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Under traditional contracts common in the construction industry the engineer has a dual role, which can often result in disputes. The engineer is an expert adviser and representative of the client when administrating the contract but is required to act independently, fairly and impartially as a professional engineer. The engineer’s dual role is derived from common law where the engineer is retained by the client, with certain duties owed exclusively to the client. The engineer is also required to provide certain decisions that become binding on both parties to the contract. The engineer plays a large role in the administration of the contract and has many duties to perform from providing directions to the contractor, through valuing the work, to issuing certificates and payment schedules, all of which must be done without undue delay. The engineer is required to act solely on behalf of the client to order variations and to provide directions that require subsequent decision by the specification. Looking at disputes that I have been involved with, there is often a conflict resulting from this dual role. At the time of tender and award of the contract all parties tend to view the project as simply getting on with the job and constructing it. Variations, site difficulties and extensions of time are the furtherest thing from all parties’ minds. The engineer believes that the documentation is sound and that the project as designed is able to be built for the sum tendered and accepted. The client has budgeted for the sum tendered and has developed a cash flow for the duration of the project. Unfortunately that is not always the case. There are many examples that indicate that the engineer has not completed adequate investigations nor provided documents that allow the project to be built. The contractor, with every good intention, commences construction, only to find that the ground conditions are not how they are described in the contract documents, or the project, as designed and specified, cannot be built, or the quantities are vastly different from that shown in the schedule. The contractor then submits a variation claim to recover the costs of doing additional work and variations to the initial design. The engineer frequently becomes protective of the initial design being reluctant to approve variations and takes the stance that a competent contractor would have been able to foresee the problem or difficulty. At this stage a dispute develops where the contractor believes he is fairly entitled to the variation. The engineer is protecting his or her position, as it is potentially embarrassing to go to the client asking for an increased project budget, and declines the request for a variation. Alternatively, the client may be pressuring the engineer to refuse the variation, as it may have a large impact on the project budget. It is also apparent in many disputes that personalities get in the way of sound engineering decisions; where the engineer takes a personal affront to claims by the contractor. There is a simple way to solve this issue while maintaining the dual role of the engineer. Clients must be prepared to pay a fair price for the investigation, design and documentation of a project. The client’s budget can be considered (simplistically) in two parts – the design budget and the construction budget. Combined they give the total cost of the project. It is cheaper for the client to spend more money on the investigation and design phase of a project than to incur the increased costs once construction is well under way. Either way, the client will need to cover the project cost, but it will be better defined if adequate professional resources have been provided early in the project. Inadequate investigations and design, and poor documentation create savings on the client’s design budget, however, it is very likely that this will lead to increased construction costs and project duration. It is a false economy for a client to endeavour to save money at the design stage or professional services part of a project as the costs of employing a consultant are considerably less than the cost of paying for plant and machinery that is not completing work in an efficient manner.
Contractor Vol.31 No.6 July 2007 All articles on this website are copyright to Contrafed Publishing Co. Ltd. |