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Construction Law/Engineer not approving alternate material

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Question
I am working with one of the Contractors as Quantity Surveyor. We are facing an issue in one of our projects. The project is an infra-structure development project. The Contract was based on  FIDIC 1987 4th edition in a traditional procurement route.

The Contract specified a brand for a particular material with strength 10N/m2 or equivalent product.  As an equivalent product the Contractor proposed another brand material with 11N/m2.  The Engineer’s Representative approved the material submission. The Contractor progressed with work completed 70% of work until the progress of Works was suspended on the instruction of the Engineer.

During the suspension, as mutually agreed with the Contractor, the Employer replaced the engineer and then the Works restarted. The newly appointed Engineer asked to resubmit all the material submissions. The Engineer disapproved the material submission the alternate material by the contractor stating that they do not comply with the Contract requirements. They also asked the contractor to submit method statement for rectify the work completed.


We demonstrated that the submitted material and so the installed materials fully comply with the Contract requirement. The specified material only had a compressive strength of 10T/m2 where as the alternate material proposed and installed by the contractor has compressive strength of 11T/m2. The engineer then tried to apply additional and unreasonable criteria for approving the alternate material. One of them was an undertaking letter from the material manufacture. We informed them that we are not liable to provide such warranties. The argument is going on now.
During the discussions I understood that newly appointed Engineer does not have confidence in the adequacy of the design by the previous consultants. He is trying to impose additional factor of safety without admitting that but by asking the Contractor to revise the material with his own cost.
This portion of the works accounts for only 15% of the overall scope. But delay in executing this will delay the other works to be carried out after this activity and the project delivery will be delayed.
We (the contractor) are confident that the material proposed and installed by them is complying with the Contract specification.  We are not sure about the design adequacy which is not our liability as per the Contract.
In this scenario; could you please answer my following questions?

•       Can the contractor continue with the previously approved material without getting the approval from the new Engineer?   - If yes; what will be te consequence?  . if no; as per which clause in contract.
•       Is the contractor is entitled for EOT if he continue to convince the Engineer and wait for the approval of the submitted material or revised design from the Engineer.  If yes; are there any risks in doing so?  (notices will be served)
•       If the contractor resubmit the material as advised by the engineer and do the rectification also. Then while progressing with the work if he submits a claim for additional payment for rectification and revised material specification; contractually or legally is there any ground to get the claim approved?

Answer
Dear Rameesha,

Thank you for this question.

The Contractor was granted approval for the alternative material it submitted. From your narrative I understand that the contract named a brand but allowed an approved alternative. If the new Engineer (Engineer 2) now intends to change that permission it will be a variation and the contractor will be entitled to reimbursement of any costs reasonably incurred. The Employer assumed liability for the alternate material once it was approved by his original Engineer (Engineer 1).

"Engineer 2" has instructed that a different material is used. The Contractor should comply with that instruction but at the same time continue to raise objection and assert a claim, using the appropriate procedure set down in the contract.

If the Contractor continues to use the material approved by "Engineer 1" it acts at its risk faces the possibility of being instructed to remove the material and replace. The cost of complying with instruction "Engineer 2" is probably less than the costs the Contractor might face. Even if the Contractor demonstrates subsequently that "Engineer 2" was unreasonable in his instruction the costs incurred by Contractor and the delay Contractor caused by failing to comply with "Engineer 2" instruction might not be recoverable.

I do not advise that Contractor delays in the hope of persuading "Engineer 2". The Contractor has a duty to mitigate the Employer's cost. The cost of delay to the Employer is likely to be more much more than any additional cost the Employer might face resulting from "Engineer 2" instruction to use a different material. For the Contractor to cause the Employer to incur such cost would be unreasonable.


I hope that this assists you.

Kind regards,
John Dowse

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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