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Letter Of Intent To Award Construction Contract for Malaysia

Letter Of Intent To Award Construction Contract Template for Malaysia

A formal pre-contractual document used in the Malaysian construction industry that communicates the employer's intention to award a construction contract to a selected contractor. This document operates within the framework of Malaysian construction law, particularly the Construction Industry Development Board Act 1994 and the Contracts Act 1950. It typically outlines the agreed scope, value, and key terms of the proposed construction contract, while establishing any conditions precedent to the formal contract award. The document serves as a crucial intermediate step between tender acceptance and formal contract execution, providing certain preliminary rights and obligations to both parties.

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Letter Of Intent To Award Construction Contract

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What is a Letter Of Intent To Award Construction Contract?

The Letter Of Intent To Award Construction Contract is a standard practice in the Malaysian construction industry, used after the completion of tender evaluation and selection of the preferred contractor, but before the execution of the formal construction contract. This document is particularly important in large-scale construction projects where there may be a significant time gap between contractor selection and formal contract execution. It typically includes key commercial terms, conditions precedent, and sometimes limited authority to proceed with preliminary works. Under Malaysian law, while not intended to be the final construction contract, it can create certain binding obligations between parties. The document must comply with the Construction Industry Development Board Act 1994 and related regulations, while considering standard industry practices and requirements of relevant professional bodies. It serves as a critical risk management tool by clearly documenting the parties' intentions and any pre-contract conditions.

What sections should be included in a Letter Of Intent To Award Construction Contract?

1. Letter Header: Company letterhead, date, reference number, and addressee details

2. Project Identification: Clear identification of the construction project, including project name, location, and reference numbers

3. Tender Reference: Reference to the tender submission and any subsequent negotiations or modifications

4. Intent Statement: Clear statement of intention to award the construction contract, subject to conditions

5. Contract Value: Statement of the agreed contract sum and any applicable taxes

6. Scope of Works: Brief description of the construction works to be performed

7. Timeline: Expected date for formal contract execution and project commencement

8. Conditions Precedent: List of conditions that must be fulfilled before formal contract award

9. Closing and Signature: Formal closing, signature block, and company stamp

What sections are optional to include in a Letter Of Intent To Award Construction Contract?

1. Performance Bond Requirement: Include when a performance bond is required before contract award

2. Insurance Requirements: Include when specific insurance coverage must be secured before contract award

3. Confidentiality Statement: Include when dealing with sensitive projects or when required by organizational policy

4. Limited Authority to Proceed: Include when preliminary works are authorized before formal contract execution

5. Parent Company Guarantee: Include when dealing with subsidiary companies or special purpose vehicles

6. Local Authority Requirements: Include when specific local authority approvals or permits are needed before contract award

What schedules should be included in a Letter Of Intent To Award Construction Contract?

1. Schedule A - Key Commercial Terms: Summary of main commercial terms agreed during tender negotiations

2. Schedule B - Preliminary Works Schedule: If applicable, list of authorized preliminary works

3. Schedule C - Required Documentation: List of documents required for formal contract execution

4. Appendix 1 - Project Timeline: Key dates and milestones for contract execution and project commencement

5. Appendix 2 - Insurance Requirements: Detailed insurance requirements and coverage limits

6. Appendix 3 - Performance Bond Format: Prescribed format for the performance bond if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Letter of Intent

Cost

Free to use
Relevant legal definitions



































Clauses

























Relevant Industries

Commercial Construction

Residential Development

Infrastructure Development

Industrial Construction

Healthcare Construction

Education Facilities

Retail Development

Hospitality Construction

Government Buildings

Mixed-use Development

Transportation Infrastructure

Energy and Utilities

Relevant Teams

Legal

Procurement

Project Management

Commercial

Operations

Risk Management

Finance

Business Development

Technical Services

Contract Administration

Relevant Roles

Project Director

Construction Manager

Contracts Manager

Project Manager

Commercial Director

Legal Counsel

Quantity Surveyor

Chief Executive Officer

Managing Director

Technical Director

Procurement Manager

Risk Manager

Business Development Manager

Operations Director

Chief Financial Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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