REFLECTIONS ON THE SINGAPORE INSTITUTE OF ARCHITECTS’ CONDITIONS OF SUB CONTRACT (SECOND EDITION)

• Citation: (2000) 12 SAcLJ 95
• Published date: 01 December 2000
• Date: 01 December 2000

1. The construction industry in Singapore, like that in the United Kingdom and other commonwealth jurisdictions, is characterised by subcontracting. Sub-contractors are classified as either domestic or nominated sub-contractors. A domestic sub-contractor is one where the employer plays no part in the selection and appointment of the contractor. On the other hand, nominated sub-contractors are specially chosen by the owner to carry out certain portions of the work. This system of nomination allows the owner greater control over the quality and price of specialist work desired to be carried out by contractors of the owner’s choice.

2. For private sector projects in Singapore where the main contract between the employer and main contractor is based on the standard form contract published by the Singapore Institute of Architects (“SIA Main Contract”), the nominated sub-contracts entered into between the main contractor and nominated or designated sub-contractors1 will invariably adopt the SIA Conditions of Sub-Contract (“SIA Sub-Contract”) for use in conjunction with the SIA Main Contract. Whilst the current SIA Main Contract has undergone six revisions todate since its inception in 1980, the First Edition of the SIA Sub-Contract also published in 1980 had remained intact for almost 19 years until its recent overhaul in the Second Edition launched by the SIA in August 1999 in conjunction with the Main Contract (6th Edition). This article examines the major changes in the new edition of the SIA Sub-Contract and their implications for the construction industry.

ROLE OF THE ARCHITECT

3. One hallmark of the SIA family of contract forms is the role of the architect2 in the administration and regulation of the parties’ relationship in both the main contract and nominated sub-contract.

The architect is not concerned with the administration of domestic sub-contracts. Architect’s certificates and decisions are conferred “temporary finality” on the matters certified pending final adjudication at trial or arbitration. Insofar as the nominated sub-contract is concerned, although the architect is traditionally employed by the owner, he is empowered to give directions or instructions to the nominated sub-contractor on matters affecting the sub-contract works. For this purpose, the architect is deemed to be an agent of the main contractor when giving such instructions or directions.3 The architect also has power on behalf of the main contractor to order variations to the sub-contract works.4

4. The new edition of the SIA Sub-Contract has divested the architect of any role in administration of the nominated sub-contract. Administration of the sub-contract is now assumed by the main contractor. Under the new regime, if the architect intends to issue directions or instructions concerning the sub-contract works, these would have to be issued to the main contractor who would in turn issue directions or instructions to the sub-contractor.

EXTENSION OF TIME

5. In keeping with his enlarged role, the task of evaluating and assessing extension of time previously undertaken by the architect is now carried out by the main contractor in the new regime established by the new edition of the Sub-Contract.

6. Previously, the procedure for extension of time required the sub-contractor to apply either to the main contractor or architect within 28 days of the event, direction or instruction relied upon as the ground for extension of time.5 The architect, after receiving representations from the main contractor, would then apply, mutatis mutandis, the main contract provisions governing extension of time, to assess and grant the appropriate extension of time to the sub-contractor.6

7. Under the new regime, all applications for extension of time are addressed to the main contractor only with the time limit for applications shortened from the 28 day period to 21 days.7 This reduction in time limit is intended presumably to allow the main contractor sufficient time to apply in turn to the architect for extension of time under the main contract based on the same ground relied upon by the sub-contractor.

