THE IMPACT OF THE BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 2004 ON THE PRACTICES OF VARIATION CLAIM

Abstract

The Building and Construction Industry Security of Payment Act 2004 (the Act) came into operation on the 1st of April 2005. The Act was legislated to alleviate the cash flow problems of the industry. The Act provides statutory interventions to the contractual payment provisions in the industry. Therefore, the standard forms of contracts used in Singapore have been amended to make the contractual payment regime inline with the statutory payment regime. These amendments have changed the practices of variation claim and variation payment. This research focuses on 2 important aspects: amendments in Public Sector Standard Conditions of Contract (PSSCOC) 4th edition as impacts of the Act, and how these amendments change the practices of variation claim and variation payment. These findings allow an understanding of how the operation of the Act has affected the Contractor’s cash inflow in the variation claim. This is a qualitative-based research. Interviews were conducted with various professionals in the industry. This study is significant to conclude that, in practice, the operation of the Act has protected and strengthened the cash inflow of the Contractor in variation claim and payment.