The Contractor is responsible for design on this particular project. Defects in welding have been raised by the Client and defects in poor choice of material have also been raised for their installation of some electrical equipment. The Contractor is citing X15 as a reason to dismiss these defect notices as true defects and the fact that the Client should not attempt to disallow the cost of re-work/defect correction. Furthermore he claims there is no specific constraint on him in the WI to show how he is to provide the Works therefore he also discounts the intended use by the Client to impose clause 11.2(25) on him. Surely the WI relative to design is a constraint in its own right. What about fit for purpose being an implied constraint since that is enshrined in law? I know I cannot copy the entire WI to you however there is a set of “Supplementary Conditions” which, under Inspection, states “If at any time before the Works are certified complete by the PM…decide that any work or materials used…are defective…then the Contractor shall at his own expense…make good the defects…”
Can the Client reasonably disallow the corrective work?
A very similar question was posted recently which we answered - and (unfortunately) I can only repeat the same answer here to the same question that has been posted a slightly different way. In an un-amended contract you can only disallow a cost for a specific reason within the definition of Disallowed Costs". I can fully understand an Employer saying “why should I pay for correcting a defect when it is their fault” but remember under option C this is a shared risk. You also share the good things - where you benefit from good work and savings that the Contractor made. If the contract intended for all such things to be disallowed then they would have written simply “the cost of correcting defects” and left of the following bit"after Completion".
I understand your frustration, but this is a shared risk contract which includes such items, but equally don’t forget under option C the Contractor is losing out on “gain share” or increasing “pain share” so it is NEVER in a Contractors interest to do defects. You (arguably) had a cheaper tender price as well remember as they knew this was a shared risk. You also pay for the Contractor correcting defects under option A - you just don’t know it as they will have included an allowance within their fixed price lump sum.
If your Z clauses you believe change these rules then you need to assess and interpret these under their own basis - I cant comment fully without seeing those but from what you describe they MAY change the rules as stated above.
As the design is the Contractor’s responsibility then he should cover himself with PI Insurance. And if the contract requires the Contractor to procure a PII and If the defects resulted from faulty design, then it is an insurable event which is to be deducted from the Defined Cost.