“If contractors are the backbone of development, why are they still waiting in the ‘clinic’ for payments that should have been cured years ago?”
EDITORIAL PREFACE
Brunei’s development story is built on the commitment of many — policymakers, planners, contractors, and the thousands of workers who raise the nation’s infrastructure from blueprint to reality. Yet behind this progress lies a recurring challenge that affects the very people entrusted to build our future. This report shines a respectful but firm light on the long-standing delays in contractor payments, not to assign blame, but to support the national conversation on governance, accountability, and timely service delivery. In strengthening these systems, we strengthen the nation.
Brunei’s development story is built on the commitment of many — policymakers, planners, contractors, and the thousands of workers who raise the nation’s infrastructure from blueprint to reality. Yet behind this progress lies a recurring challenge that affects the very people entrusted to build our future. This report shines a respectful but firm light on the long-standing delays in contractor payments, not to assign blame, but to support the national conversation on governance, accountability, and timely service delivery. In strengthening these systems, we strengthen the nation.
By Malai Hassan Othman | KopiTalk with MHO
Every clinic exists because something's off. And in Brunei’s ongoing late-payment saga, the patient isn’t the contractor or the small business owner standing at the counter with a stack of documents. The patient is the payment system itself — a system that’s been limping along for years, needing a major overhaul instead of just quick fixes.
The so-called Vendors Clinic was set up to help vendors deal with payment delays. But its very existence shows just how big the problem is. If the internal processes were running smoothly, if approvals were timely, and if budgets were aligned, vendors wouldn’t need a clinic just to chase down payments for work they’ve already done.
This isn’t just casual coffee-shop chatter among contractors anymore. The issue of delayed government payments has come up repeatedly in the Legislative Council (LegCo) — the country’s top national forum — where members have warned that these delays are putting local businesses, especially micro, small, and medium enterprises (MSMEs), at serious financial risk.
Across the construction, maintenance, supply, and service sectors, vendors are getting louder. Letters to editors, public comments, and stories shared by contractors show a pattern that’s more than just annoying — it’s chronic, systemic, and financially painful.
DELAYS THAT OUTLIVE THE PROJECT
Contractors are seeing a familiar pattern: projects wrapped up, defects fixed, documents submitted — yet payments are stuck in a maze of approvals. Many mention delays that drag on even after the Defects Liability Period (DLP), the standard 12-month warranty period, where contractors must fix defects at their own cost. Once the DLP wraps up, the project should be financially closed.
But contractors say they’re waiting through the entire DLP, sometimes much longer, only to hear that their final variation order (VO) is still “in process” or “awaiting approval.” These delays tie up funds that companies need to repay loans, pay staff, and gear up for new projects.
One vendor publicly shared that even after all fixes were done and the DLP had expired, the final VO kept “returning for re-review or queueing for signatures,” preventing the closure of accounts that are already years old.
These aren’t minor hold-ups; they’re disruptions that affect business decisions, cash flow planning, and the survival of many SMEs.
LegCo members have pointed out that such payment delays threaten the stability of the construction sector, creating cash flow issues that can force small businesses to hold off on payments to their own suppliers or, in the worst case, face potential bankruptcy.
WHEN BUDGETS RUN OUT BUT WORK MUST CONTINUE
Another frustrating trend is budget exhaustion. Vendors often find out — only after months of waiting — that the relevant department’s annual funds have run out. Yet they were earlier told to go ahead with the work. The outcome? A full year’s claim gets pushed into another budget cycle.
As one contractor put it: “If the budget wasn’t secured, why issue the PO? We delivered the service because the government told us to proceed — but when we invoice, the budget is finished.”
This practice forces contractors to bear the financial weight of public projects. Subcontractors, labourers, and suppliers — all of whom rely on prompt payments — feel the same financial strain.
Over the years, LegCo has urged ministries and departments to stick to the Client’s Charter and process applications and payments without unnecessary delays, recognising that failing to do so shakes confidence in government contracting.
NEW SYSTEM, OLD HABITS
TAFIS 2.0 was rolled out to modernise financial processes, but has instead added new layers of rigidity. Vendors talk about a system where small mistakes can lead to full rejections, submissions can’t be changed, and each department has its own take on screening procedures.
Tech issues have played a part, too. LegCo discussions have pointed out that bugs and implementation problems in TAFIS 2.0 have caused payment processing delays across departments, leading to calls for more thorough testing of major IT upgrades before they launch.
The platform is digital, but the habits behind it are still manual: multiple signatures, paper trails, slow internal routing, and documents left waiting on desks. Technology alone can’t fix workflow cultures built around delays, verbal instructions, and fragmented responsibility.
As one vendor remarked, “The system might be new, but we’re still working like it’s the 1980s.”
THE SES BOTTLENECK
A major chokepoint is the Service Entry Sheet (SES) — the government’s official confirmation that a service has been delivered and accepted. It’s the internal “OK” that lets the system match the contractor’s invoice with the completed work. Without an approved SES, no payment can start.
