Designs of the future and the blurring of lines

Quantum Senior Contractual/Commercial Consultant Duncan Mather, discusses the issues currently affecting construction projects in the Middle East and how contractual battle lines can become blurred.

The battle lines between the main parties of a construction project – the contractor and employer/engineer – are drawn at the time of contract finalisation however such lines when it comes to where design responsibility lies often become blurred.

Within traditional ‘construct-only’ contracts, engineer’s and employer’s design consultants in this part of the world are increasingly leaning on the contractor to carry out part of their design on their behalf in subtle, or sometimes not so subtle, ways.

Employer reasons for shifting design responsibility to contractor

The reasons for the employer (or their design consultant) shifting the design responsibility to the contractor can vary but the following are typical examples:

• Employer commencing works with only partial design in the hope that the contractor can ‘complete’ the design thus saving design fees.
• Ditto for the employer’s design consultant.
• Attempt by the employer’s design consultant to shift design responsibility (typically by requesting contractor proposal in response to requests for information) therefore holding the contractor responsible for the time taken to prepare proposal and for any design errors contained therein.
• Engineer keen to avoid liability for change so attempts to get contractor to complete design for him.
• Avoidance of issuing engineers instructions/variation orders for change.

“Engineer’s and employer’s design consultants in this part of the world are increasingly leaning on the contractor to carry out part of their design on their behalf in subtle, or sometimes not so subtle, ways.

Pitfalls of employer design shift

As well as being morally and contractually wrong for the employer to request the contractor to carry out any design of its behalf, there are pitfalls associated with this approach. The contractor is by nature not a designer and hence such a tactic could backfire on the employer with the likelihood of errors and re-works required before the design is accepted by the employer’s design consultant in approved shop drawings.

Further, there is the issue of insurance. In such traditional contracts, the contractor will not be obliged to take out professional indemnity insurance (PII) to cover for design risks and errors. However, if he undertakes to carry out and provide any design at the request of the employer, and errors appear in the design which cause the employer additional cost to rectify, the contractor will be liable to the employer.

As such, it is time for the contractor to push back on the employer and rather than accept the dangerous and rocky road to putting together contractor proposals be prepared to say no.

One of the main reasons why the contractor accepts such requests from the employer is he just wants to ‘get on with the job’ and not risk the threat of delaying the works and the possibility of application of penalties for late completion.

Ways to counter employer attempts to shift design responsibility

• Refuse such requests, referring to the contract and lack of PII insurance in place.
• Propose joint workshop between contractor and employer/design consultant to solve the issue but make sure the final instruction and drawing is provided by the design consultant.
• If employer insists that the contractor is to issue proposal, reserve right to claim for delays due to time taken in putting together proposal together with associated costs in resources required for this.

Moving forward, it is hoped that this blurring of roles within a traditional contract will disappear and become a thing of the past.  The risk of things turning sour for both sides are too large and any design responsibility bestowed onto the contractor under a traditional construct contract which is not geared towards handling such a remit is to be strongly avoided.

This article is published with the purpose of promoting discussion only. The contents must not be relied upon or applied without first seeking professional advice.