Subcontractor Agreement Malaysia

Subcontractor Agreement Malaysia

If, as a “national subcontractor,” there is one who traditionally has no other role to play in the selection and appointment of the employer than to give consent, where necessary under the terms of the main contract. The appointment of the subcontractor is considered to be an entirely in favour of MC (a “national matter”) the procedure by which the employer designates, selects or approves the person who performs a subcontractor or a specialized trade role called a designated subcontractor (“NSC”). The NSC then enters into a subcontract with the contractor (“MC”). It is a way for the employer to maintain some control over the choice of the contractor or the specialized supplier, without necessarily being directly involved in detailed contractual agreements with the specialist. The appointment is used because there are benefits to the employer in the use of the system. The main benefit to the employer is the control of selection and performance required by the NSC. Above all, the employer reserves the choice of subcontractor. Under the fidic contract conditions for construction work (4th edition 1987) (“Red Book 4th”), it acknowledges that the omission of NSC can have serious consequences for both the MC and the employer. It is therefore important to ensure that the subcontractor is authorized and ready to cooperate with the subcontractor. Therefore, MC does not need to use any NSC.

Although MC delegated part of the work to its domestic subcontractors, MC remains entirely responsible to the employer for this work. The employer does not in any way take the risk of a subcontractor failure. Mc is also directly responsible for the payment and their basic cooperation directly with the national subcontractor. Another advantage is the potential for reduced supply times. Some specialized subcontracting work requires a longer delay than the construction program would allow this work to begin before mc has been selected. The appointment allows for continuity if a specialized subcontractor has been selected prior to the MC`s implementation. The true nature of the NSC`s works and their impact on programming are often only highlighted when the appointment takes place, which may happen too late in the MC`s own works and certainly after the terms of the main contract are pimped out. In addition, the employer can, if it wishes, control the terms of the subcontracting, including the price and extent of NSC`s work. 2 Leave the work that is the subject of the appointment out of the main contract and have it carried out by an independent contractor.

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