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MEDIA RELEASE

BCA TO BOOST PRODUCTIVITY THROUGH HROUGH TIGHTER BUILDABILITY Y AND CONSTRUCTABILITY REQUIREMENTS & ENHANCED INCENTIVES
Singapore, 11 March 2013 BCA introduced new ew measures to further spearhead construction productivity and quality growth in the built environment sector. sector These include: a) Raising minimum buildability and constructability requirements for all new projects to accelerate the adoption of more buildable designs and productive construction methods (refer to Annex A) Capability Fund (CPCF) to b) Enhancing the Construction Productivity and Capability boost incentives and support for companies, companies, especially the smaller firms, to kick-start start their productivity journey (refer to Annexes B and C) Raising minimum buildability and constructability requirements re 2. The Building and Construction Constr Authority (BCA) is set to raise the minimum buildability and constructability ility score requirements for all new projects by 3 points each in July 2013 and another 2 points in July 2014. 3. This is aimed at improving productivity across the entire construction value chain starting from planning and design to construction. Based on past projects projects, a 5point increase in the buildability score will yield manpower savings of approxim approximately 10% to 15%. 4. With higher buildability requirements, architects and engineers upstream in the construction value chain will have to consider the productivity requirement early and ensure that building designs are easier and more efficient to construct. This means that building designs will have to include more productive technologies and wider adoption of standard components to allow for ease of construction. construction. For example, designs involving the use of brickwalls and plastering finishes which are more labour-intensive, intensive, would be strongly discouraged under the buildability requirements.

5. In addition, contractors downstream will have to exploit technology and productive methods of construction, as well as improve their work processes to meet the higher constructability requirements. 6. To set a benchmark for the rest of the industry to follow, the government will take the lead by requiring public sector projects to adopt buildability and constructability standards higher than the new minimum requirements. 7. Developers will also have to meet higher buildability and constructability standards for new private developments on Government Land Sales (GLS) sites, and productivity requirements will be introduced for existing bonus Gross Floor Area (GFA) schemes. 8. To encourage consultants and contractors towards more buildable design and adoption of advanced construction technologies, BCA will be introducing tendering advantage for both consultants and contractors with good buildability and constructability records respectively, in their tenders for public sector projects with effect from 15 July 2013. BCA is also exploring bonus incentives for both consultants and contractors to further encourage them to go far beyond the minimum legislated buildability and constructability scores. 9. Currently, most building projects are just meeting the minimum buildability and constructability requirements. However, there are also some that have exceeded the mandatory buildability and constructability standards by a significant margin. While we are taking bolder steps to boost productivity in the built environment sector, we will carefully monitor the effectiveness of such measures and ensure that they are doable, said CEO of BCA, Dr John Keung. Enhancement of the Construction Productivity and Capability Fund (CPCF) 10. To further support productivity efforts and extend more help to contractors and consultants, BCA is enhancing its incentive schemes under the Construction Productivity and Capability Fund (CPCF). To date, about $85 million of the CPCF has been committed, benefitting more than 2,300 individual firms, of which more than 80% are small firms. 11. The funding level of the Mechanisation Credit (MechC) and Productivity Improvement Project (PIP) schemes will be raised from 50% to 70% for firms which achieve at least 30% improvement in productivity. 12. With this enhancement, contractors can now receive more funding support when purchasing or leasing equipment like the auto-wheel washer or boom lift when they tap the MechC scheme to improve productivity. Companies can also receive additional reimbursements for their investments when tapping on the PIP scheme to improve their site processes and adopt advanced construction technology.

13. Furthermore, funding caps for firm and industry-level1 applications under the PIP scheme will be raised to encourage more firms to bring in new technologies. For firm-level applications, the funding cap will be increased from $100,000 to $300,000 for the adoption of key productive technologies. Such technologies include the system formwork, prefabricated bathrooms, self-compacting concrete, and precast and steel construction. BCA will also raise the funding cap for industry-level applications to $5 million per application for projects that are game-changing and achieving at least 40% productivity improvement. 14. Lastly, BCA will introduce a MechC Referral Programme to encourage contractors to help their smaller sub-contractors overcome their inertia in improving productivity. Contractors can earn an additional $20,000 credit to increase their funding cap as an incentive for every successful referral to the MechC scheme. 15. Dr John Keung said, These measures will help companies in the built environment sector make the transition, so that the sector as a whole will be transformed into one which is highly integrated and technologically advanced, and supported by a skilled and competent workforce. 16. BCA will be meeting industry stakeholders over the next two months to share these new measures and incentives, and work through the implementation details. Issued by the Building and Construction Authority on 11 March 2013
About BCA The Building and Construction Authority (BCA) of Singapore champions the development of an excellent built environment for Singapore. BCAs mission is to shape a safe, high quality, sustainable and friendly built environment, as these are four key elements where BCA has a significant influence. In doing so, it aims to differentiate Singapores built environment from those of other cities and contribute to a better quality of life for everyone in Singapore. Hence, its vision is to have "the best built environment for Singapore, our distinctive global city". Together with its education arm, the BCA Academy of the Built Environment, BCA works closely with its industry partners to develop skills and expertise that help shape the best built environment for Singapore. For more information, visit www.bca.gov.sg.

