A contractor is engaged under NEC4 Option A and they are designing and building a facility. As part of this they are constructing internal walls. Upon review of the wall construction to date on site, it was noted that they have not installed part of the internal lining as they deem it as not required. When challenged on whether it should be a cost saving to the Client and should this then be an official instruction from the PM to change the Scope they state as it is their design, it is design development and within the gift to do so, keeping any benefit of savings themselves.
Is the contractor correct in what they state? From the Client point of view, they are expecting the internal lining to be included and should for example an additional lining be required, the contractor would expect additional monies, time etc. Why would the Client pay for something that will never be completed? They also are not complying with the scope to include the lining? Any pointers apprecaited
firstly the Contractor has to Provide the Works strictly in accordance with the Scope, if the Client’s was clear that the walls should have an internal lining then the Contractor should have designed it and constructed it. Failure to provide something which is required by the Scope is a Defect under 11.2(6) 1st bullet point.
If the Client wants the internal lining and if it was always a requirement, the Supervisor should notify a Defect under clause 43.2.
The Contractor is required to correct all Defects under clause 44.1 whether the Defect has been notified by the Supervisor or not.
If the Contractor refers to their design which must have been accepted by the PM in accordance with clause 21.2, you can point to clause 14.1 which states that acceptance by the PM of their design does not change their responsibility under the contract to meet the Scope.
Once a Contractor’s design has been accepted they are obliged to provide it, otherwise if they do not then it too is a Defect under clause 11.2(6) 2nd bullet point.
Steve, thanks for your response and sorry for the later reply.
I guess my further question is then, if we have accepted the design showing this reduction in the wall lining and the contractor has proceeded, does the contractor pocket the value, even though it is not the build up of the wall that was originally contracted upon, and that the client is paying for?
@NP01 - I think we need to go back to the start. Is this internal liner required by the Scope?
If it is required, then the Contractor has to provide it. Notify the Defect, per Steve’s answer.
If it is not required by Scope, there is no problem. The Contractor has complied with the Scope, and the saving they made is theirs. If you want the liner anyway, that’s a change to the Scope and a compensation event.
In the most recent post you seem to suggest that the design has been accepted. Perhaps surprisingly, that would change nothing. As Steve pointed out, clause 14.1 applies. If the design doesn’t meet the Scope, Supervisor notifies the Defect. Contractor has to fix it.