SUSS expected to follow government contracting terms but has leeway to set own terms: Indranee

SINGAPORE – Autonomous universities such as the Singapore University of Social Sciences (SUSS) are generally expected to follow government standard contracting terms but have “a much broader leeway to depart or set their own terms”, said Second Minister for Finance Indranee Rajah on Nov 5.

Ms Indranee was responding in Parliament to Mr Ang Wei Neng (West Coast-Jurong West GRC), who had raised concerns about clauses in government contracts such as contractors having to take on unlimited liability regardless of contract value.

Mr Ang also cited limited payments during the project, which can cause contractors – especially small and medium-sized enterprises – issues with cash flow, as well as unlimited design changes without additional payment.

Mr Ang’s questions come after the Singapore Institute of Architects

flagged “unfair clauses” in an SUSS tender for its new Rochor campus

.

These clauses include “unlimited design changes post-award with no additional fees and unlimited liability”, said the institute’s president Tiah Nan Chyuan in a LinkedIn post on Sept 25.

In response, SUSS said the tender was developed “in line with current industry standards”, adding that the university is “committed to fair, transparent and responsible procurement practices”.

On Nov 5, Ms Indranee said there is a distinction between SUSS and the Government.

“Autonomous universities are independent corporate entities and not government agencies, and this gives them the autonomy to handle operational and corporate service matters according to their own policies and procedures,” she said.

“Nevertheless, autonomous universities are expected to adhere to fundamental procurement principles – so value for money, transparency, and open and fair competition – and we encourage them to align broadly.”

Without giving details, Ms Indranee noted that to her understanding, the university’s contracting terms were “not in exactly the same terms as the government standard contracting terms”.

Mr Tiah told The Straits Times on Nov 5 that the institute has met SUSS once since the LinkedIn post was published, and discussions on the matter between the institute and SUSS are under way.

An SUSS spokeswoman said in a statement to ST that the university is “fully committed to fair and transparent procurement processes, a principle that is especially vital given the significance of the Rochor campus project”.

She added that SUSS has been engaging with the Singapore Institute of Architects on its feedback on the invitation to tender for the new SUSS and Singapore College of Islamic Studies.

The university and the college will be

built next to each other

.

Ms Indranee told Parliament that, broadly, there are three groups that call for construction-related consultancy services. She said: “One is pure Government. Then there are those which are not exactly Government, like SUSS or other agencies, which are expected to follow (the) Government but have a much broader leeway to depart or set their own terms.

“And then third, there’s (the) private sector.”

She said the Government has been encouraging the construction industry to have “collaborative contracting” and fair clauses.

“The old way of approaching contracts is very much a ‘win-lose’. The lawyers on one side will want to get everything for their client. The lawyers on the other side will obviously want to do (the) same,” she said.

“But contracts for such procurement should not be win-lose. You should try to see how you can make it win-win,” said Ms Indranee, who added that this needs a change of mindset.

She said collaborative contracting involves negotiations between parties on what constitutes fair clauses in contracts but acknowledged that this is difficult “when you have parties who have uneven resources and (are) of different sizes”.

Ms Indranee said the standard consultancy agreement – used for public-sector construction-related consultancy services – and other government standard contracts “can and should be the base reference” for parties seeking consultancy services.

“You can depart from it, but that should be the standard for what is the expected norm, and (the) Government has the ability – by putting in certain clauses – to practise it for ourselves but also to signal to the market what is considered fair,” she said.

Addressing Mr Ang’s point on unlimited liability, Ms Indranee reiterated an earlier announcement that from Dec 1, government contracts in the built environment sector must

include a clause that limits a consultant’s contractual liability

.

Noting this change to government contracts from Dec 1, the SUSS spokeswoman said that while the university is not a government agency, it is reviewing the clauses for its Rochor project and “working towards an aligned approach”.

As for unlimited design changes, Ms Indranee said the standard consultancy agreement requires agencies to pay for additional services that are not covered by contracts, such as “further changes after design sign-off”.

On payments, Ms Indranee said government agencies typically make payments to their suppliers at specified milestones during the course of the project.

“For instance, construction contractors are usually paid every month, based on monthly progress payments,” she said, adding that the Ministry of Finance has also provided agencies with guidelines for more frequent payment milestones.