Key Issue 1 - why were there so many design changes?
Combination of insufficient quanities and a lack of detail within the design. For example there were numerous missing containment routes, power supplies etc.
Key Issue 1 - could anything have been done prior to Sisk’s involvement to minimise post-contract change
- Change procurement route to design and build
- Take longer in the design stage to ensure requriements are captured.
- These projects are repeatable; I would have advised lessons learned from other projects and incorporated as-built information into the new designs.
Key Issue 1 - how did the design team responses to the RFIs constitiute design changes?
- An RFI response should clarify exisiting design
- Responses were including additional quantities with red pen mark-ups
Key Issue 1 - could you have refused to pay your supplychain for uninstructed change?
Potentially, however it is important to act with integrity. The supply chain are working in good faith for the good of the project and that should be reciprocated.
Key Issue 1 - for Option 1, would you have been entitled to additional time and money for delays to Client approvals?
Yes, in our contract there is a procedure for ‘delayed drawings or instructions’ (Clause 1.9). Following notification by the GC they may be entitled to an extension of time or additional cost, if there is missing information which prevents progress of the works.
However, it is important to offer the Client a high standard of service and endeavour to minimise disruption where possible. Relying on these clauses which may disrupt the project is uncollaborative.
Key Issue 1 - for Option 2 could you have sought an instruction with costs TBC? this would protect your position so the client cannot renege on the agreement
Client Process was very inflexible and long, not possible to work outside of it with separate instructions:
1. DRB deck released by Client
2. Sisk provides a budget
3. Client decides whether they want it
4. Full design released
5. Sisk price it
6. Client agrees and then Instructs the change
Key Issue 1 - for Option 2 you note that this could lead to delays in the final account. Why couldn’t costs be agreed after the instruction rather than waiting to final account?
Due to the large volume of change and the length of time it takes for the client to review, there would have likely been a backog of change; which inevitibly would delay the final account, as each change depends on the previous change to be approved.
Key Issue 1 - how do changes impact the critical path?
The ciritcal path is a sequence of acitivities which impact the completion date. A change may impact the completion date, if it interferes witht the critical path.
For example a milestone on the project is for all electrical panels to be ‘tagged’, they are tagged once all cables are terminated into the panels. Changes which include panel modifications or additonal circuits may impact the critical path.
Key Issue 1 - what records would you keep to assist with substantiation of variations?
- RFI correspondence
- Demonstrate deviation from original design
- Notify the client of any time / cost implications and keep record
- Timestamp the issue and keep note of progress at time of change including pictures
- Use BoQ assessment where possible but also keep record of actual cost to complete the works. Record any dayworks, labour, materials etc.
Key Issue 1 - what factors did you consider when using ‘professional judgement’ to distinguish between high risk and low risk change?
- The value of the change
- The potential programme implications
- The number of cross-discipline interfaces
- Resource availability to complete the additional works
Key Issue 1 - what continous advice did you provide when implementing Option 3?
- Receive a variation notification from the supplychain
- Assess whether it is a design change
- If a design change, is it applicable to the Client or is it domestic
- If Client, assess whether high risk or low risk change
- Notify the client and advise of programme and cost implications
Key Issue 2 - why was the cost of Option 1 so much higher than the others?
- Capacity: the supplier had limited capacity and may have included additional cost to reflect their workload.
- Reputation: the supplier is a market leader within the industry and that reputation can command a premium
- Overheads: international businesses can have larger overheads and operating costs than smaller ones.
- Subcontracting: these large businesses can outsource which can compound profit margins.
Key Issue 2 - what contractual and procedural controls did you put in place to manage the risk?
- Full commercial evaluation DNBi, contract with parent company
- Liquidated damages provisions
- Milestone payments which relied on quality checks
- Regular meetings to ensure progress and quality
- Appointed a Senior Sisk manager to oversee the package
- Held a contingencty for risks and scope gaps
Key Issue 2 - why didn’t you offer the cost saving to the client?
The main contract is lump sum, therefore Sisk carry the financial risk of delivering the works. For the same reason Sisk can’t pursue the client for losses on package procurement, they are able to profit from procurement gains.
The E-House specification did not name any specific manufacturer for the works, nor did the Client. The package was also CFCI, therefore Sisk were free to appoint a party which they deemed suitable.
Key Issue 2 - how did you ensure that you were getting a quality product prior to appointment?
- Went through the specification with the supplier line by line and had them initial each item to ensure compliance
- Reviewed their past projects and experience
- Visitied their manufacturing facility and QA/QC procedures
Were there any amendments to your Main Contract?
Few amendments of note:
1. Design liability ‘Fitness for Purpose’ to ‘Reasonable Skill and Care’
2. Limitation of liability under the contract included
3. Payment terms amended (30day payment terms)
Key Issue 2 - Option 1, you advised that programme logic and sequencing could be reviewed to accommodate the extended lead time. How did you reach that conclusion?
- MV cables pulled and immediately terminated into the UPM
- UPM cannot be energised until the power is available
- UPM terminations can therefore be delayed
- With delayed terminations, the lead time of the E-House can be increased.
What impact of did the postponement of Phase 2 have on your scope of works?
The issue arose due to the delay in the availability of power to the project, which is required for the energisation and commissioning of the equipment. The substation was being constructed concurrent with the Datacentre by a third party.
The works were Suspended and then the TOC date was amended. Then Prolonged Suspension was agreed until the power is available in 12months time.
Why was a Sisk Subcontract used rather than a typical standard form subcontract?
- Sisk familairity of terms
- Compatible with all standard forms
- Can be used with all clients and regions with amendments
- Supplychain familiarity and ease of appointment
Key Issue 2 - What was the holisitc / commercial evaluation you undertook prior to advising that Option 3 was most appropriate?
- Capability and experience
- Production and QA/QC
- Page turn specification
- Review of interfaces
Key Issue 2 - you mention not all change was recovered. What changes were not fully recovered?
- Primary vs secondary containment
- Items on CSA drawings not on elec
2.(a) Transformer sump pumps elec
2.(b) AOV: RFI incuded a spec not in the contract
