28 June 2018

On 8 June 2018, the Ministry of National Development (“MND”) and the Building and Construction Authority (“BCA”) issued a public consultation on proposed amendments to the Building and Construction Industry Security of Payment Act (“SOPA”). The consultation closed on 29 June 2018.

The SOPA, which came into operation on 1 April 2005, seeks to improve cash-flow in the construction industry by giving parties the right to seek progress payment for work done, and provides a fast and low-cost adjudication procedure to resolve payment disputes.

The proposed amendments to the SOPA have taken into account the feedback received by BCA from several rounds of industry consultations.

Proposed amendments

The proposed amendments to the SOPA are primarily aimed at better aligning the SOPA with the original intent of providing a fast and low-cost dispute resolution mechanism.

Key proposed amendments to the SOPA include the following:

  • Application of the SOPA: Clarifying that the SOPA covers: (1) a construction contract or a supply contract that has been terminated by the respondent without default on the part of the claimant; (2) overseas production of prefabricated components supplied for construction work to be carried out
    on a construction site in Singapore; (3) final payment claims; and (4) unpaid payment claims.
  • Payment claims and payment responses: Clarifying when and how payment claims should be served, as well as the time limit for service of payment claims, and extending the default period for providing a payment response from seven to 14 days.
  • Adjudication process: Enhancing the adjudication process by giving claimants the right to file for adjudication review.
  • Authorising nominating body (“ANB”) and adjudicators: Clarifying the duties and roles of ANB and adjudicators (including to perform their duties
    in good faith and with reasonable care, and for adjudicators to immediately disclose to the ANB any conflict of interest or should the adjudicators cease to meet the eligibility criteria).

Reference materials

The following materials are available on the BCA website www.bca.gov.sg:

 

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