Knowledge Highlights 30 March 2022

On 3 March 2022, the Building and Construction Authority (“BCA”) issued a circular on the grant of ex-gratia extension of time (“EOT”) due to Covid-19 events in public sector construction contracts for the period July 2021 - February 2022 (“Circular”). The Circular states that contracting parties in private sector construction contracts can take reference from the Circular and negotiate on the appropriate period of EOT to be provided. Details of the circular are set out below.

Background

Previously, the following circulars were issued by BCA to ease claims for EOT under eligible construction contracts:

Date of circular

Key information in circular

30 November 2020

For period between 7 April 2020 and 6 August 2020: Part 8A of the Covid-19 (Temporary Measures) Act 2020 (“COTMA”) provides a universal EOT of 122 days.

27 April 2021

For period between 7 August 2020 to 31 December 2020: 49-day ex-gratia EOT granted to eligible contracts for delay due to loss of productivity arising from Covid-19 related events.

10 November 2021

For period between 1 January 2021 and 30 June 2021: 34-days ex-gratia EOT granted to eligible contracts for delay due to loss of productivity arising from Covid-19 related events.

(Source: BCA Circular on Ex-gratia extension of time (EOT) due to Covid-19 events for July 2021 - February 2022 in public sector construction contracts, 3 March 2022)

Ex-gratia EOT for delay due to loss of productivity from July 2021 to February 2022

BCA states that while the Covid-19 pandemic situation continued to impact site productivity to some extent in the second half of 2021, construction output at industry level has recovered close to pre-Covid levels. This indicates that construction activities are progressing at a steady pace. The computed ex-gratia EOT for eligible public sector construction contracts has taken this development into consideration.

For eligible public sector construction contracts, government agencies will grant an ex-gratia EOT of 33-days (or part thereof) due to loss of productivity for the period from 1 July 2021 to 28 February 2022. More details are set out in the table immediately hereafter. The eligibility criteria remain the same as the previous BCA circular dated 27 April 2021, i.e. for public sector construction contracts:

  • in which the tender was closed on or before 1 June 2020;
  • that were not terminated by the employer on or before 7 August 2020 under clause 31 of Public Sector Standard Conditions of Contract (8th Edition) (“PSSCOC”) (or equivalent clause under the contract); and
  • that was not certified to be substantially completed on or before 7 August 2020 under clause 17 of PSSCOC (or equivalent clause under the contract).

Period

Ex-gratia EOT to be granted to eligible construction contracts

1 July 2021 to 30 September 2021

5 days per month
(Total of 15 days for 3Q 2021)

1 October 2021 to 31 December 2021

4 days per month
(Total of 12 days for 4Q 2021)

1 January 2022 to 28 February 2022

3 days per month
(Total of 6 days for January-February 2022)

Note: In total, 33-days of ex-gratia EOT for period from 1 July 2021 to 28 February 2022.

(Source: BCA Circular on Ex-gratia extension of time (EOT) due to Covid-19 events for July 2021 - February 2022 in public sector construction contracts, 3 March 2022)

The following procedure will continue to apply:

  • No claim for ex-gratia EOT is required from contractors: Ex-gratia EOT will apply unless the government agency assesses there are strong grounds which deter the grant of the ex-gratia EOT.
  • Contractors wishing to seek longer EOT for the same period shall provide necessary substantiation for government agencies’ assessment: Government agencies can grant longer EOT if they assess such requests to be appropriate. More information is available from the BCA simplified claims process FAQs webpage.

Barring any unforeseen circumstances, this will be the final broad-based grant of ex-gratia EOT for public sector construction contracts arising from Covid-related delay. For eligible construction contracts, contractors can still request for EOT arising from Covid-related delay with detailed substantiation to their respective government agency clients, for the period after 28 February 2022 up till 31 December 2022. For contracts using PSSCOC, contractors can rely on contractual provisions under the PSSCOC to claim for EOT for such Covid-related delay.

Simplified claim process for COTMA Part 8B prolongation cost

For eligible construction contracts, government agencies will continue to compute the prolongation cost pay-out based on the EOT provided for Covid-related delay from 1 July 2021 to 28 February 2022, via the simplified claim formula. As the relief period under COTMA Part 8B ended on 28 February 2022, the simplified claim formula will cease to apply for any prolongation cost claims arising from Covid-related delay after 28 February 2022.

Reference materials

The Circular is available from the BCA website www.bca.gov.sg.

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