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Procurement & Contract Practice

Module Code: UBLLY8-15-2

Auston Institute of Management


School of Engineering
In partnership with: Department of Architecture and the Built
Environment, Faculty of Environment and Technology, University of the
West of England

Name – Aung Lin Htet

Student No –17049813 Word Count – 1900 words


Content Page no

1. Intoduction 1
2. Contract Form 2
3. Key points of standard form table of contractors for SIA and PSSCOC 5
Introduction

“The construction process has major environmental impacts and its product relates to,
interacts with, and adversely affects, the environment for several years. Various approaches
have been proposed to help the industry to contribute to the general effort towards achieving
sustainable development. These usually concentrate on the contractor’s role, and the
construction stage. This paper consists of contract provisions to achieve sustainability in
construction in Singapore.”

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Singaland project is a mixed-use development in Singapore’s central business district.
Keppel Land will invest around US$48.6 million in the project. The project is located in 123
Any Lane Shenton Way, Singapore. The collaboration follows Keppel Land and Singaland
first joint venture to develop Tower; a 23-storey office building in the first phase of the
project. In phase two of the project, Keppel Land will hold a 40 per cent stake in the serviced
apartment and office component, which will have a gross floor area of around 50,000 square
metres. Ng Ooi Hooi, president, regional investments, Keppel Land, said that the group is
confident of the long-term potential of Singapore, and is committed to participating in and
contributing to the growth of the country.

Contract forms

The standard form of contract use in construction project contains agreement and
condition of contract. Two standard types of contracts are use commonly in Singapore. They
are the Singapore Institute of Architects Form of building contracts (SIA contract) and the
Public Sector standard Conditions of Contract (PSSCOC contract). SIA contract is used in the
private sector project and PSSCOC contract is used by public-sector projects.

SIA (Singapore Institute of Architects)

In SIA contract, orders and requests from the Architect are main instructions.
Architect job is not only designing building but also he has contractual and contractual works
too. SIA contract is perform between the decisions of architect and clients often deal with
payment terms. Standard form of contract is included in SIA contract that can be used as
guideline. It was known as the Conditions of Appointment and Architect’s Services and
Mode of Payment.

The Architect has a right to change the project conditions as he has discussed and
confirmed by the clients. Entire contract was written by architect or prepared by the clients.
There are two types of contract form in SIA called the Lump Sum Contract form and the
Measurement Contract form. They are kind of traditional contracts. Under SIA contract, the
contractor has time duration of 14 days to confirm a verbal instruction. If instructions are not
object within 14 days, is regard as it was given in writing.

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PSSCOC (The Public Sector Standard Conditions of Contract)

The Public Sector Standard Conditions of Contract (PSSCOC) was produced to


empower a typical contract type to be utilized in public construction projects. This type of
contract can reduce tendering efforts and support more powerful in contract administration.
Standardisation of this contract is popular among user. The PSSCOC is most useful to the
industry experts who tendering public sector construction projects.

Obligations of contractor in PSSCOC

In this contract, contractor shall complete all the works according to the duration
provided in the contract and satisfaction of the Superintending Officer. Contractor mange
vendors and trades, they also act as main communicator for all involved parties. Contractor
shall also provide construction needs like labour, construction equipment, PPE (personal
protective equipment) and many others things. Contractors intend to be responsible for the all
the works done by him.

Contractor’s responsible among subcontractor

In large construction project, there are many multiple parties who work together to
complete the project within deadline. In this case, contractor who don’t have enough
manpower to complete the project hire subcontractors to help them finish the project within
deadline. Sometimes subcontractors work for the part of the project, or they involve in all the
work. If subcontractor was nominated by contractor, contractor shall indemnify the employer
from loss, expense, costs, liability, damages for subcontractor faults.

Failure to comply with instruction by contractor

In SIA contract, if the contractor was failed to comply a receipt of a notice from the
Architect with an instruction within 7 days, the employer can call another contractor to carry
out the instruction. Extra cost expense due to the failure of contractor comply the instruction
is deducted from retention money and also include additional cost for hiring another party to
carry out the work. Before deduction from retention money for extra cost to hire other
contractors, architect is needed to issue a certificate of cost of other contractor’s work. Due to
discretion of employer in payment deal, the certified extra cost has been deducted.

In PSSCOC contract, if the contractor was failed to comply within given time period,
superintending officer can recover the amount what was given to contractor. Superintending

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officer has a right to issue a termination certificate for failure of contractor to comply the
instruction. If contractor keep failing to comply the instruction, the contractor can be
termination of his employment due to the termination certificate. Under PSSCOC contract, no
kind of certificate is needed for employer to recover money incurred from the contractor.

Risk of contractor

“The risk of delay and additional costs arising from foreseeable sub-surface and
ground conditions are typically allocated to the contractor. In the context of foreseeability it
is often provided that the contractor is deemed to have, conducted its own investigation of the
site, prior to the date of the contract. In addition, the employer may provide certain
geotechnical information to the contractor in the form of site investigation reports,
publications or journals. Contractors will simply need to manage this risk by conducting
adequate due diligence (for example, ground investigation surveys). The test for what
amounts to foreseeable sub-surface and ground conditions will be heavily negotiated between
the parties.”

“The contractor commonly retains the risk of material price escalation, although this
can be a point of contention during periods of acute shortage of certain key construction
materials. Similarly, contractors may seek to be compensated by employers for additional
costs flowing from manpower constraints.”

“The risk of additional costs for unforeseen items of work is also typically allocated to
the contractor through lump sum contract pricing. The principle of a lump sum contract price
(which is frequently associated with the Singapore Institute of Architects’ Building Contract)
provides that a price quoted by the contractor for construction work is generally expected to
include everything necessary to complete the work. Therefore, the contractor bears the risk of
the costs of any unforeseen item of work required to complete the work. To mitigate this, the
contractor should carefully particularise each item of work and define the breadth of work
that its quoted price covers. The courts have held that, in the absence of words to the
contrary, lump sum contract pricing will be assumed to apply to a design and build contract.”

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Key points of standard form table of contractors for SIA and PSSCOC

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Conclusion

“As a conclusion, PSSCOC contract will be used for Singaland project. The Public
Sector Standard Conditions of Contract (PSSCOC) was developed to enable a common
contract form to be used in all public sector construction projects. Standardisation will
increase familiarity among users, reduce tendering efforts and promote greater efficiency in
contract administration.

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References

Ofori, G. (1993) The environment as a construction project objective. In Briffett, C. and Sim,
L.L. (eds.) Proceedings: Seminar on Environmental Issues in Development and Conservation,
Singapore, pp. 52-56.

Low, C.K. (1996) Environmental Friendly Architecture in Singapore. Unpublished


Dissertation, National University of Singapore.

Tan, A.T.K. (1997) IS0 14000: A Practical Approach for the Local Construction Industry.
Unpublished Dissertation, National University of Singapore.

Ng, P.W.M. (1993) Environmentally sustainable construction. In Lee, S.E., Tham, K.W. and
Sim, L.L. (eds.) Green and Healthy Buildings. Centre for Building Performance and
Construction, National University of Singapore.