payment in Appendix B and upon recommendation and certification from the Consultant Engineer and Architect.
b.    All payment shall be made within 30 days from the date of certification by the developer.

12.    The date of the Possession of Site shall be 15th June 2006.

13.    The Completion Period shall be within 15 months from the date of possession.  Hence, the date of completion of the Works shall be on or before 14th September, 2007.

14.    The formal contract documents are being prepared and you shall be notified in due course to execute the same.  Pending formalization of the contract, this letter of award shall constitute a legal and binding contract between you and Northern Elevator Berhad.

This letter is sent to you in triplicate.  Please confirm your acceptance by signing all copies and returning the same to us immediately.  Please initial every page of this letter.

Yours faithfully,
Northern Elevator Berhad

Managing Director

We,[Company Name] hereby confirm our acceptance to the above terms and conditions and accept the appointment as main contractor for the project.

(Signature of Main Contractor)                

Name:  …………………………..

I.C. No:  ………………………………..

Designation:  …………………………..

Date:  …………………………………..

In the presence of:-


Name:  …………………………

I.C. No:  ……………………….


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