Industry-level projects are actively led by a public sector agency with at least two unrelated firms.

Annex A: Buildability and Constructability

Legislation on Buildability The legislation on Buildability was introduced by the Building and Construction Authority (BCA) in 2001 under the Building Control Act to promote buildable design through greater adoption of prefabricated, modular and standardised building components. Under the legislation, building designs are required to comply with a minimum buildability score. While the industry has gained more experience with buildable designs, more could be done to enhance buildability and further reduce labour usage. Good buildable designs will have to be complemented by the adoption of labour-efficient technologies and methods to improve productivity at the construction stage. To achieve this, the Buildability framework has been strengthened to require designers to deliver more buildable designs upstream, and builders to adopt more labour-saving construction methods / technologies downstream. Since July 2011, builders have to comply with a minimum constructability score which encourages the use of construction technologies, methods and processes that reduce the industry's reliance on foreign workers. About Buildability Score The buildability score computes the extent of standardisation, simplicity and integrated elements applied to projects at the design stage. It measures the potential impact of a buildings design on labour usage. The maximum points for a buildings design is 100 points, of which 50 points are allocated to structural systems (to be revised to 45 points with effect from July 2013), 40 points to wall systems (to be revised to 45 points with effect from July 2013) and 10 points for use of other buildable features. The higher the buildability score obtained by a project, the easier it is to construct. About Constructability Score The constructability score measures the level of adoption of labour-efficient construction methods and construction processes such as system formwork and climbable scaffolding. Higher constructability scores would translate to savings in manpower cost and shorter construction time. Higher Buildability and Constructability Requirements To compel the industry to step up the adoption of more buildable designs and innovative technologies, BCA will be introducing the following measures to improve construction productivity: Raising minimum buildability and constructability requirements for new projects in July 2013 and July 2014, to speed up the adoption of more buildable

systems and more productive methods of construction. With greater use of productive technologies like prefabrication, our construction sites will also become cleaner, tidier and less noisy. Public sector projects taking the lead in meeting higher minimum buildability and constructability scores, to pave the way for the private sector projects to catch up. Requiring private residential and industrial developments for new Government Land Sales (GLS) to meet buildability and constructability standards beyond the new minimum requirements. Introducing productivity requirements for existing bonus GFA schemes Bonus scheme for consultants and contractors for projects achieving high buildability and constructability scores respectively Tendering advantage for consultancy firms and contractors which have achieved higher buildability and constructability scores To give recognition to consultants who can achieve higher buildability in projects, the buildability score will be introduced as a mandatory quality attribute accounting for 15% of the overall quality point, when evaluating tenders under the Quality-Fee Selection Method (QFM) framework. This will take effect from 15 Jul 2013. The QFM is used to procure consultancy services for public sectors building and construction projects. Furthermore, the constructability score will be introduced as a mandatory quality attribute accounting for 15% of the overall quality point, when evaluating tenders under the Price-Quality Method (PQM) framework. This will also take effect from 15 Jul 2013 to recognise the adoption of labour-saving construction methods and technologies. The PQM applies to all public sector construction tenders under the BCA Construction Workheads (CW01) and with an Estimated Procurement Value (EPV) of $3million and above.

Annex B: Mechanisation Credit (MechC) Scheme

The Mechanisation Credit (MechC) scheme provides funding to contractors (especially subcontractors and smaller contractors) to reduce cost incurred in technology adoption, such as the purchase and leasing of equipment to improve work processes. As of end Feb 2013, 1,316 applications were supported under the MechC scheme from 463 firms, with $28 million committed. Out of these applications, 64% are from the small builders. Enhancements to the MechC Scheme Higher funding levels The funding level of the MechC scheme will increase from 50% to 70% for construction firms which can achieve a higher productivity improvement of at least 30%. The enhancement will especially benefit smaller contractors as they can receive higher funding for the purchase or lease of smaller equipment. To qualify for the enhanced MechC scheme, firms would also have to show that they are progressively building capability in areas such as financial standing, human resource development, certifications and awards. The enhanced MechC scheme would run alongside the existing standard MechC scheme: Standard MechC Scheme (Existing) (firm must achieve at least 20% productivity improvement) Equipment cost < $100,000, grant up to 50% or capped at $20,000 whichever is lower. For Purchase of Equipment Equipment cost > $100,000, grant up to 20% or capped at $100,000 whichever is lower. For leasing cost<$30,000, grant up to 50% or capped at $6,000 whichever is lower. For Leasing of Equipment Enhanced MechC Scheme * (firm must achieve at least 30% productivity improvement) Equipment cost < $125,000, grant up to 70% or capped at $25,000 whichever is lower. Equipment cost > $125,000, grant up to 20% or capped at $100,000 whichever is lower. For leasing cost<$30,000, grant up to 70% or capped at $6,000 whichever is lower.

