We are contracted on an Option A build to print contract. We have been issued the design to manufacture which is full of errors. We have been raising the errors as the manufacture is being completed but when we have come to final assemble, the parts wont go together due to decisions made through the design. All parts are as per drawings and have been inspected and are correct. We have raised the CE but have been told there will be no movement of the Completion date as we did not raise the issue early enough. We raised the EWN as soon as we knew they didnât fit. The Employer has stated we have a responsibility to ensure the design would work as the manufacture was progressing, our argument is we arenât the detailed designers and we raised the issue as soon as we were aware and the design issues are an employers risk. Opinions?
I suggest you check the Works Information/Scope to check on your design obligations under the contract (if any) and if there is an expressed requirement for you to check the design and assemble as manufacture progressed. If there is no such expressed obligation then the matter is a CE. The assessment of the CE will come down to you demonstrating that you raised the early warnings as soon as you became aware of the potential issue. Have you raised a CE for a redesign being required
You state âThe Employer has stated we have a responsibility to ensure the design would work as the manufacture was progressing.â Unless there is a specific statement either in the Z clauses or Works Information (NEC3) / Scope (NEC4) this is a subjective statement. Even if it is in the Z clauses or WI/Scope, I am not sure how strictly enforceable it is as it.
Assuming there isnât, then it comes down to when âan experienced contractor could have givenâ the early warning given its duties under the contract. As you were not allocated design duties, I think that you have a very good argument for saying âwhy on earth should we be expected to pick it up, when your designers havenâtâ. If you had an obligation to check the design, it becomes more subjective what elements you should or shouldnât have picked up.
One final point: what is the Employer doing communicating this? It should be the Project Manager and he or she has a duty to be impartial - see Costain v. Bechtel (2005)
Both - It does state in the Works Information that we have to check the design would be workable, but I agree its unclear how we do that, the drawings show it would go together but when the items are made and within the tolerances allowed they do not. The works information also states we are purely build to print to the issued drawings.
If it is the Clientâs design then they are liable for faults in this, at sub-clause 80.1. To my mind the fact that have you notified early warnings would be reasonable evidence to show that you have checked the design, as required by your Scope. It would then be for the Project Manager to instruct a ârevisedâ design, which would be a compensation event. This would not be subject to the âtime barâ provision under sub-clause 61.3.
Andrew wish people followed your logic. We are being told there is no delay as we should have spotted the error earlier.
I agree with Andrew, but you need to demonstrate you raised the early warning as soon as possible to get the assessment in your favour. Whilst it is for the PM to instruct a change in the Works Information for the new design I would suggest you raise the notification.
Dave, the EWNâs were raised when we found they didnât work but the opposing argument is we should have known they wouldnât fit before the manufacture started as competent contractors.
i do not see how they could sustain that argument, you are obviously entitled to assume that the clientâs design works. The fact that it does not is not your risk under the contract. I would raise the CE notification to progress the matter
It is always easy to apportion blame after the event, although it must be remembered that you are not the Designer nor have a Design Check responsibility. Although you have a requirement incorporated into your Scope to âcheck the design would be workableâ, it is not clear what this means as it is not a formally recognised process or procedure as defined by a standard, such as BS 5975.
It is not uncommon for a design to not work 100% as intended in practice and requiring some form of remedial works to achieve the performance specification. On paper it may work perfectly but âfettlingâ is often necessary, due to the nature of the design process and the fact that âprinciplesâ are applied to design which may not exactly reflect the actual physical environment.
Maybe obtain an independent opinion of what the requirement of âcheck the design would be workableâ actually means, in the context of your contractual obligations. Hopefully that would facilitate some form of mediation to resolve this matter.
Andrew, thanks for the advise.
At the start of this conversation you stated that the original design was full of errors. Did you raise an EWN, at the time that these errors was first discovered, advising the Employer that the correction of these errors could result in additional time and cost? If not, then presumably the Employer is relying on your implied suggestion that correction of these errors would not be a compensation event. It was only when the parts would not fit that you raised the EWN, effectively on the delay(s) that had already occurred, thereby defeating the intended purpose of an Early Warning Notice. The fact that the components did not fit after the changes to the design had been instructed is a problem for the Employer and it is his responsibility. You should be paid your contract price, together with any additional cost involved in the incorporating the changes. However, in my mind you are not entitled to time. I would welcome the Panelâs opinion on my synopsis.
Les, the matter is a compensation event if the Works Information has been changed as a consequence of the Clientâs design not being correct. The real matter is the assessment of the effect of the compensation event. This will depend upon the Project Managerâs view as to whether an experienced contractor would have given an early warning (clause 61.5 and 63.5). Early Warning(s) have been given. The PM may argue that the early warnings could/should have been given earlier but if they were raised as soon as the Contractor became aware then the assessment should cover both âtime and moneyâ
Dave, I understand what you are saying but from the opening query by Waterside Surveyor it appears that the EWN was only raised when it became apparent that the components would not fit after the design modifications to the original errors. I would suggest that the EWNs should have been raised as soon as the original errors became apparent and when the design changes were issued.
Les to clarify the components didnât fit which is when we raised the EWN, the design was then changed but we are being told we should have spotted that the original design was not going to work therefore we are allowed no extension of time.