RISK ASSESSMENT AND COMPARATIVE STUDY OF REDAS DESIGN AND BUILD CONTRACT CLAUSES

Abstract

The Real Estate Developer’s Association of Singapore (REDAS) Design and Build Contract Form is a common contract form used in Singapore’s private construction projects. However, its provisions were recognized as very pro-Employer, being largely formulated to serve their objectives. Thus, this dissertation aims to assess the REDAS Contract for risk sharing through the evaluating selected domains of the contract, and perform comparative analysis with other common contract forms practised in Singapore (PSSCOC and FIDIC). The areas of research are regarding clauses on Extension of Time, Differing Site Conditions and Termination by Employer, including the Taking Over Without Termination clause exceptionally provided under REDAS.

Following which, a quantitative approach was taken for this study through the conduction of a survey questionnaire amongst the industry stakeholders. They were asked to provide their perspective on the risk-allocation of the clauses from the given contract forms, generating a numerical indication of the extent to which responsibilities were placed disproportionately on the Contractors. The results facilitate the evaluation of the clauses as well as the final recommendations provided in this paper.

Using a T-Square Test, the results of data analysis have revealed that REDAS is regarded to place significantly more risk on the Contractors as compared to the other forms. Corresponding recommendations were made to the potential modification of the REDAS form, directing towards areas which the survey respondents ranked particularly high. The author proposes the practice of risk-allocation to the party with the best ability to control and manage, and the sharing of risk for unforeseeable and unavoidable events, which are beyond one’s control, between both Employer and Contractors. Fairer risk-allocation is not only to alleviate burden off Contractors, but more about the enhancement of cost effectiveness and project efficiency by preventing disputes which would end up in litigation or arbitration, and the establishment of good working relationships.