BPM109: A Taiwan Semi-Conductor Company (“TC”) intends to build a S$1 Billion: Contract Administration Assignment, SUSS, Singapore

Question:1

A Taiwan semi-conductor company (“TC”) intends to build a S$1 billion fabrication plant in Singapore. To meet the market demand, the plant has to be constructed within 6 months. LalaFast Contractor (“LC”) tenders for the project and offers the lowest quote at S$650 million but they are not awarded the tender. LC writes to TC and threatens to take legal action against TC.

The contract was subsequently awarded to another contractor, Orange Contractor (“OC”) at a price of S$700 million after the appointment of an Architect to manage the project. The SIA lump sum contract was used and the contract completion date was stated as 31 March 2020. It was also stated that OC would be liable to pay liquidated damages (LD) of S$100 million per
day until the works were completed.

Answer the following questions. Support your answer with case law, where appropriate.
(a) Explain TC’s liability to LC.

(b) Discuss whether TC should pay liquidated or unliquidated damages to OC.

Question 2
An Architect for an ongoing construction contract sent you a letter to ask you for advice on the following matters. The SIA measurement contract (9th Edition) was used for the project.

03-03, Radius Arcade
Singapore 383888

23 June 2020

Raymond Lee & Partners
Poly Tower
Clementi
Singapore 181810

Dear Raymond,

Re: Proposed Super Villa with half basement

I would like to seek your advice on the following matters:

a) I have just approved the contractor’s program which seems optimistic and shows the target completion date to be a month ahead of the contract completion date. Please advise me on the contractual implication of this program.

b) Please advise (with explanations) as to whether I should issue an architect’s instruction or an architect’s direction for the following situations:
(i) Increase the thickness of the footpath from 150mm to 200mm due to a change in the drawings during the construction period.
(ii) Hack off the plastering work (as marked by my Clerk-of-Works) at the 3rd story living room wall due to cracks, unevenness, and misalignment.
(iii) To add additional supports to the excavated areas as it was unsafe.
(iv) To change all normal glass at window areas to tempered glass due to a change in statutory requirements during the construction period.
c) I suspect that the structural steelwork for the two skylights that are already covered with aluminum panels does not comply with the contract requirements.

Yours faithfully
Steven Teo

Question 3
The following is a letter from a Contractor to the Architect claiming for extension of time. The SIA measurement contract (9th Edition) was used for the project.

X Men Architects
1000 Marvel Street
Singapore 271100

Attention: Ms. Wendy Yap
25 June 2020

Dear Madam

Re: Proposed 13th story Anson Road Office Block (Extension of Time Claim)

We wish to claim an extension of time for delays caused by the following events:

Event 1: On 1 June 2020, a group of secondary school children was playing with fireworks next to the construction site. Sparks from the fireworks landed on the petrol shed located inside the construction site resulting in a massive explosion. This damaged part of the Works. We are claiming 15 days extension of time for the repair works.

Event 2: On 10 – 12 June 2020, there was a strike by the port workers at Keppel port. This caused a delay in the delivery of marble tiles to the site. We are claiming 3 days of delay for this event.

Event 3: On 18 June 2020, several construction workers caught a snake at the site and cooked it for lunch. However, the workers became sick after eating it and were hospitalized for 2 days. This caused a delay to the plastering work.

Event 4: On 22 June 2020, as one of the workers residing at the worker’s site quarters was COVID positive, all our site staff were quarantined and the site was shut down.

The supporting documents for the above claims are attached herewith.

Please let us know your decision as soon as possible.

Yours faithfully,
Perry Ong
Contract Manager
Aztech Contractor Pte Ltd