For leasing cost > $30,000, grant up to 20% or capped at $30,000 whichever is lower.

For leasing cost > $30,000, grant up to 20% or capped at $30,000 whichever is lower

Table 1: MechC funding table with existing and enhanced scheme

Types of Productive Equipment currently supported by MechC Types of Contractors Electrical Contractors Examples of Equipment/Tools Aerial Work Platforms -boom lift -scissor lift Productivity Improvement 65% productivity improvement compared to metal scaffolding platform

General Builders

Spray Paint Machine

35% productivity improvement compared to roller and brush method

General Builders

Builders Hoist

40% productivity improvement compared to the use of a wheel barrow

General Builders

Auto-Wheel Washer

100% productivity improvement compared to manual washing

MechC Referral Programme

The MechC Referral Programme incentivises contractors who have successfully tapped on the MechC incentive scheme to share with their smaller subcontractors the benefits of the scheme and the need to improve productivity. Through sharing and partnerships between main builders and their subcontractors, this will help the entire construction value chain achieve higher productivity. Currently, the MechC has a funding cap of $250,000 per firm. Under the MechC Scheme Referral Programme, the builder can earn an additional $20,000 credit to increase the per-firm funding cap, as an incentive for every successful referral.

Annex C: Productivity Improvement Project (PIP) Scheme

The Productivity Improvement Project (PIP) scheme encourages contractors and prefabricators to embark on development projects that build up their capability and improve their site processes. Projects can be worked on at an individual firm level, in groups of at least two unrelated firms or at the industry level led by a public agency with two other private firms. Under the PIP scheme, the following costs are supportable on a co-funding and reimbursement basis:

Manpower Equipment and materials Professional Services / Subcontracting Acquisition of Intellectual Property Rights

As of end Feb 2013, 218 applications have been received from more than 120 companies, with a committed funding of more than $27 million. Out of these applications, 40% are from small firms. Enhancements to the PIP Scheme The adoption of technologies such as system formwork, drywall, modular and volumetric construction, prefabricated bathrooms and the automation of precast component production would require firms to incur heavy capital investments. To jump-start the adoption of these technologies and overcome the industrys inertia at the initial stage, BCA is enhancing the PIP scheme to provide stronger support for the wider adoption of these technologies which will bring about significant productivity gains and reduce firms reliance on workers. The enhanced PIP will include higher funding levels and a higher funding cap for firm level and industry level applications. To qualify for the higher funding caps, firms need to demonstrate capability development and achieve higher productivity improvement. Enhanced PIP Category Standard PIP Funding Level Funding Cap Co-fund up to Co-fund up to Cap at $300,000 per 50% 70% application (for selective key Cap at $100,000 technologies) per application (firm must achieve at least 30% productivity improvement)

Firm

 Co-fund up to Co-fund up to Cap at $500,000 per 50% 70% application generally. Cap at $500,000 (firm must achieve per application Prefabricators at least 30% generally. productivity improvement) Co-fund up to Cap at $500,000 per Co-fund up to 70% application. 50% Cap at $500,000 (firm must achieve per application. at least 30% productivity improvement) Co-fund up to Co-fund up to 70% 70%. Cap at $1 million per application Cap at $5 million per application

Group (at least two unrelated companies)

Industry (To be actively led by a Public Agency with at least two unrelated companies)

(firm must achieve at least 40% productivity improvement)

*For firms, prefabricators and groups: To qualify for the increase in funding level from 50% to 70%, firms will have to show evidence that they are progressively building capability through areas such as financial standing, human resource development, certifications and awards. **For firms: Should they adopt key productive technologies, they qualify for an increase in funding cap from $100,000 to $300,000. Some examples of such key productive technologies include: (a) System formwork (b) Prefab bathrooms (c) Self-compacting concrete (d) Precast and steel construction

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Examples xamples of technologies supported by the PIP scheme

Technology Benefits 45% manpower savings as compared to traditional bathroom works on site

Prefab Bathrooms

System Formwork

30% manpower savings as compared to timber formwork

Dry Wall

65% manpower savings as compared to conventional brickwall construction

Precast Construction

25% manpower savings as compared to conventional reinforced concrete construction

Self-compacting Concrete

50% manpower savings as compared to the use of normal concrete

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