Speech by Minister Lawrence Wong at the BCA Awards 2017
Jun 13, 2017
I am very happy to join all of you this evening for the BCA Awards Night. I was here last year for this very event – it was my first time – and I was struck at the scale of it. I am very glad to be back for the second time attending this Awards Night. It is the high point for all of you to recognise excellence in all aspects of the building sector – development work, architecture, engineering, design, and construction.
I want to congratulate all the award winners on a job well done and thank you for doing your part to shape our built environment and building our urban landscape.
I understand that this is a challenging time for the industry. I want to assure you that the Government is doing its best to support the sector.
In this year’s Budget, we have announced an additional $700 million in construction projects and this is on top of the significant pipeline of public sector projects that are already in place. Of the $700 million in projects that we have decided to bring forward, about $160 million are already in the design stage, and the tenders will be called by the second half of the year. For the remaining amount, we will try to put out as soon as possible by next year because the intent is to benefit our contractors. For the whole of 2017, we will be awarding many more contracts than we have had in 2016. So in terms of public sector contracts awarded, you can be assured that 2017 will see significantly more projects than 2016. This is our way to help support our contractors as well as the built environment sector. Meanwhile, we will continue to monitor industry trends closely and if necessary, we will be prepared to do more.
For many of you, this is not the first time facing challenging times. You have been through ups and downs in the property market and in the construction sector. In the down-cycle, there are pressures to consolidate and cut down on costs. But we must also make sure we do not compromise on quality in the projects that we do. Instead we should treat the challenges as opportunities to restructure and upgrade our capabilities, so that we can emerge stronger when the market turns around.
This is an area of concern in the current climate, where we have seen and we are continuing to see very aggressive price bidding by both consultants and contractors. Price competition is not a bad thing. It can help to drive innovation and productivity. But unhealthy price competition can lead to negative consequences for the whole industry. We know of cases where consultants and contractors bid very low and unrealistic prices just to secure the contract, but then later on end up having to cut cost, and worse, to cut corners. As a result, quality suffers and is compromised.
So we should not let such practices continue. If it becomes more pervasive, the overall capabilities of the sector will be eroded and quality will be compromised.
What we intend to do is to “re-balance” the price and quality equation by putting more emphasis on quality for both consultancy and contractor services. The Government will do its part by reviewing our public sector procurement processes.
Today, we already use the Quality-Fee Method (QFM) and Price-Quality Method (PQM) for the procurement of consultancy and contractor services. We intend to fine-tune the processes further. Let me just quickly share some of our ideas.
First, we will raise the weightage of quality in our overall evaluation for public sector projects. For example, in PQM today, the quality score typically accounts for about 30% in weightage. We will raise this percentage.
Second, we will have more robust and rigorous quality assessment. It can be 30%; it can be 40%, but if all of the quality scores are about the same, then it is really quite meaningless. So we need to have more robust assessment of quality, and we will do so by examining the performance of firms in previous projects. For example, we will look at the CPAS scores (for consultants) and C41 scores (for contractors). Firms that have consistently produced quality work will have an advantage over firms that have under-performed.
We will scrutinize the bids to see if sufficient resources have been allocated to get the job done. Hopefully, this will deter firms from fee-diving to win projects, only to cut down on man-hours or cut down on quality down the road. Essentially, we want firms to bid sustainably to deliver the high-quality work expected of them. By the same token, we will be stricter in penalising firms that fee-dive to secure contracts, but do not deliver or adhere to the necessary quality standards.
We will give more weight to companies that adopt more innovative and productive methods, especially contractors that are able to get the job done with fewer manpower using advanced construction methods.
We will also recognise firms that are prepared to invest and build capabilities in our local built environment sector. In this way, we give more opportunities to firms that are anchored here for the long-term and are committed to growing the sector and making it more productive.
Third, even as we focus on quality in our assessments, we will also do more to share quality scores with firms. Today, firms are aware of their price bids and that of their competitors, but they do not know where they stand in terms of quality assessments. So it is hard for them to identify areas to improve.
We will provide greater transparency on quality assessment including the CPAS and C41 scores, so that firms are aware of where they fall short, and can also benchmark themselves against the best-in-class quality performers. What we want to achieve is a dynamic where firms compete not just on price – because price is the only indicator they have – but also compete in terms of quality.
