CIPAA NEWS & RESOURCES

---

Construction projects in Malaysia often involve tight deadlines and significant financial investments. As a result, it is essential to ensure that projects are completed within the stipulated time frame to avoid Liquidated Ascertained Damages (LAD) penalties. LAD is a provision in construction contracts that allows the employer to claim damages from the contractor for any delay in the completion of the project beyond the agreed-upon completion date. Here are some ways to avoid LAD in a construction project in Malaysia.

1. Establish a realistic project timeline to avoid LAD One of the most common causes of LAD in construction projects is an unrealistic project timeline. It is crucial to establish a realistic project timeline that takes into account factors such as weather, material availability, and unforeseen delays. This can help to avoid LAD penalties that may be incurred due to project delays.
2. Regularly monitor progress to avoid LAD Regular monitoring of project progress is critical to ensure that the project is on track and any potential delays are identified early. This can be achieved through regular site visits, weekly progress reports, and daily communication with contractors and subcontractors. By keeping a close eye on progress, project managers can identify potential problems and take corrective action before they turn into delays, which could lead to LAD penalties.
3. Proper planning and coordination can help to avoid LAD Proper planning and coordination are essential for ensuring that all aspects of the construction project are carried out efficiently and on time. This involves coordinating various aspects such as material delivery, workforce availability, and equipment availability. A well-planned and coordinated project will help to ensure that the project runs smoothly and is completed within the agreed-upon timeline, thereby avoiding LAD penalties.
4. Efficient communication can help to avoid LAD Efficient communication is vital for ensuring that all stakeholders in the project are aware of progress and any potential delays. This involves regular meetings, progress reports, and daily communication with contractors and subcontractors. By maintaining open communication channels, project managers can identify any potential problems and take corrective action before they turn into delays, which could lead to LAD penalties.
5. Identify potential risks to avoid LAD Identifying potential risks and developing a plan to mitigate them is critical for avoiding LAD in construction projects. This involves identifying potential risks such as inclement weather, material shortages, and workforce availability. By developing a risk mitigation plan, project managers can take proactive measures to avoid delays and ensure that the project is completed within the agreed-upon timeline, thereby avoiding LAD penalties.
6. Ensure compliance with contractual requirements to avoid LAD To avoid LAD penalties, it is crucial to ensure compliance with all contractual requirements, including deadlines for completion of the project. Failure to comply with contractual requirements can result in LAD penalties being imposed, which can significantly impact project costs and profitability.
7. Use reliable suppliers and contractors to avoid LAD Using reliable suppliers and contractors can help to ensure that materials and services are delivered on time, which can help to avoid delays and LAD penalties. Before selecting suppliers and contractors, it is essential to conduct due diligence to ensure that they have a track record of delivering quality services and products on time.
8. Plan for contingencies to avoid LAD Contingency planning is critical for avoiding LAD penalties in construction projects. This involves developing a plan to address unforeseen events that could impact the project timeline, such as equipment breakdowns or worker shortages. By having a contingency plan in place, project managers can take swift action to address any issues that arise and prevent delays that could lead to LAD penalties.
9. Implement effective project management practices to avoid LAD Effective project management practices are critical for ensuring that construction projects are completed on time and within budget, thereby avoiding LAD penalties.