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COVID-19(Temporary Measures) 2020 Act

You may download from Google Drive for a copy 134

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Statutory Provisions: COTMA [PART 8A]

Quiz:
Scenario: Developer engaged Contractor to construct a dwelling house. Contract was
entered into on 31 Jan 2019 and contractual completion was expected to be 30 Mar
2020. Project resumed on 7 Aug 2020 and completed on 30 Sep 2020. Thereafter, the
project went into the DLP phase for 12 months. Contractor did not serve a notice of
relief.
[Actual delay= (30 Sept 2020) - (30 Mar 2020) = 184 days]

Qn1: Is the Contractor entitled to the universal EOT of 122 days?

Qn2: Is the Developer entitled to impose LD? If entitled how many days?

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Statutory Provisions: COTMA [PART 8A]

Quiz:
Scenario: Developer engaged Contractor to construct a garage. Contract
entered into on 31 Jan 2020 and contractual completion was expected to
be 30 Mar 2020. Project was completed on 30 Jul 2020. Developer
granted EOT for 60 days. Contractor did not serve Notice of Relief.

Qn: Advise the Developer on his rights to impose LD. If he is

entitled, how many days of LD is recoverable?

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COTMA: Interaction between Part 2 and 8A

It is necessary to reiterate that:

1. Relief granted in Part 8A is a statutory EOT i.e. treating the disruption caused
by COVID-19 as an excusable delay.
2. Relief granted in Part 2 is not an EOT per se. It is merely a “shield” conferred
on the downstream party against imposable LDs i.e. treating the disruption
caused by COVID-19 as a culpable delay but LD being waived statutorily.
Confusion between Part 2 and Part 8A is not uncommon. Appended in the next
slide is a clarification issued by a contractor to the architect of an on-going project.

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PART 2 COVID-19 (TEMPORARY MEASURES) ACT 2020 (“COTMA”)

We refer to your letter dated 13 Jan 2021 (MDA/1703/EOT/002) on the granting of 122 days of statutory extension of time to the
completion date pursuant to Part 8A of the COTMA for the period between 7 April to 6 August 2020. Apart from Part 8A, Part 2A
grants relief for disruptions to progress caused a COVID-19 Event. COVID-19 Event is defined in COTMA to include “the
operation of or compliance with any law in Singapore or another country or territory, or an order or direction of the Government
of any statutory body”. Orders and directions such as swab tests, phased commencement of projects, decanting of workers, safe
measures management that restricts deployment of workers to sites have all contributed to loss of productivity and constraints to
progress.

Part 8A and Part 2 are two separate, independent, and distinct provisions with differing statutory mechanisms and reliefs
intended. The differences between the two sub-schemes within COTMA are outlined below:

1. Part 8A is a statutory EOT where the contractual completion date is extended by 122 days. Insofar as the
construction contract in question provides for consequences arising from an extension of the completion date, such
an upstream party’s liability for prolongation costs and/or loss and expense will flow as a consequence of the Part
8A relief.

2. S 6(5) of Part 2 of the COTMA provides relief from the obligation to pay liquidated damages for any holding up of
the Works arising from a COVID-19 event. An upstream party’s liability for prolongation costs and/or loss and
expense will not flow as a consequence of the Part 2 relief.

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TIMELINE AND RELIEF AVAILABLE

2020 2021
Post COTMA
April May June July August September October November December January February March

7-Apr 31-Mar
T
i
m
e
Eligibility for relief is
End of
R dependent on the
project
e Period of Relief Granted by Part 2 COTMA from LDs provisions of the
l [Subject to justifications of actual duration of disruption] contract
i 7-Apr 6-Aug
e Statutory Universal EOT: 122 Days
f [Max 122 days less any EOT granted (if any)]

C
o
s
t
Eligibility for relief is
R [Attracts Qualifying Costs] [Attracts Qualifying Costs] dependent on the provisions
e of the contract
l
i
e
f

@DerickChow 139

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COTMA: GENTLE REMINDER

If your firm has not served a Notice of Relief to the upstream

party, it is advisable to do so before 31 March 2021

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Contractual/Ex-Gratia Claims
for COVID-19 Disruption
Beyond 31 March 2021

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POST-COTMA [EXISTING CONTRACTS]

Contractor may probably rely on the changed operating environment to

seek deferment of completion date based on the disruptive factors such
as:
 regular mass Swab tests, decanting of workers, safe distancing
measures and other Safe Management Measures;
 shortage of skilled workers as the movement of workers across
borders are being subjected to fairly rigorous protocols; as a matter of
fact, supply of tradesmen like tilers is short;
 Productivity is much lower than planned when the parties entered into
the construction contract; steep drop in productivity not contemplated
by any reasonably competent and experienced contractor.

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COVID-19 AND IMPACT IN PRODUCTIVITY

● “The impacts of COVID-19 now are generating productivity losses of about 35% on
U.K. construction projects, according to a new study by research consultant Turner &
Townsend, based on data from 70 medium-sized commercial jobs” [ENR 29 Jun
2020]

● “Released in July, the U.S. findings detailed that the construction industry
experienced a 15-18% decline in productivity as the pandemic spread” [Raizner
Slania LLP 10 Dec 2020]

● “…safety measures still in place for migrant workers, such as the splitting of workers
in separate zones in worksites, will create a lot of waiting time that will “severely”
crimp their productivity. For his firm, he estimates a minimum of 15 to 20 per cent
loss in productivity” [Todayonline 14 Aug 2020]

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ACTUAL DATA FROM A LOCAL BUILDER IN SINGAPORE

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COVID-19 AND IMPACT IN PRODUCTIVITY

● “Lost productivity claims are not unique to the context of the Covid-19 pandemic;
however, as contractors now find themselves performing their work under different
conditions from those contemplated at contract formation, it may lead to an
increase in contractors pursuing such claims. Documenting causation will be
essential as projects move forward post Covid-19 and contractors seek compensation
for productivity-related impacts resulting from altered working conditions”
[Construction Law International Sept 2020]

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COVID-19 AND IMPACT IN PRODUCTIVITY

Loss of Productivity Claims

● A claim for time relief due to loss of construction productivity is not actionable per
se unless it is premised on either:
○ an owner-caused event [e.g. equipment supplied by owner’s direct supplier like chillers
were defective; replacements disrupted the regular progress of the works; or

○ a risk event expressly or impliedly assumed by the owner as attested in the agreement [as
could possibly be implied from some of the standard forms of contract]

● Ex-gratia request for time relief on the ground that the pandemic has affected the entire
industry and the operating environment is vastly different from the Pre-COVID business
conditions; shortages in labor supply are not within the control of the contractor and
deem as an intervening event

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POST-COTMA [NEW CONTRACTS]

Developer will may probably disclaim and responsibilities if another

pandemic were to break out in the future to the extent of contracting out
of the COVID-19 Act:

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POST-COTMA [NEW CONTRACTS]

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POST-COTMA [NEW CONTRACTS]

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