8. Upon receipt of the sub-contractor’s application, the main contractor is required to apply the provisions of the main contract,8 mutatis mutandis, in evaluating and assessing extension of time to the sub-contractor. In practice, one can foresee difficulties which the main contractor may have in implementing the provisions relating to extension of time under the main contract when assessing the sub-contractor’s application for extension of time. To appreciate the nature of these difficulties, it is necessary to understand how the extension of time mechanism in the SIA Main Contract (6^th edition) operates. Briefly, once the main contractor submits his notice for extension of time to the architect, the architect is required within one month of request by the main contractor to inform the main contractor whether he is in principle entitled to extension of time.9 After the delaying factor has ceased to operate and it is possible to assess the length of extension of time, the architect is required to decide the period of extension and notify the contractor accordingly.10 This requirement to assess the period of extension promptly is subject to the provision of adequate information or materials by the contractor to enable the architect to assess extension of time where requested to do so by the architect.11

9. One difficulty which the main contractor may face in operating the extension of time machinery under the new Sub-Contract is the time lag between the architect’s in-principle intimation to his request for extension of time and his own obligation to revert with an in-principle decision on the sub-contractor’s entitlement to extension of time. The main contractor is placed in a dilemma. He may be forced to take a position on the sub-contractor’s application for extension of time before his own position vis a vis the architect under the main contract is ascertained. There is a risk of inconsistency in this new arrangement.

10. Another difficulty lies with the assessment of extension of time to be granted. The rationale behind requiring assessments of extension of time to be made promptly is to enable the contractor to have a target date for completion to work towards and to programme his work and resources accordingly. Given the way the extension of time mechanism is now structured, it is likely to engender a practice amongst main contractors in instances where the Sub-Contract works lie on the critical path of the Main Contract Works to await the architect’s assessment of their claims before in turn making an

assessment of the sub-contractor’s claim. There would be a natural tendency for a main contractor to peg assessment of the sub-contractor’s application to his own claim to avoid inconsistency in treatment in such cases.12 It would take a bold main contractor to grant an extension of time to a sub-contractor whilst his own claim is in abeyance as he may well find himself shortchanged by the architect’s assessment. This will no doubt mean that assessment of the sub-contractor’s claim for extension of time will be held up on account of any delays in assessment of the main contractor’s claim by the architect.

11. A greater cause for concern stems from the change brought about by Clause 15.2 of the new Sub-Contract whereby decisions and certificates of the main contractor under the sub-contract are devoid of any temporary binding effect on the nominated sub-contractor. However, decisions and certificates of the architect under the main contract continue to have temporary finality as regards the main contractor. This dichotomy in treatment of decisions on extension of time can cause disruption problems at site. Consider a typical situation where the works on site are delayed by a variation order emanating from the architect which affects both the Main and Sub-Contract Works. If the main contractor assesses and awards an extension of time to the sub-contractor which is less than the extension granted to him by the architect, the nominated subcontractor is likely to feel aggrieved and short-changed in having to complete the Sub-Contract Works within a shorter time frame than that given to the main contractor by the architect in respect of the same delaying factor. Conversely, a main contractor who is over-generous in his assessment of extension of time to the nominated sub-contractor but who in turn receives less favourable treatment from the architect may find himself in the invidious position of having to allow the sub-contractor a longer time to complete his works whilst held to a shorter time frame vis-a vis the employer. Under the old regime, the scope for inconsistencies in treatment was considerably reduced as the architect played a vital role in assessing and granting of extensions of time to both the main contractor and nominated sub-contractors. Further, the “temporary finality” conferred on the architect’s decisions enabled both the main and nominated sub-contractors to order their affairs in the course of the construction project on the basis of the architect’s decisions or certificates without prejudice to their rights to seek redress in arbitration or litigation. With temporary finality removed insofar as the main contractor’s

decisions are concerned, disputes are likely to abound over perceived inadequacies and inconsistencies in assessments of extensions of time by the architect and main contractor.

DAMAGES FOR DELAY IN COMPLETION

12. Under the first edition of the SIA Sub-Contract, there is a provision for imposition of liquidated damages for delays in completion of the sub-contract works. The machinery for liquidated damages in the sub-contract form follows closely the main contract and the architect is required to issue a sub-contract delay certificate before the right to impose liquidated damages on the...