Imagine a situation where a contract was agreed upon by homeowners and builders. They carried out the project and changed a few things along the way. Upon completion, the homeowners were satisfied with the overall works but they did not like the window panes—arguing that they were different from the ones in the contract—and then claimed a refund. The builders declined the claim because the variation work request had been communicated before.
Imagine that kind of dispute but involving a substantial amount of money and firms’ reputations; this would cause complex problems involving expenses and time. In any case, an expert construction lawyer can guide us through the legal process, but a better solution would be to seek legal advice in contract administration.
The Singapore’s Building and Construction Authority (BCA) has amended the Public Sector Standard Conditions of Contract (PSSCOC) 2014 and issued the PSSCOC 2020 last July. Donna Er from Singapore Institute of Building Limited (SIBL) shared her comments in the BuildTech Asia Digital Series on 14 October 2020 on key clauses in PSSCOC 2020 that regulate communication between a contractor and a superintending officer (SO).
LOSS AND EXPENSE CLAIM FOR A WITHDRAWN ORAL INSTRUCTION
PSSCOC 2020 Clause 2.5 specifies that instructions from the SO should be in writing. Oral instructions must then be accompanied by a written confirmation. The contractor at the receiving end confirms this instruction within three working days (excluding Sundays and public holidays) and if this is not contradicted by the SO within another three working days, then the instruction is valid.
What is important to note is that if the SO withdraws an oral instruction within the timeline (six days in total), then he may certify pursuant to Clause 32 (payment claim). This is because the contractor has incurred loss and expense by reason of his compliance with the SO’s oral instruction that has been withdrawn.
Compared to PSSCOC 2014, the time for the contractor to confirm oral instruction as well as the time for the SO to contradict the confirmation have been reduced from seven to three working days. The timeline for confirming oral instruction has been shortened but the contractor can now claim for loss and expense caused by a withdrawn oral instruction.
EMAIL AND FACSIMILE AS PART OF THE SERVICE METHOD
Adhering to PSSCOC 2020 Clause 37.2, contractors should provide a postal address in Singapore, now together with an email address and a facsimile (fax) number. The provision of these details is in line with the effort of digitalisation in the post-COVID world.
Certificates, notices and instructions served on the contractor are now deemed to be received on specific dates—postage will be considered on the fourth working day after posting; email will be at the time of entering the information system addressed to the email address; and fax will be at the time of a successful transmission.
Daily email checking is advisable because an instruction sent through email remains valid and effective even if it has not been read. In addition, before the service address is changed, there should be a 14-day written notice to the SO.
VARIATION WORKS AND THE SUBSTANTIVE/PROCEDURAL REQUIREMENTS
PSSCOC 2020 Clause 19.1 deals with variation works, which include any change in the original contract intention, such as an increase or decrease in the quantity of any part of the works; addition or omission from the works; a change in the character, quality or nature, etc. This has not changed and in general, means that there will be no variation as long as the SO does not issue a variation order.
Regarding the procedure, Clause 19.2 allows the SO to issue a written instruction for a variation work at any time. Sometimes though, the SO, as implied in their instructions, may not think there should be a certain variation work, but the contractor may think otherwise. If this is the case, the contractor can notify in writing within 14 days from when they receive the SO’s instructions, who will then check and see if this really is the case and respond within 14 days after receiving the notification.
About the contractor’s compliance, PSSCOC 2020 Clause 7.1 obliges the contractor to comply with and give notices to the SO as required by any law; regulation or by-law; or by any public authority or public service company. Before making any variation from the drawings and specifications necessitated by the compliance with Clause 7.1, the contractor must give the SO a notice in writing specifying the reasons for such variation and apply for instructions. If contractor does not receive the instructions within seven days, they must proceed anyway.
What’s added to Clause 7.2 of PSSCOC 2020 is that any variation that could not have been reasonably foreseen by an experienced contractor at the time of submission of the tender would be considered a variation under Clause 19 and dealt with as such.
CONCLUSION
Projects are usually long-term transactions with high uncertainty and complexity, and it is impossible to resolve every detail and foresee every contingency at the outset. There should be a proactive approach to resolve the problems once they become apparent. Communication and compliance to standards and regulations could reduce the risk of disputes arising from variations.
Also read: PSSCOC contract administration: Key clauses to look out for in the new normal
The PSSCOC emended clauses aim to reduce such a risk, but at the end of the day, what eases contract administration is the meticulous contract checking, thorough planning and close coordination between the contactor and the SO.– Anisa Pinatih, Construction+ Online
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