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NEC ECC: PM instructing design work on a contract with no Contractor design

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We are a Contractor on an NEC3 option C. The Project Manager has removed all reference to design from the works information and anywhere design is mentioned such as the contract data he has put N/A against it.
The Project Manager has now started issuing instructions for us to carry out design work. His logic is that we designed the project under a separate agreement several years ago so we should be both capable of doing design change. We are worried he will disallow any cost for design work we carry out as the contract has omitted all reference to Contractor's design. In our opinion it is a build to print project and the Employer is responsible for all design.
asked Mar 19 in Compensation Events by Cowboygeorge (230 points)  

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Check how the identified term "works" (in italics) is defined in Contract Data part one, does it say "the construction of ... " or "the design and construction of ..."? This is important as clause 20.1 obliges you to Provide the Works in accordance with the Works Information, clause 11.2(13) defines the term "Provide the Works" as "to do the work necessary to complete the works", and clause 11.2(19) defines the term "Works Information" as "...specifies and describes the works ..."  Again note the term "works" is in italics in both terms.

You state that there are no references to design in the Works Information and hence no obligation for you to design the "works" (in italics) and the PM is instructing you to carry out design.

Clause 27.3 obliges you to obey instructions given in accordance with the contract, however in your case you don't need to. When you read the clause 20.1 obligation alongside the defined terms "Provide the Works" and "Works Information" you can see how if the identified term "works" (in italics) makes no reference to design, then design is not necessary in order to complete the "works" and then falls outside the definition of the terms "Provide the Works" and "Works Information". The PM does not have the unilateral right to be able to change the meaning of the term "works" either.

Over and above this, if the contract did not anticipate you doing design work then it won't include an obligation for you to provide professional indemnity insurance, this means that if you do undertake any design work you will not be covered by your insurance. Further the contract would not include X15 limitation of liability for design to reasonable skill and care which means you would be carrying a fitness for purpose obligation for any design work you did.

If the design needs to change then the PM should issue revised drawings. If you did the design in the first place under a separate contract, you should receive an instruction under that contact to provide revised drawings. Once completed these drawings should be issued to the Employer, who then gives them to the PM to issue to you under your construction contract. Bit long winded but it's the correct contractual way forward to protect both parties. The Employer should have thought about all this a few years ago when they decided the procurement route.
answered Mar 19 by Neil Earnshaw Panel Member (28,820 points)  
selected Mar 19 by Neil Earnshaw
0 votes
I have had this before! First of all and probably most important of all, what are the 'works' in the Contract Data referenced as? If it just says The works are 'the construction of new facility X' with no mention of the design, you can quite justifiably and legally say you entered into a contract 'for construction' only. Consequently, an instruction given for the Contractor to do design "is not in accordance with this contract" (clause 27.3 of NEC3 and NEC4).

That is enough in itself, but would be reinforced by nothing in the original Works Information and the absence of other relevant provisions in the conditions of contract e.g. X15, no PI insurance requirements etc.. Consequently if the EMPLOYER wants you do this - because the PM does not have the power to instruct - then a supplementary agreement needs to be struck, whereby they add i the design and you get added in the relevant provisions.

Having said this, any design in the original WI, you would be contractually obliged to do.
answered Mar 19 by Jon Broome Panel Member (62,520 points)