NEC lays the foundations for Singapore growth in collaborative contracting with release of new Y Clauses

NEC has released secondary Option clauses for use in Singapore to support the use of NEC4 Engineering and Construction Contracts in the region. The clauses, which cover national legislative requirements for contracts, were produced in parallel with the Singapore Building and Construction Authority (BCA).

BCA is projecting a steady increase in construction demand for the next four years, projected to reach between S$31 billion and S$38 billion per year from 2025 - 2028. The need for efficient and well managed building projects and civil engineering works will increase and introducing the Optional Y clauses puts NEC in a strong position to support the successful delivery of this construction pipeline.

BCA CEO Mr. Kelvin Wong said, “The release of Y (SG) Clauses to align NEC4 Engineering and Construction Contract (ECC) with Singapore’s laws, will facilitate the use of NEC Contracts in Singapore’s construction and engineering projects. This is another milestone as Singapore seeks to overcome issues in conventional construction contracts to build trust, strengthens communication, and facilitates a more balanced share of risks among contracting parties. It also nudges parties to consider and implement solutions to address the issues identified to avoid additional costs and project delays. Having seen the positive impact of NEC Contracts in overseas projects, we look forward to the successful pilot of our own projects. It is a step forward in our commitment to drive excellence and collaboration in project delivery, in line with our refreshed Built Environment Industry Transformation Map goals."

The use of NEC offers a contract family designed to stimulate good management of the project's relationships. This collaborative approach to risk management, including through NEC’s Early Warning Process, improves the speed and efficiency of handling challenges throughout the project.

Rekha Thawrani OBE, Global Director of NEC Contracts said, “We have been engaging with BCA in Singapore to increase understanding of the benefits of NEC and look forward to continuing our partnership as their collaborative contracting journey progresses.”

BCA has been working with industry partners to widen the adoption of collaborative contracting in Singapore. Public sector developers such as the Housing and Development Board (HDB), JTC Corporation (JTC), and Land Transport Authority (LTA) will be piloting the use of NEC4 ECC in their upcoming projects. The Optional Y clauses enable the contracts to be used alongside legislation, including The Building and Construction Industry Security of Payment Act 2004, which facilitates prompt payment for construction work done and supply of construction related goods and services.

They also support The Contracts (Rights of Third Parties) Act 2001, which provides additional ways in which a third party can obtain rights under a contract, as well as dealing with requirements relating to termination and prevention of corruption.

Peter Higgins, Chair of the NEC4 Contract Board welcomed the release of these Y clauses saying “These Y clauses provide contracting parties in Singapore with the necessary provisions to fully implement NEC4 Engineering and Construction Contracts and achieve the benefits of the contract form’s collaborative approach. Working with the legal and contract experts in BCA has been invaluable in identifying the need for these Y clauses and has helped to shape their drafting.”

NEC wishes to thank Bernard Ang, Isabelle Chan and Chen Han Toh from Pinsent Masons for their contributions to the development of these clauses. NEC also acknowledges the support and help provided by the NEC4 Contract Board.

Access to the contracts is available here - https://www.neccontract.com/getmedia/af31fd1a-0672-4b44-ba21-a68e4c0902f6/NEC4_Y-SG.pdf