05/08/24
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Instruct Newsletter #18 - NEC - Defects: Contentious, or just good quality control?
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Building a project is difficult, and sometimes errors are made. These can result in defects which create problems for everyone. But are defects necessary to control quality or are they just a contentious part of NEC which breaks down relationships?
This week we go through the defect process, and how they should be managed to avoid conflict!
What is a Defect
Who is responsible
How to close and/or correct Defects
How to avoid conflict
Let’s begin…
1. What is a Defect
A Defect is defined in Clause 11.2(6) as:
a part of the works which is not in accordance with the Scope or
a part of the works designed by the Contractor which is not in accordance with the applicable law or the Contractor’s design which the Project Manager has accepted.
What is this saying exactly?
It’s saying two things:
You need to build what the Client has asked you to build (what’s in the Scope)!
You need to build what you (the Contractor) said you would in the design we accepted!
If you don’t build it to those requirements, its a Defect…
It’s not what we asked for in the contract….Defect
2. Who is responsible
So who is responsible for identifying the Defects and managing the process? Section 4 Quality Management sets out the parameters, as follows:
Clause 43.2 - Until the defects date the Supervisor and the Contractor notifies the other as soon as they become aware of a Defect.
The only people who can notify a Defect are the Supervisor and Contractor. The Client and Project Manager cannot notify Defects!
Additionally - The Supervisor may instruct the Contractor to search for a Defect (43.1). This is the only time a Supervisor can instruct the Contractor.
The only time the Client and Project Manager are involved is when access needs to be arranged to correct the Defects.
Ultimately though its the Contractors responsibility to correct the Defects…
3. How to close and/or correct Defects
The contract is very clear, identify the actions required in simple clauses:
Clause 44.1 - The Contractor corrects a Defect whether or not the Supervisor has notified. i.e. the Contractor shouldn’t wait for a notification!
Clause 44.2 - The Contractor corrects a notified Defect before the end of the defect correction period (which is stated in the Contract Data). The period begins at Completion or when the Defect is notified if its after Completion.
Clause 44.4 - The Project Manager arranges for the Client to allow the Contractor access.
BUT:
What if the Contractor or Project Manager doesn’t want to correct a Defect
What if the Contractor won’t correct a Defect
What if the Contractor or Project Manager doesn’t want to correct a Defect
Clause 45.1 - The Contractor and Project Manager can propose that a Defect is not correct, by changing the Scope. I.e. A defect is something which is not in accordance with the Scope, so change the Scope so it’s not a problem!
In this instance:
The Contractor submit a quote with a reduced Price, or earlier Completion Date (or both)
Project Manager accepts or does not accept the quote.
If its accepted, the Project Manager changes the Scope, Prices, and Completion Date accordingly.
What if the Contractor won’t correct a Defect
Uncorrected Defects are covered in Clause 46. Two scenarios play out, either access is given for the Defect to be corrected, or access is not given (not the Contractors fault).
If they Contractor is given access but doesn’t correct the Defect, the Project Manager can price up the cost of having someone else undertake the work and the Contractor pays this amount. The Scope is treated as being changed to accept the Defect. (46.1)
If the Contractor is not given access and doesn’t correct the Defect, the Project Manager assesses the cost to the Contractor of correcting the Defect and the Contractor pays this amount. I.e. it doesn’t cost the Contractor any more that it would have done to correct it. (46.2)
4. How to avoid conflict
Avoiding conflict comes down to some key elements which should always be used during delivery, whether its with NEC or not.
Everyone involved in the process should:
Know their role and responsibilities. Discuss these with the other team members.
Be honest about Defects, notify them, create a plan for correction, or discuss why there may be differing views.
Document the discussions for future reference.
Avoid opinions where possible, use facts and data to justify decisions and actions.
Act as stated in the contract, don’t deviate, just follow the process.
If you do end up in conflict….continue to apply the contract as it should be, and follow the process for escalation!
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