Implementation of the Security of Payment Provisions in Public Works Contracts
Security of Payment (SOP) in Public Works Contracts and the Construction Industry Security of Payment Ordinance (Cap. 652)
Background
On 5 October 2021, the Government promulgated DEVB Technical Circular (Works) No. 6/2021 (“the Circular”), setting out the policy on implementing Security of Payment (SOP) Provisions progressively in public works contracts.
The SOP Provisions facilitate:
- Timely processing of contract payments; and
- Resolution of payment disputes through adjudication.
The Circular has been implemented in applicable tenders invited on or after 31 December 2021.
Updated Policy (February 2025)
In February 2025, the Development Bureau updated DEVB TC(W) No. 6/2021 to reflect the enactment of the Construction Industry Security of Payment Ordinance (Cap. 652) (“the Ordinance”).
Key Points:
- Construction Industry Security of Payment Ordinance (Cap. 652)
- Gazetted on 27 December 2024.
- Will come into full operation on 28 August 2025.
- Applies to public works contracts with a Letter of Acceptance issued on or after 28 August 2025 and with a contract value not less than HK$5 million (as specified in Schedule 4 of the Ordinance).
- Transitional Arrangements
- Public works contracts with Letter of Acceptance issued before 28 August 2025 will continue to adopt SOP Provisions under DEVB TC(W) No. 6/2021.
- Special arrangements apply for tenders potentially awarded before or after 28 August 2025. Depending on the award date, contracts will either:
- Continue under SOP Provisions; or
- Be amended via supplementary agreements; or
- Adopt the standard provisions under the Ordinance.
HKIE’s Role as an Adjudicator Nominating Body (ANB)
The Hong Kong Institution of Engineers (“HKIE”) has been:
- Registered as an ANB for the implementation of SOP Provisions in public works contracts (valid from 1 January 2022 to 31 December 2024, and recently extended to 31 December 2027).
- Admitted to the Register of Adjudicator Nominating Bodies under the Ordinance, effective from 28 August 2025.
As an ANB, HKIE:
- Carries out duties of ANB under Construction Industry Security of Payment Ordinance (Cap. 652).
- Establishes and maintains a new Panel of Adjudicators (comprised of Adjudicators and Senior Adjudicators) for both adjudication under Construction Industry Security of Payment Ordinance (Cap. 652) and SOP Provisions in public works contracts.
- The previous HKIE Panel of Adjudicators maintained solely for the Security of Payment Provisions in public works contracts will cease to exist upon the establishment of the new panel under the Security of Payment Ordinance (Cap. 652).
Validity of Registration
- Initial ANB registration under the Ordinance is for three (3) years.
More Information
- DEVB TC(W) No. 6/2021 (Updated February 2025) – https://hkie.org.hk/cdrc/wp-content/uploads/sites/44/hkie/48c31e5b6538c97ea57c16e2e96c1c53/C-2021-06-02.pdf
- DEVB – Application for Admission to the Register of Adjudicator Nominating Bodies under the Construction Industry Security of Payment Ordinance (Cap. 652)
https://www.devb.gov.hk/en/construction_sector_matters/adjudicator-nominating-bodies/under-ordinance-cap-652/application/index.html - Construction Industry Security of Payment Ordinance (Cap. 652) – https://www.elegislation.gov.hk/hk/cap652
HKIE Adjudication Trainings
- HKIE Adjudication Training Course 2025 – View here
Adjudication Rules, Code of Conduct, Practice Notes
- HKIE Adjudication Rules 2025 (HKIE ANB Fee Schedule, Form A – Notice of Adjudication and Form B – Potential Adjudicator’s Declaration of Acceptance are enclosed) – Download here
- HKIE Code of Conduct for Adjudicators – Download here
- HKIE practice note on jurisdiction of adjudicators – Download here
- HKIE practice note on case management– Download here
- HKIE practice note on writing of determination– Download here
- HKIE practice note on adjudicator’s fees, expenses and costs of proceedings– Download here
Procedure
- Procedure for Selecting HKIE as the ANB – View here
- Procedure for Nomination and Appointment – View here
FORMS for Download
- HKIE Form 1 – Request for Appointment of an Adjudicator– Download here
- HKIE Form 2 – Check on Parties’ Concerns on Conflicts of Interest and Order of Preference – Potential Adjudicators – Download here
HKIE Notice Templates
- HKIE Template 1 – Notice of Intention to Nominate as a Potential Adjudicator – View here
- HKIE Template 2 – Notice of Appointment of Adjudicator – View here
HKIE’s Directive
- HKIE – Page Limitation and Format Requirements for Adjudication Submissions– View here
- HKIE – Per Diem Allowance for Adjudicators – View here
Disciplinary Regulations
- HKIE Disciplinary Regulations for Adjudicators – Download here
