IEM Form of Contract (1989)

The Institute of Engineers, Malaysia or IEM Forms of Contract is produced in three standard
forms:
1) IEM Conditions of Contract for Works mainly of Civil Engineering Construction.
2) IEM Standard Conditions of Sub-Contract for use in conjunction with IEM Condition
of Contract for Works of mainly Civil Engineering Construction.
3) IEM Conditions of Contract for Mechanical and Electrical Works.
The IEM forms of contract are essentially hybrid forms of the Institute, except for the
Mechanical and Electrical standard form which follows the corresponding FIDIC standard
form. These form standard forms of contract are at this time the only domestic standard form
of contract which are published for the use in private sector civil engineering and Mechanical
& Electrical Engineering contracts in Malaysia. There use is diminishing and now they are
used primarily for substructure works and infrastructure works on larger developments. All
the IEM standard forms are re-measurement contracts and contain many provisions which are
similar to those as contained in the PWD standard forms of contract which place substantial
obligations on the Contractor above those commonly contained in FIDIC or similar
international contract forms.
This clause is the definition clause of the IEM Conditions of Contract (hereinafter in this
Commentary as the Conditions). It is noted that only a few of the often-repeated words are
defined in this clause. This, I submit, is a good practice compared to other contracts such as
PLUS Conditions of Contract where the draftsman has attempted to put up a formidable list
of definitions. This, though not without its advantages, may carry the dangers that meanings
and construction not intended for certain words and/or phrases may unintentionally creep in.
This is more so when Contract or Contract Documents means a series of documents
which, more often than not, are drafted by different individuals.
Realising the rigours and pitfalls of the JKR forms and the unsuitability of the PAM forms for
primarily engineering and infrastructure projects, practitioners in the
engineering/construction field attempted to employ various British engineering forms such as
the ICE Forms, IMECHE forms, IEE forms, JCT forms and to a lesser extent, FIDIC forms.
Modifications to these forms were undertaken on a job specific and ad hoc basis leading to
much uncertainty and disputes in the local engineering industry.
The Institution of Engineers, Malaysia (IEM) then stepped in to rectify the seemingly
confusing situation and addressed the lacuna in this area of the industry by drafting and
publishing a series of Standard Forms for engineering works procured by way of traditional
general contracting. The process commenced in 1989 with the advent of the first form and
five years later a much awaited form for Mechanical and Electrical works made its debut.
To date IEM has published three main forms:
IEM.CE 1/89: IEM Conditions of Contract for Works mainly of Civil Engineering
Construction (Second Reprint September 1994). This has recently been replaced with
the IEM.CE 2011: IEM Form of Contract for Civil Engineering Works (Second
Edition, July 2011).
 IEM.CES 1/90: IEM Standard Conditions of Sub-contract for use in conjunction with
the IEM Conditions of Contract for Civil Engineering Works (First Reprint
September 1994); and
IEM.ME 1/94: IEM Conditions of Contract for Mechanical and Electrical Works
(First Edn 1994).
Markedly absent is the IEM Standard Conditions of sub-contract for use in conjunction with
the IEM Conditions of Contract for Mechanical and Electrical Works.
The IEM Standard Conditions of Contract are used essentially for:
i) Private sector projects
ii) Civil Engineering, Mechanical and Electrical Works
iii) Contracts procured under the Traditional General Contracting (TGC)
procurement route.
However, they do not cater for the following contracts:
i) Package deal type/ turnkey type of contracts
ii) Management types of contracts, such as management contracting and construction
management.
iii) Domestic sub-contracts
iv) Serial contracts
v) Periodic/term contracts
vi) Continuation contracts
vii) Other miscellaneous types of contracts.
The IEM Forms, in addition, also do not cover building contracts as there is a desire not to
duplicate the existing PAM Forms (and perhaps the new CIDB form)
With the emergence of CIDB as the new source of Standard Forms for the construction
industry, it is anticipated that IEM may not, in the near future, draft and publish any new
forms. However, for engineering works (as distinct from construction works), IEM will still
be looked upon as a source of the relevant Standard Forms within the local context. Attempts
have been made over the years to review and revise the above forms. Although drafts of these
forms have been generated, these have to date not been finalised for publication except for
the recently published IEM.CE 2011.