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Since the consultation document on Proposed Security of Payment Legislation (SOPL) for the Construction Industry in June 2015 and the report of the consultation in April 2016, the SOPL Bill has yet to be put before the Legislative Council for consideration. The Government released a draft Technical Circular on the Implementation of the Spirit of Security of Payment Legislation in Public Works Contracts (Draft Circular) and a reference document in mid-March 2021. Stakeholders are given approximately 2 weeks to make comments on the Draft Circular, i.e. by end of March 2021.
SOPL aims at promoting fair payment and assist main contractors, subcontractors, consultants, sub-consultants and suppliers to receive timely payments.
Whereas the 2015 consultation document covers both public and private sector projects, the Draft Circular aims at implementing certain measures of SOPL only on public works contracts, term contracts and related subcontracts tendered after July/August 2021. The main contractor will be bound to adopt those measures through the use of special conditions and additional conditions in the main contract.
There are 4 mandatory requirements under the Security of Payment (SOP) framework:
On the subject of whether the scope of adjudication should cover payment disputes involving extension of time (EOT), the Government recognises that a majority of the industry stakeholders supported that an adjudicator shall have the power and jurisdiction to decide:
The Draft Circular only covers all construction subcontracts and sets out:
The Contractor’s compliance with the incorporation of the SOP Provisions in all relevant subcontracts shall be reflected in the Contractor’s Performance Report.
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