BCA: PROVIDING CASHFLOW SUPPORT TO CONSULTANTS DUE TO IMPACT OF COVID-19

This circular seeks the support from the Built Environment (BE) sector to provide cashflow support to consultants due to impact of COVID-19. 

Difficulties Faced by Consultants

2              COVID-19 has impacted the BE sector in an unprecedented way, resulting in construction project delays and increase in operating costs. As a key stakeholder of the construction value chain, consultants are also not spared from the impact brought about by COVID-19. Consultants have been affected in the following ways:

1. Design Phase: Some construction projects at the design stage have been put on hold or have to be reviewed due to the COVID-19 situation. Consultants were asked to iterate design and conduct value-engineering in response to issues brought about by the pandemic during the period. This leads to additional works and consultants face difficulty in redeploying their staff to new projects as they are still expected to be fully committed to their existing contracts.
2. Construction Phase: Notwithstanding that consultants could still work from home during the Circuit Breaker period from Apr to May 2020, the lengthening of construction contract period due to COVID-19 has affected consultants’ cashflow. In particular, their payment milestones were stretched over a longer period of time as part of their payment is based on the proportion of progress payment paid out to contractors during construction stage. In addition, consultants had to assist in the evaluation and certification of contractors’ ex-gratia claims and claims under the COVID-19 (Temporary Measures) Act.

3              To address the difficulties mentioned above, the Government has been providing the following support to consultants:

1. Cashflow Support

• Job Support Scheme (JSS): The JSS provides wage support to employers to help them retain their local employees (Singapore Citizens and Permanent Residents) by helping to offset local employees’ wages and to help protect their jobs. Under the JSS, the Government co-funds a proportion of the first $4,600 of gross monthly wages paid to each local employee. Firms in the BE sector would have received JSS support from April 2020 to Jun 2021 based on the table below:

1. Providing Further Support to Consultants

• Ex-gratia payments for evaluating/certifying COVID-related claims: As mentioned in the ‘Circular on Ex-gratia Payment to Consultants for Evaluating/Certifying Contractors’ COVID-related Claims’ issued on 5 May 2021, government agencies would be providing ex-gratia payments to consultants for services rendered for the evaluation of contractors’ COVID-19 related claims (see Annex A for details). Other BE sector clients such as private developers and contractors in Design and Build projects are encouraged to adopt similar ex-gratia payments to provide remuneration to their engaged consultants for additional services provided.
• Providing additional cashflow support: As mentioned in the ‘Circular on Facilitating Consultants’ Cashflow due to Lengthened Project Duration’ issued on 18 Mar 2021,  guidelines were provided for government agencies to exercise greater flexibility in facilitating consultants’ cashflow due to lengthened project duration (see Annex B for details). Clients could also take into consideration of other additional work scopes (apart from evaluation/certification of contractors’ COVID-19 claims) taken on by consultants due to the evolving landscape of the current COVID-19 pandemic and longer contract period and provide compensation accordingly.

Others & Clarifications

4              BCA would like to remind all employers to remain extra vigilant during this period and take the following steps:

1. Adhere to safe management measures
2. Ensure employees go for Rostered Routine Testing (RRT)
3. Ensure that employees who are feeling unwell see the doctor immediately

5              For clarifications, please contact BCA at www.bca.gov.sg/feedbackform/. Please visit BCA’s COVID-19 webpage (https://www1.bca.gov.sg/COVID-19) and subscribe to BCA’s Telegram channel (https://t.me/BCASingapore) for latest updates.