Speech by Minister Lawrence Wong at the ACES 47th Anniversary Gala Dinner

Thursday, 22 March 2018

I am very happy to join you this evening to celebrate the 47th Anniversary of the Association of Consulting Engineers Singapore (ACES). 

We are able to build today’s Singapore for many reasons. One very important contributing factor is that we have a strong and effective corp of consulting engineers.  I would like to start tonight by acknowledging the contributions of all our engineers here, as well as the role of ACES in developing, guiding, and advocating for the profession. Thank you all for your contributions.

I know that the industry has gone through some difficult years. The property market has been soft in the last few years. But we can see some green shoots of recovery in the broader property market, and the construction sector. More projects are coming on-stream. Government projects have always been there; we have kept it steady. The decline in recent years was due to private sector projects, but some of them are coming on-stream. We hope that this year, the number of projects overall will increase, and we will be on the road to recovery for the construction sector, and this will also benefit the consulting engineers.

I want to assure you that the Government is here to listen to your feedback and concerns, and we are here to journey with you, to ride through the challenges, and emerge stronger through the process.

One of the feedback that many of you have shared with us is the issue of low fees. Indeed, because of the feedback that ACES and others have provided to us, we have adjusted the Government’s procurement framework to address this particular issue and to combat fee diving. 

Firstly, we now require more details in bids – it is not just a lump sum price. We have to separate the manpower deployed and the rates, so agencies can assess whether the proposed resources are commensurate with the quoted fees. If we see that firms are proposing something that is not realistic, we may very well discard that particular bid altogether.

Second, we are putting more emphasis on quality. There is a Price-Quality framework, and we have increased the percentage on quality. In fact, more than half of Government procurement projects are not given to the lowest bidder today; we are shifting the quality percentage to go higher. Within the quality percentage, one of the criteria will be to look at consulting firms’ past performance score. That creates a positive feedback loop, as consultants who have done well in previous projects, will score higher for quality, and the chances of securing a project would be higher. Conversely, a consultant who has not done well in the project before will have its quality score impacted, and any price diving may be counter-productive. These are adjustments we have made. Some of these have just been implemented by the various procurement agencies. So the impact may not be felt yet; but over a period of time, you will start to see this filtering through in the decisions that government agencies make in procurement decisions. In any case, we will continue to monitor the impact of these changes and make further adjustments, if needed. We want the industry to compete not solely on price, but also on quality, and to do so in a sustainable fashion.

The second area we have been discussing a lot is on productivity. We all know that it is not possible to continue building the way we do by relying on cheap foreign workers. This is not sustainable. We have to raise productivity levels. That is why we are pushing for new technologies like Building Information Modelling, or BIM. 

I am glad to hear that ACES is forming a group of BIM specialists – or BIM Gurus as you have called it – in order to push for BIM adoption.  We hope that this will continue to take off in the industry, and that more of you will practice this. It should not just be about having a model – we should actively use this, and harness digital technology to integrate work processes and make it more efficient. 

This is work that is ongoing, and we would like to work with you to see how we can further harness the potential of technology and make our construction industry much more productive.

I will share with you some ideas on what we can do further in order to promote greater industry collaboration. All of you know that our built environment industry today works in a very fragmented fashion. It goes from developers, architects, engineers, to contractors, in a very linear silo fashion. This is not unique to Singapore – this happens everywhere in the world. 

As a result, the developers, architects, engineers and contractors typically do not come together at the design stage. This results in building plans not being finalised at the design stage, and they can continue to change even after construction has begun. Often, you end up with delays and inefficiencies in the actual construction. We need to improve on this. 

In fact, if we want to harness the potential of technology and BIM, we have to work on our work processes as well. We have to get down to changing the way we build, and working in a more collaborative manner. How can we make changes? The Government is looking at three areas to encourage more collaboration.

First, we are encouraging multi-disciplinary project teams to get together at the upstream planning stage. We will specify this in our Government Land Sales (GLS) tenders. We have started to do this in one recent tender for the Hillview Rise residential site. It was launched recently through a Concept and Price tender. One of the requirements under the concept is that developers form their project teams during the land tender stage, and indicate how they want to collaborate and be more productive. Each team must work together to propose solutions to meet the specified productivity outcomes. 

We hope this upstream involvement of all stakeholders will facilitate more effective integration, reduce abortive work downstream, and make the whole process much more efficient. 

Second, we are reviewing the Public Sector Panel of Consultants (PSPC) framework to allow for collaborative bidding. This is something we have heard from the industry, and we agree there are potential benefits. By allowing PSPC-registered firms to come together to bid for bigger projects, it will enable knowledge transfer, and allow smaller firms to access complex projects and accumulate experience and capabilities. BCA is studying this to see how we can facilitate such collaboration amongst the different firms that are PSPC-registered.

Third, we are looking at how we can introduce the concept of Collaborative Contracting in the built environment sector. Collaborative contracting is not new; it is practiced in many other parts of the world. It is a type of contract form that encourages developers, consultants, and contractors to work towards common project goals. Essentially, the collaborative contract will incentivise parties to develop joint solutions to common problems. This will reduce disputes and enhance risk management for the project. We are working closely with the various industry associations to develop the contract form provisions. We hope that we can pilot this in public sector projects later this year.

These are three ideas we have to promote greater industry collaboration. We welcome more ideas and feedback from you, because all of us have to work together at improving the way we build today in Singapore.

Looking ahead, beyond this year, there is a large pipeline of public sector projects that are coming on-stream over the coming decade. We have plans to build Changi Airport Terminal 5, a new sea port in Tuas, to develop new districts like Jurong Lake District and Punggol, and other big projects coming up like the High-Speed Rail to Kuala Lumpur and Rapid Transit System Link to Johor. 

We have a long runway of such projects ahead which we can use to grow new capabilities in this industry. We hope we can work with you to make this transformation, and emerge from the difficult years that we have experienced recently to become stronger, more productive, and able to take on bigger projects.

Before I conclude, I would like to congratulate all the award winners tonight. The seven winners of the ACES Design Excellence Award exemplify the high standards of engineering design in our industry. We also have 12 winners of the Young Consulting Engineers Award who have made significant contributions. I especially want to commend the young engineers, as it is not easy to attract young Singaporeans into this field. We need to work harder at transforming the sector, and hopefully attract more young people to take engineering courses at the university.

I hope that the young engineers here can also inspire many more to look at the engineering profession, consider taking on engineering courses, and moving on into the industry as well.

Finally, I would like to thank ACES for your strong support as a partner of the Government in transforming the sector and raising productivity for the whole industry. ACES is part of our Construction Industry Transforming Map (ITM), the Built Environment Tripartite SkillsFuture (BEST) taskforce, and you also lead several of its engineering workgroups. We look forward to continuing our partnership with all of you as we go about transforming the industry, and building on the work that we have to ensure a better Singapore for the future. 

On that note, thank you very much, and congratulations once again on your 47th Anniversary. Have a very good evening.