Design Submissions: Don’t get this wrong!
30/09/24
Newsletter #26:
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If you have a contract with an element of design (as defined in the Scope) which requires submission to the Project Manager for acceptance, then the Contractor will need to submit the parts of the design for acceptance under clause 21.2!
This obligation has significant and under-estimated impacts on a project if undertook incorrectly!
Why?
Let’s explain…
Clause 21.1 requires the Contractor to design the parts of the works which the Scope states.
Clause 21.2 requires the particulars to be submitted to the Project Manager for acceptance if the Scope asks for it.
The problem is, even if the design is accepted, the Contractor remains liable for the design and adherence to the Scope. Clause 14.1 makes it clear that acceptance “does not change the Contractor’s responsibility to Provide the Works or liability for its design”.
I.e. If the Contractor got the design wrong, even if it was accepted by the Project Manager, the Contractor is still liable for all of the impacts that follow!
Take an example:
Scope requires the Contractor to design a retaining wall which will hold up a new road. All of the standards are included in the Scope and it also requires any steelwork to be stainless steel!
Contractor takes the Scope and designs the retaining wall, submitting the particulars for acceptance under clause 21.2.
The problem is, the design includes for mild steel elements not stainless steel.
The design is accepted, the use of mild steel wasn’t identified when the design was checked!
Contractor builds the retaining wall and is almost done when the Supervisor notices that the Scope requires stainless steel and the Contractor is using mild steel!
A long search begins to find out where this has come from, and its spotted as being from the Contractors design submission which was accepted.
What is the problem?
The Contractor is always liable for this issue, as clause 14.1 states. The design submission and acceptance procedure is there to ensure visibility of the design so the Client and Project Manager can see works are progressing and are inline with expectations.
The problem is, the Contractor now has a Defect (the retaining wall is not in accordance with the Scope!). They must rectify this by either designing it again and rebuilding it, or requesting that the Client accepts a different end product.
The impact on programme (delay damages, Key Dates, Completion etc) as well as the impact on cost (re-design and re-build!) is squarely for them to resolve. Yes there might be some shared ownership if its an Option C or D contract, but fundamentally, the Contractor is the one who has to fix it!
What can be done?
The real issue here is that during the design submission and acceptance procedure, there wasn’t enough due diligence done. There should be a thorough check of the design against the Scope to ensure it meets the requirements. A technical design partner should sit alongside the Client and Project Manager to provide this service.
NEC is about collaboration, and that means checking what the Contractor has done and making sure it meets the Scope so that everyone can deliver the project efficiently. Any errors should be picked up early and resolve before it costs the project dearly!
In summary why shouldn’t you get this wrong!? Because worst case it will cost a lot of money, take a lot of time, and cause issues for everyone involved to rectify.
Work together and get the design submission and acceptance procedure and critique right!
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To understand more about how to prepare and manage an NEC contract, the following guidance documents are available.
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