dk@dkoutsource.com
Summary: Under Singapore’s Public Sector Standard Conditions of Contract (PSSCOC for Construction Works 2020), project delays can quickly escalate costs through prolonged labor, idle plant, extended preliminaries, and tied-up site resources. However, recovering additional costs is never automatic. To protect entitlement to loss and expense, contractors must strictly adhere to statutory procedures—specifically serving notice within 60 days under Clause 23.1, submitting detailed particulars within 30 days, and maintaining contemporary site records. Waiting until the final account to quantify financial impacts can permanently forfeit otherwise legitimate claims.
Understanding Loss and Expense Under PSSCOC
Loss and expense refers to direct costs incurred when the regular progress or completion of the works is disrupted, prolonged, or materially affected by events covered under the contract.
- Recoverable Cost Categories: Direct relevant costs actually incurred, including labour, plant, construction equipment, materials, goods, and specified site overheads.
- Contractual Limitations: The PSSCOC expressly limits recovery; contractors cannot assume every delay cost is automatically reimbursable.
The 60-Day Notice Period as a Condition Precedent (Clause 23.1)
One of the most frequent pitfalls in public sector contract administration is waiting until the full financial impact is known before notifying the Superintending Officer (SO).
- Strict Statutory Timeline: Written notice must be served to the SO within 60 days after the event giving rise to the claim first arises.
- Required Contents: The notice must explicitly identify the underlying event (such as late instructions, scope changes, or restricted site access) and its anticipated consequences.
- Condition Precedent: Serving notice within this 60-day window is a mandatory condition precedent to contractual entitlement. Missing this deadline can bar financial recovery entirely.
The 30-Day Substantiation Requirement & Continuing Events
Giving notice is only the initial step in securing a claim:
- 30-Day Detailed Account: Within 30 days of issuing notice, the contractor must submit a detailed account setting out the specific particulars of the amount claimed and the underlying contractual grounds.
- Continuing Delay Events: For prolonged delays where costs accumulate over time, the contractor must submit interim accounts as the event continues, followed by a final account once the delay impacts cease.
Time vs. Money: Establishing the 3-Part Causal Link
A common misconception among project teams is assuming an approved Extension of Time (EOT) automatically yields financial compensation. Under PSSCOC, disruption or prolongation costs are only recoverable in accordance with express contract terms.
To substantiate a loss and expense claim, a contractor must prove three distinct elements:
- What happened? (The qualifying contractual event)
- What was the effect on the works? (Impact on programme and physical progress)
- What additional cost was actually caused by the event? (Direct financial causation)
Picture by Cottonbro
Mandatory Contemporary Records (Clause 23.2)
Clause 23.2 obligates contractors to generate and maintain contemporary records at the time the event occurs, rather than attempting to reconstruct evidence months later. The SO maintains contractual authority to inspect these records.
| Record Typ | Core Purpose & Value |
| Site Diaries | Documents exact daily site occurrences and timelines. |
| Labour Records | Substantiates additional manpower hours and idle labor costs. |
| Plant & Equipment Logs | Establishes prolonged standing or rental costs for site machinery. |
| Programme Updates | Demonstrates the actual effect on overall project progress |
| Correspondence & Progress Logs | Confirms site instructions, responses, and real-time operational impact. |
| Cost Records | Verifies the exact monetary sums being claimed. |
Proactive Claims Management & Internal Tracking
Claims administration should be integrated into daily project management rather than deferred to project completion. Project teams should establish an internal Claims Tracker to monitor key milestones:
- Date the event first arose and the resulting 60-day notice deadline
- Specific PSSCOC clause relied upon
- Delay and programme impact analysis
- Required contemporary records and actual costs incurred
- Interim claim dates and the final account submission deadline
References
- Building and Construction Authority – Public Sector Standard Conditions of Contract (PSSCOC) — BCA’s current PSSCOC resource page, including the Construction Works 2020 8th Edition and Design & Build 2020 7th Edition.
- BCA – PSSCOC for Construction Works 2020 — Source for Clause 23 on notice of claims, contemporary records and substantiation of claims.
- Singapore High Court – 2026 SGHC 12 — Recent Singapore High Court decision discussing PSSCOC provisions on Loss and Expense and the contractual limits on recovery.
- CMS – Latest amendments to the PSSCOC standard forms in Singapore — Commentary on amendments to the PSSCOC, including the definition of Loss and Expense.
- Chambers – Construction Law 2026: Singapore — Current overview of Singapore construction law, including PSSCOC delay, EOT and loss and expense issues.