Contractors report SES approvals taking weeks or even months. Some SES forms get stuck because a signatory is on leave; others need multiple internal clarifications; in some departments, even small errors mean starting all over again.
In TAFIS 2.0, a rejected SES often means going back to the start of the line.
The SES is supposed to be a confirmation step. Instead, it’s turned into one of the main barriers to timely payment.
The SES is supposed to be a confirmation step. Instead, it’s turned into one of the main barriers to timely payment.
THE HUMAN BOTTLENECK
Beyond tech, there's the human side: heavy workloads, limited staff, and unclear responsibilities. Files sit on desks. Approvals wait for the right person. Some vendors, after weeks of silence, are simply told to “wait.”
This isn’t a jab at individual officers — many are doing their best within a system that doesn’t give them clear timelines or consistent processes.
A big structural gap is the lack of Service Level Agreements (SLAs) — defined timelines that govern how long approvals or verifications should take. An SLA is basically an official deadline. Without it, delays go untracked, no one feels responsible for moving a document in a specific time, and vendors are left waiting indefinitely.
No SLA means no accountability.
And without accountability, delays keep happening as a matter of routine.
LegCo members have pointed out that these issues come up year after year, yet aren’t tackled decisively, urging the council to focus on “pressing issues” like payment delays and ensure greater accountability and financial discipline in managing public funds.
THE RIPPLE EFFECT ON TRUST AND CONFIDENCE
Late payments don’t just inconvenience vendors; they chip away at confidence across the whole economy. SMEs warn each other to steer clear of certain projects.
Foreign suppliers start questioning the reliability of local partners. Subcontractors hesitate to take on work they might not get paid for on time.
Contractors are increasingly asking:
“How can the nation build confidence in its private sector when payments for completed work aren’t predictable?”
This tension doesn’t sit well with the goals of Wawasan 2035, which calls for a dynamic, modern private sector and efficient public service delivery. A development agenda can’t thrive if the companies executing it are financially stretched by delayed payments.
WHAT THE AUTHORITIES HAVE SAID – INSIDE AND OUTSIDE LEGCO
Inside the Legislative Council, government officials — including the Minister at the Prime Minister’s Office and Second Minister of Finance and Economy — have admitted that late payments to contractors are a real problem and that steps to fix it are “in progress and ongoing.”
This acknowledgement goes back at least to 2017, and yet the same concerns keep popping up nearly a decade later.
Outside LegCo, the Ministry of Finance and Economy’s public response in December 2024 again recognised the concerns and pointed to available support channels:
- payment and user clinics,
- the Treasury’s Customer Care Centre,
- and the TAFIS 2.0 Helpdesk.
These services are helpful but remain reactive measures. They help vendors navigate delays; they don’t tackle the root causes that create those delays.
The Vendor Clinic, introduced in 2016, is still the main fix. But clinics, by nature, only address symptoms — not the underlying structural issue.
The Vendor Clinic, introduced in 2016, is still the main fix. But clinics, by nature, only address symptoms — not the underlying structural issue.
A YEARLY CYCLE THAT SHOULD NOT BE NORMAL
Many contractors have come to accept a yearly cycle: unpaid claims carried into the next fiscal year, new projects kicked off while old obligations linger, and another round of vendors heading back to the clinic.
This isn’t sustainable.
It represents what several vendors call “institutional fatigue” — a slow erosion of trust between the government and the very businesses working on national development projects.
At the same time, LegCo continues to hear calls for stronger accountability, closer monitoring of payment performance, and fair treatment of contractors who have held up their end of the deal.
A PATH TOWARD RESTORATION
Contractors and SMEs aren’t asking for handouts.
They’re asking for predictability and fairness.
Their expectations are simple:
- clear and enforceable payment timelines,
- accountability for delayed approvals,
- transparent budget allocation and use,
- timely VO and SES processing,
- an accessible end-to-end tracking system,
- and a shift from reactive clinics to proactive governance.
These aren’t radical asks; they’re the bare minimum for a healthy payment system, and they fit well within the broader governance and fiscal reforms the government often talks about in LegCo.
CONCLUSION – A HOPEFUL TURN FORWARD
Brunei is at a crucial crossroads.
If the country wants to bolster its private sector, support MSMEs, and fulfil the promise of Wawasan 2035, it must tackle the root causes of delayed payments — not just treat the symptoms.
The fact that LegCo keeps bringing this up shows that the issue is recognised at the highest level. The next step is turning that recognition into actual reform: firm SLAs, better-tested systems, clearer workflows, and a culture where timely payment for completed work is the norm, not the exception.
With clear timelines, stronger accountability, and the political will to fix what's broken, Brunei can rebuild trust between the government and the business community.
A healthier payment system is within reach.
It starts with acknowledging that the system itself is the patient — and with the right reforms, it can recover, rebuild, and ultimately support the nation’s goals for a more resilient, confident, and prosperous future. (MHO/11/2025)
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