PREFABRICATED PREFINISHED VOLUMETRIC CONSTRUCTION (PPVC) IN SINGAPORE Similarly, an Advance Payment Guarantee from the Contractor remains as a condition precedent prior to any milestone payment to be made by the Employer. method. One of the learning points from this project was the early confirmation of designs and materials which led to a smooth production cycle that constituted time savings. Particularly due to the complexity of the PPVC module and its own proprietary system, Developers are highly encouraged to engage the PPVC Manufacturers and Contractors early through the ECI approach. Early Contractor Involvement (ECI) is an approach where Contractors are engaged early during the design stage to facilitate integration of design and construction process, through early collaboration between the Developer, Consultants and Contractors. The PPVC manufacturers and Contractors can be engaged during the Concept Design stage and/or Schematic Design stage to provide their technical input in developing a more comprehensive design of structural, architectural and MEP. This helps in providing better and more effective technical solutions to the PPVC modules before the actual tender launch. In terms of procurement approach, Design & Build or Design Development & Build are also more preferred than the traditional Design Bid Build for construction projects involving PPVC. Progress Payment and Advance Payment Guarantee Payment for material off-site is not a contractual provision in most standard forms of contract in Singapore. Hence, the immediate concern of most PPVC contractors is whether employers are willing to make payment for PPVC works that are mostly carried out at the off-site yards. To address the contractor’s major concern on the construction cashflow, conditional payment schemes for off-site PPVC works have been developed. Under the Public Sector Standard Conditions of Contract (PSSCOC), an Option Module of ‘Lump Sum Advance Payment for PPVC’ has been introduced. An Advance Payment Guarantee is required to be submitted by the Contractor to the Employer (Developer) as a condition precedent to any Advance Payment to be made by the Employer. Within 28 days from the date of the receipt of the Advance Payment Guarantee and security deposit (performance bond) by the Employer, the Employer shall pay to the Contractor an advance payment of 20% of the PPVC costs, capped at 10% of the total construction sum unless otherwise stated in the Appendix of the PSSCOC. The Employer is entitled to recover the Advanced Payment by equal installments at the agreed intervals from the agreed recovery start date as specified in the Appendix, from the Contractor’s submitted payment claimed amount. Unlike the PSSCOC, the standard forms of contract used in the private sector, i.e. Singapore Institute of Architects Articles and Conditions of Building Contract and the REDAS Design and Build Conditions of Contract do not contain similar payment provisions as of today. Whilst a similar advance payment scheme has been adopted to some of the private PPVC projects, a milestone payment framework based on the agreed % has also been negotiated to facilitate the PPVC payment. The most common schedule for milestone payment is shown as follow: Figure 2 An Overview of ECI in Design Stage (Source: Khoo, 2015). 00:0 7
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