NEC ECC: Correction of Defects and Design Limitations

NEC3 and NEC4 Contracts Testing and Defects
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A new build school with the contract let under NEC3 ECC Option A, with the C responsible for the whole of the design and developing it in accordance with the E’s WI provided. Worth mentioning that the C’s liability for design is limited to reasonable skill and care.

The project has been certified as complete and taken over by the E and is now being occupied by the Trust. A potential Defect is being debated concerning the absence of cable management to the fitted furniture e.g. workstations, which the C is responsible for designing and building. The Trust have raised concerns with the lack of cable management to the workstations, with children’s feet becoming tangled in trailing cables.

Given the D&B arrangement, the E’s WI is limited to a strategic project brief, floor plans, performance specifications, etc. The C’s WI is also somewhat limited but embellishes the E’s WI with initial loaded floor plans, isometrics, prescriptive specifications, etc. but naturally there was design development expected and an allowance made in the Total of the Prices.

The C is refuting any potential Defect, arguing that they have provided the works in accordance with the WI. Upon inspection of the WI (E’s + C’s) there is no explicit reference to cable management (which is not to say they are not essential), although it is evident that the small power and data runs beneath the workstations with cable ports provided to direct cables beneath, so potentially a hazard has been designed in. So, in part, they are correct but there could be a suggesting that the omission does not automatically mean the management system is not required. As a competent designer, they ought to have considered what the rooms were used for and developed the design to suit these requirements. These requirements have never altered. To seek clarity, we have requested their designer’s risk assessment to demonstrate that they considered whether cable management was needed, and any hazards presented during the development of the design. At present they are not able and are seemly unable to provide this risk assessment.

Firstly, if the C does not provide the substantiating risk assessment, if it reasonable for the S to conclude that there is a Defect within the design and that despite an explicit reference to cable management in the WI, it would be reasonable to expect it to have been introduced with ‘through’ design development?

Secondly, if the risk assessment is provided and substantiates its exclusion, that’s dispute ended.

Thirdly, if the risk assessment is provided and cable management is required, who pays for this? My understanding of the contract that this would be C’s risk under cl. 60.1(1), although he suggests that its not development its enhancement and is therefore a CE. If it were a Option C contract, I would agree as the direct cost to correct a Defect may be recoverable, but we are operating Option A.

Thanks in advance.

P.S. The S is of the opinion that cable management is requires, has notified a Defect which has not been corrected in the correction period and is about to engage Others to complete.

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*‘thorough’ design development…

P.P.S. The WI does contain subtle suggestions that cable management is required to peninsular desks to a library but does not address all the other rooms and the M&E spec states that generally desk cable management is to be by the furniture contractor.

If a design is considered defective on grounds it may not satisfy statutory regulations e.g. CDM, Workplace Regs, etc. by not designing out hazards that could have been foreseen, then would this negate the corrections being claimed a CE - under Option A with the C responsible for the design.

There is potential that the trailing cables are a CDM or Workplace Regs. issue.

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The Contractor has to design and construct the works in accordance with the Works Information and the Law. In carrying out the design, the Contractor is obliged to apply his reasonable skill and care. Unless the requirement for cable management is expressly stated in the WI (and it seems it isn’t) or expressly required by the Law (and it seems it isn’t (unless there is a requirement in the Workplace Regulations) then you need to consider whether the C has used reasonable skill and care.

The test for that would be whether a typical contractor would have allowed for cable management. To ascertain that you could look at any guidelines, recommendation etc that may be relevant. A risk assessment from the C is a good starting point as the C should have addressed the hazard whether by design or otherwise.

If it is determined that the C should have installed cable management then it is a Defect and it needs to be corrected. There is no need for a compensation event to arise as nothing is changing.

If the defects correction period has expired, and it looks like it has, then the E can engage others to carry out the work and the C pays the amount of the cost as assessed by the PM. This can be deducted from any amount otherwise due to the C.

However, if the C later demonstrates that he did not have to include for it, then the E would have to repay that amount.

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Thanks for the reply. We are both in agreement that the WI does not explicitly capture the requirements. The applicable laws aren’t explicit and are open to interpretation. Hence the reliance on the need to see the risk assessment.

So far, the C is unable and unwilling to provide the risk assessment. His excuse is…The specialist provider who undertook the design went into insolvency prior to manufacturing. Whilst they have set up as a new firm, the subcontract was terminated and the C engaged others to undertake the manufacturing and installation.

That said, the original design was never warrantied due to the timing of the insolvency and the C has failed to appoint the new S/C for checking and taking on the design done by others which would have been prudent. I see this to the E’s detriment due to the C’s lack of due diligence and QMA. The C is now suggesting the design is the risk assessment. Would you agree this is wrong? The design should be as a result of the risk assessment.

Having discussed the matter with the CDM advisor, our in-house designers and the specialist company that has since reformed, its our belief that a typical contractor would deem the cable management as a requirement. The specialist company has advised that this requirement would have been picked up as part of the design development had their appointment continued.

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Do we agree on the follow? If the PM and S determines that reasonable skill and care has not been exercised and the cable management is required (as required under CD1) then irrespective of whether the WI makes reference or not, a defect is present and the C needs to correct the defects and there would be no CE? As it would fall under cl 61.1(1)?

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Firstly, whether the original designer in insolvent or not is irrelevant to the contractor’s liability.
Secondly, you’re correct that the risk assessment should inform the design, not the other way around.
Did the C submit his design under clause 21.2?

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If the PM and S determines that reasonable skill and care has not been exercised then it is a defect and there is no CE. However, this is subject to challenge by the C, who could take it to adjudication.

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The C did submit his design of this package along with a statement of compliance that the design was in accordance with the WI and laws. The lack of a cable management system was not picked up by either party as no sections were provided at that time. They were subsequently provided at a later date.