Views from the BCA-REDAS Built Environment and Property Prospects Seminar
February 3, 2017.
2016 was a challenging year for Singapore’s built environment, as construction tender activities continued to fall compared to previous years.
Speaking at the annual BCA-REDAS Built Environment and Property Prospects Seminar on 6 January 2017, RLB in Singapore Joint Managing Partner, Mr Silas Loh, shared his observations on the current Singapore and regional construction markets.
He explored Singapore’s tender cost trends, the increasing regulatory demands for productivity, and how contractors have been responding to the declining building demand against muted global sentiments.
Public sector to give construction firms a boost
According to the Building and Construction Authority (BCA), public-sector construction demand is projected to grow between $20 billion and $24 billion.
At the seminar, Mr Desmond Lee, Senior Minister of State for Home Affairs and National Development, said that a sub-committee under the Council for Skills, Innovation and Productivity will be formed to develop an industry transformation map for the sector.
He urged firms to internationalise and develop Design for Manufacturing and Assembly (DfMA) capabilities. Singapore’s DfMA adoption rate is only about 10%, but the government land sales sites should lift that, with more tenders stipulating that this approach be adopted
Price and quality the best method
Following the labour movement’s call on Thursday for the Government to improve procurement practices to stamp out irresponsible outsourcing, contractors at the seminar raised the issue of whether the Government should use the price quality method (PQM). This ensures that both price and quality are considered in awarding public tenders.
Mr Loh said ‘I believe the PQM system works.’
He added ‘In our analysis of project tenders, we found that tender price spreads can be very wide, ranging from 16% to as much as 42%, taking the difference between the highest and lowest bids. We noticed that the lowest bid is often grossly lower than the others, even when compared to the second lowest bid.’
With a network that covers the globe and a heritage spanning over two centuries, Rider Levett Bucknall is a leading independent organisation in cost management and quantity surveying, project management and advisory services.
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