Key elements of an NDA and impact on a project and when liaising with consultants / contractors
Key elements of the NDA:
- Description of the confidential information
- Requirements and obligations on the parties
- Exclusions
- Term
- Consequences of breach
Impact:
- Need to undertake due diligence before sharing documents
- Duty to monitor consultants / contractors to make sure they are fulfilling obligations (as agent of employer)
- Duty to notify the employer of any breaches
- Delay in information release
Who was responsible for checking that the contractor had completed a survey, and how did they justify it not being carried out?
- EA has a responsibility on behalf of the employer to monitor the works.
- The survey should have been requested at the time, or reviewed at handover as part of the O&M file.
- It was the contractor’s overall responsibility to ensure the survey was completed as they held overall design responsibility under D&B.
- The justification given was that they monitored the manhole and determined that it was redundant. The assumption was that they wanted to save money by omitting the survey.
Who prepared the PCI? Why was it assumed to be abandoned?
- PCI was co-ordinated by the Ridge PD, and the drawing in question was developed by a Ridge Civil Engineer.
- It was assumed to be abandoned due to information provided by the employer. It wasn’t possible to survey the drain pre-contract due to an obstruction.
How were you influenced by the Client’s perspective of the situation and their relationship with Contractor A?
As EA I had a duty to represent the client’s best interests, which included advising them of the contractual position regarding their stance towards Contractor A.
I was influenced by the client’s perspective because:
- the decision had financial implications for the client
- the client’s relationship with Contractor A had broken down
- the client had genuine concerns around the quality and performance of Contractor A’s work
Why was the amount of cost recoverable from Contractor A limited, given their acceptance of the error, and the impact on the work in progress by Contractor B?
1) The contractor’s liability is limited to the cost of repair and not any further economic costs.
2) If an employer elects not to allow the contractor back to rectify its own defects then the contractor’s liability for costs can be lessened, regardless of who caused the defect.
3) As an EA I sought to maximise the client’s interests. Therefore, the application to Contractor A was for the full costs.
How did you reach your recommendation on defect rectification and how did this get shared and agreed with the Client?
1) I outlined the two options and my assessment of the merits and risks of each
2) I sought client approval of my recommended option
3) I then communicated with Contractor A, informing of the situation
4) I issued Contractor A with a formal letter instructing them not to rectify the defect, providing a breakdown of costs and informed that the costs would be deducted from remaining retention
What was the impact of instructing Contractor B to rectify the defect from an ongoing design liability perspective?
1) Contractor A would no longer be liable for any further issues relating to this defect
2) Contractor B would assume design liability under the Phase 3 contract
How is float treated in EoT claims?
1) EOT clause in the contract specified that the EOT would only be granted if the employer delay delays completion beyond the contract completion date
2) The contractor will only be granted an EOT if there is no remaining float in the programme. Hence, the contractor cannot preserve his float in the face of employer delays.
“Accelerating works at own cost” – would this ever be expected and what does the contract say in relation to this?
1) The contract says the contractor has a duty to ‘constantly use his best endeavours to prevent delay’ but this doesn’t amount to a positive duty on the contractor to accelerate progress.
2) The Contractor might accelerate at own cost to mitigate their own delay, so don’t become liable for liquidated damages.
How was the EOT confirmed?
I issued a formal letter to the contractor on behalf of the employer, outlining the following:
- Date of claim
- Clauses against which claim was made
- Claim awarded
- Reasons for award
- Original completion date
- Revised completion date
How did the contractor react to your assessment?
- I ensured that I substantiated the assessment with programme justification and evidence
- I reviewed the evidence with the contractor and he admitted they were in delay on a critical item and was able to use the delay period to get back onto programme
How did your award of time impact the QS’s assessment of the Relevant Matter?
The QS was able to negotiate the prolongation costs based on a reduced time settlement.
- The claim must only be the actual additional costs incurred by the contractor
- The QS needed to consider the elements of costs for which can be directly attributed to the employer’s delay event
Did you adjust your thinking on the contractual facts to suit the required outcome?
I don’t believe so, I used the contract conditions as a constraining factor in my assessment of the available options and my recommendations, whilst also maintaining the best interests of my client.
How did you anticipate managing and controlling the accelerated programme, and what measures were in place to ensure it was achieved?
1) I assessed the contractor’s accelerated programme to understand whether it was achievable
and whether the sequencing was optimal for the client.
2) Put in place new reporting mechanisms and progress reviews to ensure the acceleration targets were being met.
What was contained in the Acceleration agreement and how was this formalised?
- Agreement for the contractor’s extended working hours, and the conditions attached
- The revised completion date which was to revert to the original completion date
- It was formalised by issue of a formal notification from the employer
What could you have done better?
1) Earlier identification of the defect through review of the contract drawings (PCI)
2) Closer review of the contractor’s progress pre-delay
3) Sectional completion in Acceleration Agreement
4) Contract amendments?
- Programme to be a contractual document, to be submitted for approval at regular intervals, as per NEC
5) Consideration of other delay analysis techniques such as time slice analysis
What client-side costs would the client have incurred for the delay?
- Professional fees
- Insurance costs
- Loss of productivity (from not being able to use the works)
- Reputational damage
- Financial penalty
What is the contractor’s obligation when claiming for a delay?
Issue a delay notice whenever it is reasonably apparent that the works is being or likely to be delayed.
The notice should include:
- the cause(s) of delay
- the Relevant Event
- expected effects of the delay upon completion date substantiated with evidence such as programme
If an extension of time is issued during the project, what must happen after completion?
A review of the time awarded, within 12 weeks of completion - cannot reduce time, only confirm or increase it
How would the extension of time have been dealt with if under an NEC contract?
- Early warning notice instead of a delay notice
- Contractor or Project Manager could instruct the other to attend a ‘risk reduction’ meeting
- Claim for both time and cost would be issued by the contractor as a Compensation Event within 8 weeks
- Project Manager has one week to confirm decision
- Failure of the PM to reply within this period allows the contractor to confirm the failure, following which the PM has a further 2 weeks, otherwise the CE is confirmed by default
- The latest ‘accepted programme’ would be used as the baseline for assessing any delay events and their impact on the completion date
- Must be dealt with at the time - not after completion as it is possible with JCT.
Can you name some methods of delay analysis?
- Impacted As-Planned Analysis
- Time impact analysis
- Time slice window analysis
- As-Planned vs As-Built
- Collapsed As-Built Analysis
What is the disadvantage of As Planned vs As Built?
Optimism bias: original planned start dates and durations might be too optimistic and/or that the contractor used more resources than planned, causing the works to be carried out at a different speed to that envisaged
What were the concurrent delays caused by?
- The contractor was in delay on a critical activity of 1st fix M&E by a week
- The delay to this activity would have impacted the critical path if the employer delay hadn’t happened
- The employer’s delay event prevented power being brought from the back to the front of the site, which had knock-on impacts to the front of the site being closed up
Did the contractor provide an acceleration quotation?
Yes it was agreed in advance that the quotation would only include the enhanced rates for the evening / weekend work as the delay had already been settled
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