COVID-19: Construction Contracts in Singapore | FTI Consulting

COVID-19: Navigating the Contractual Remedies within Construction Contracts in Singapore

Construction

August 18, 2020

Cranes

The COVID-19 pandemic has caused significant disruption and cash flow issues to many construction companies. In this article, we explore the contractual remedies available to the Contractor under the local standard forms of a contract.

Parties to construction contracts are currently concerned with the negative impacts of COVID-19 and its continuing effect on construction projects including:

  • Project delays due to suspension of works as part of the nation circuit breaker measures1 and disruption or reduced efficiency due to social distancing at sites following project re-starts;
  • Additional costs incurred due to heightened workplace safety, health and environmental measures and construction of temporary workers’ quarters to accommodate essential services workers during the suspension period; and
  • Potential increase in compliance costs in connection with COVID-Safe Restart Criteria2 which includes, but is not limited to, implementing a system to track the daily health status of workers, regular COVID-19 testing for the workforce, cohorting of workers by projects at their accommodation, costs of implementing safe management measures to minimise the resurgence of COVID-19, appointment of safe management officers and safe distancing officers and construction of onsite temporary workers’ quarters.

We consider below the relief expressly available under the relevant unamended standard forms, namely the SIA Articles and Conditions of Building Contract (the “SIA Conditions”), the REDAS Design and Build Conditions of Contract (the “REDAS Conditions”) and the Public Sector Standard Conditions of Contract (the “PSSCOC Conditions”).

Footnotes:

1: Construction sites were closed from 7 April to 1 June under BCA advisories dated 3 April and 2 May 2020: https://www.scal.com.sg/resources%20ckiles/2_%20BCA-Advisory-to-construction-industry.pdf

2: BCA Media Release dated 15 May 2020: https://www1.bca.gov.sg/docs/default-source/bca-restart/advisory-safe-controlled-restart-of-construction-sector.pdf


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