These are things we can and will do for public sector procurement; but quality is also important for private construction projects, and it is important to help buyers make more informed choices.
We established the CONQUAS and Quality Mark (QM) in 1989 and 2002 respectively. Both schemes recognize quality workmanship and finishing for contractors and developers. When the schemes first started, the average CONQUAS score was 68 points; today, the average CONQUAS score has gone up to 89. When QM started, the average score was 78 points; today, it is 91. Overall quality has improved.
We have made CONQUAS mandatory for GLS sites. QM is still a voluntary certification scheme, but the number of private residential units adopting QM has increased steadily, from 17,000 a decade ago to about 84,000 today.
More importantly, we have observed that properties with QM certification tend to have fewer complaints about defects. So it suggests that getting a QM certification makes a difference that consumers themselves can discern.
It so happens that this year is the 15th anniversary of QM. BCA has launched a new Quality Star Champion Award to recognise developers and builders who have consistently achieved high QM performance.
I am happy to announce that City Developments Limited (CDL) and Woh Hup (Private) Limited are our two inaugural Quality Star Champions. Over the past 5 years, more than 6,000 CDL residential units have been QM-certified and 7,200 Woh Hup residential units have been QM-certified. Congratulations to both companies and hope you will encourage others towards the pursuit of quality projects.
While we have done well and our quality scores have improved, and we have launched a new category of awards, there is much more we can do. In line with the push towards transparency of quality information, we are now studying how to publish and make more accessible the CONQUAS scores as well as the QM ratings.
Today, BCA already publishes the CONQUAS scores and QM ratings by projects on its website. But it is not very easy to access the information online or to compare the scores across developers, builders and contractors. We should do better and try to put out the information in a more user-friendly format, so that consumers can compare the information in a meaningful sort of way. BCA will be working on this.
We will also require such quality information on CONQUAS and QM scores to be published in sales documents – in other words, we want developers and contractors to state explicitly in these documents the CONQUAS scores and QM ratings that have been achieved from previous projects; and if they have no such track record, then they should also state so explicitly. It is important to put out such information because these are quality considerations that consumers would be concerned about, especially if they want to purchase a unit off-plan. Greater access to such quality scores will help consumers make more informed choices. These are things that we are studying and will be rolling out in due course.
I have shared broadly some of the plans to push for higher quality in the built environment sector. These are work-in-progress – we will continue to engage and consult stakeholders, and fine-tune our policies, before implementing them.
These efforts are part of our Built-Environment Industry Transformation Map (ITM). We have a committee set up to oversee the ITM work. It is co-chaired by Second Minister (Home Affairs and National Development) Desmond Lee and CEO of CapitaLand Lim Ming Yan. It involves stakeholders from all aspects of the sector. All of you will be involved. We want to work with all of you to help upgrade and transform the industry.
One feedback that we have heard consistently is the need to ensure that our students are ready for the changes being put in place in the sector. For example, we often talk about the need to have collaborative BIM and have new ways of building, where it is not just architects passing the BIM to engineers and then passing it on to the contractors. It is about the different stakeholders coming together to work collaboratively on the same BIM model and on the project together. We are trying to make this happen in the industry.
Just as we push for change in the industry, we also need to get our students to start thinking and working in the same manner – not just in silos, but in multi-disciplinary settings that will prepare them for the real world.
We will be setting up a Taskforce to incorporate relevant skills into the curriculum of our universities and tertiary institutions across the various disciplines. The taskforce will work with the Institutes of Higher Learning (IHLs) and our industry stakeholders.
We know that this work will take some time. So in the interim, we will also work with the IHLs to explore introducing a capstone programme for graduating students. One idea is to have a bridging course of about 1-2 weeks, focusing on the areas which I have mentioned earlier. The aim is to help graduating students attain deeper industry knowledge and better prepare them for work. Again, this is still work-in-progress, and we will fine-tune the idea and put out more details when we are ready later this year.
In conclusion, the pursuit of quality and excellence is an ongoing journey. We must never be complacent and must always strive to do better. But even as we strive to work harder to do better, from time to time, we should also take stock and celebrate our achievements, like what we are doing tonight.
So on this note, let me congratulate once again all the BCA Awards recipients. Thank you for your efforts in creating a world-class built environment sector in Singapore.
Thank you and enjoy the evening.