Caught in a property downturn, the construction industry has seen desperate firms bidding for projects at excessively low rates.
In a bid to control such fee-diving, the Government will soon pilot a new type of public tender that will place a greater emphasis on quality over price, National Development Minister Lawrence Wong announced yesterday evening.
Speaking at the annual Building and Construction Authority (BCA) awards ceremony at Resorts World Sentosa, Mr Wong said: "Unhealthy price competition can lead to negative consequences for the whole industry… Consultants and contractors who bid very low to get the contract end up having to cut costs and, worse still, cut corners."
Currently, the quality of the consultant or contractor is given a 30 per cent weightage during the tender evaluation. This will eventually be raised for all public tenders, though no timeline was given.
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Agencies will also be stricter in penalising firms that do not deliver to the quality standards, added Mr Wong. He said this will deter firms from fee-diving to win projects, only to compromise on quality.
Government agencies will also give more weight to those adopting new construction technologies. Mr Wong said technologies, such as design for manufacturing and assembly (DfMA) and virtual design and construction (VDC), allow firms to get the job done with fewer workers.
Since 2014, the use of DfMA has already been a requirement in some government land sales sites for private developments.
CUTTING COSTS, AND CORNERS
Unhealthy price competition can lead to negative consequences… Consultants and contractors who bid very low to get the contract end up having to cut costs and, worse still, cut corners.
MR LAWRENCE WONG, National Development Minister.
Developers and contractors will also be required to publish their quality scores in their sales documents, which can be an important consideration for homebuyers. Said Mr Wong: "Greater access to such quality scores will help consumers make more-informed choices."
He also announced a new task force, aimed at preparing graduates in DfMA and VDC skills, that will work with several higher learning institutes and industry associations to incorporate them into the curriculum.
On the impending changes, some firms at the BCA awards said it was about time that the intense price competition was checked.
Lim Wen Heng Construction's senior technical manager Cao Jiyong said: "The market now is very bad, so people bid low amounts for the limited jobs in order to survive. These changes will be a relief for everyone."
Added Singapore Contractors Association president Kenneth Loo: "These changes will encourage firms to bid wisely for public sector projects, and the emphasis on construction technology is also a form of encouragement for firms to invest in them."