Construction firms upbeat about new tender criteria

New tender criteria will place greater emphasis on quality rather than price in the construction industry.
New tender criteria will place greater emphasis on quality rather than price in the construction industry. PHOTO: ST FILE

Construction firms are hopeful that new tender criteria that place greater emphasis on quality rather than price will raise industry standards and minimise price wars.

The quality component of a tender will now be given greater weighting - 40 per cent to 60 per cent, Minister for National Development Law-rence Wong said yesterday. This is up from the usual 30 per cent. This means the Government will scrutinise a firm's past performance, productivity and safety record more tho-roughly before awarding a contract.

Mr Tony Goh, project manager for ventilation provider Big Ass Solutions, said his firm favours the new criteria as it provides "costlier but better-quality products".

Excel Precast CEO Tan Bian Tiong said the change would especially benefit firms which are more technologically inclined, and also incentivise others that have yet to take the leap. "You are disadvantaged only if you are doing things the conventional, unproductive way, or have a really bad safety record," he said.

Agreeing, Nanyang Technological University engineering professor Robert Tiong said the new criteria, which will kick in next January, will prevent low bids that may compromise safety or are even loss-making.

This, coupled with another announcement yesterday that the Government is bringing forward another $700 million in public-sector projects over the next two years, will help an industry hurt by dried-up private-sector demand, he said. "With a larger volume of projects in the market, smaller firms have more bites of the cherry. With the added boost, they may be more willing to invest in new equipment or upgrade their skills. It is a win-win for all," he said.

While firms were pleasantly surprised by the added number of projects coming onstream earlier, some worried it might be too little, too late. Ms Wendy Ang, assistant general manager for material supplier Laticrete South East Asia, said her company can take advantage of the extra boost only towards the end stages of a project, as the firm installs tiles and stones, consisting of waterproofing, screeding and grouting, among other things.

For many firms, the next one to two years will be critical as they enter "survival mode", said Mr Kenneth Loo, president of the Singapore Contractors Association Limited (Scal), which represents some 3,000 firms.

"Construction is a cash-flow business - there needs to be continuity for firms to keep on growing. So more is never enough, but at least it is a good gesture to inject some positive sentiment into a depressed industry," he said.

At yesterday's Scal gala dinner, Mr Loo announced the building of a Scal construction hub. One of its goals is to bring other trade associations under its roof to promote better collaboration in the industry.

Correction note: This article has been edited to clarify the scope of Laticrete South East Asia's work. 

A version of this article appeared in the print edition of The Straits Times on September 29, 2017, with the headline 'Construction firms upbeat about new tender criteria'. Print Edition | Subscribe