NEC ECC: Consequences of Contractor design errors

Question

The Contractor has discovered a design error in so far as some hand railing he has manufactured will not fit into an enclosed hoist which is fixed to the outside of an existing building thereby rendering him incapable of lifting the rails into position. The Works Information (WI) did state that a hoist had already been installed for his use however this is a fundamental error in his design study and could be used to show he hadn't considered the WI but on the face of it seems a retrospective argument to apportion blame. Therefore:

1) Is this a defect under the defined terms of the Contract?

2) This is an Option C so is it arguable that rectification could consequentially be a disallowed cost however there is no specific "constraint" in the WI about this allowing the Employer to impose clause 11.2(25) conditions?

Answer 1

From what you have said, it seems that the hoist was made available to the Contractor for access purposes.  The fact that the hand railing did not fit in the hoist does not make this a Defect under the contract, as defined under clause 11.2 (5), assuming your contract is unamended from the standard text, unless there was a stated requirement in the Works Information for the hand railing to be specifically manufactured so that it could fit into the hoist, to allow access.

This situation presumably makes access more difficult and, consequently, more expensive too.  It seems that you have answered your own question about Disallowed Cost as well, so the outcome is that any additional cost incurred would become part of the Price for Work Done to Date and subject to an assessment of the Contractor's share under clause 53.

Comments

The thing is that whilst there was no stated requirement for the rails to fit into the hoist in the WI, the only way the Contractor could get these rails up the building was by the use of the hoist; no other means of access to the top of the building is/was possible and the contractor knew this at tender stage. You could argue no "constraint" was required to be stated in the WI or indeed a constraint existed naturally, as it was obvious there was only ONE way the rails were going up to the top of the existing building. In my mind this is a fundamental flaw in his design and planning and rectification, whilst it could be apportioned to the pain/gain mechanism via the PWDD, should be really be disallowed.

I'd appreciate your views.

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The process of deciding what is a Disallowed Cost should be a clinical procedure and not take into account any 'moral' or 'ought to' sceanarios.  If none of the Disallowed Cost bullet points apply in this situation then the costs, quite simply, are not disallowed, regardless of whether this produces a 'fair or unfair' outcome.

For this matter to be a Defect then it would have to, assuming an unamended form, not be in accordance with the Works Information.  If this does not apply then, consequently, there is no Defect.

Sometimes we feel aggrieved by poor planning and / or management but under a Main Option C, unless it constitutes a Disallowed Cost, this is a 'shared' financial risk.  Hopefully an early warning has been notified to facilitate discussions on how to resolve this issue.

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Yes an EWN was raised and a risk reduction meeting held which concluded with a resolution albeit at an unexpected additional cost to the Employer. I agree with your views and appreciate your comments regarding "moral" or "emotive" issues etc. and that the Contract needs to be applied as written. Closer attention to detail within the WI is required to deal with circumstances like this should an Employer feel it is an important issue. Regards,