We are PM on an NEC3 ECC Option A which is mostly designed by the Contractor. A design has been submitted by the Contractor and accepted by the PM and it has transpired that this design is not compliant with the Works Information. We understand the following;
c11.2(5) A Defect is a part of the works which is not in accordance with the Works Information - therefore this is a defect.
c14.1 PM’s acceptance does not change the Contractors responsibility to Provide the Works or his liability for his design.
c60.1(1) a change made in order to accept a defect is not a compensation event - if we choose to accept.
C60.1(8) The PM changes a decision which he has previously communicated to the contractor.
My question is, if we notify a defect, do we need to change our previous decision (acceptance of the design) and notify a compensation event, even though the contractor is still liable for his design?
Or do we simply instruct the contractor to resubmit his design again for acceptance and no compensation event applies?
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The Contractor’s primary obligation at clause 20.1 is to Provide the Works in accordance with the Works Information. This is what they have failed to do. The definition of the term Defect identifies three possible reasons for a Defect (1) not in accordance with Works Information, (2) not in accordance with applicable law and (3) not in accordance with the Contractor’s design which the PM has accepted.
As you say reason (1) applies so the Supervisor should notify the Defect, you don’t need to do anything else. Clauses 14.1 and 60.1(1) when read together mean that the Employer’s Works Information has priority over the Contractor’s design.
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Thanks for the reply Neil, I am curious as to how we should restart the design submission process, after all, the contractors design should be revised and resubmitted per cl. 21.2, do we instruct this?
I would also be keen to hear your view on the following communication I expect from the Contractor
‘You have changed a decision so that is a ce 60.1(8) and I have nugatory costs and delay which are attributable to that event.’
Thanks
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The first bullet point of Clause 61.4 means that the event is not a CE because it arises from a fault of the Contractor, in that the Contractor did not comply with the Works Information when submitting its design.
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The Contractor would only have an obligation to submit design under clause 21.2 if the Works Information requires any / all design information to be submitted for acceptance. If the Works Information is silent on the matter then no obligation to submit exists.
If an obligation does exist then clause 21.2 requires submission and makes it clear that the Contractor cannot proceed until the design has been submitted. You raise the issue with the Contractor as an early warning notification (impair the performance of the works in use) and discuss / agree mitigation. There is no power in the contract for the PM to instruct the submission of design information.
I don’t see how the Contractor can claim a CE for this as the fact that their design does not comply with the Works Information is their fault.
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