Should the contractor follow it's tender (contract) programme line by line?
Date: 23 March 2019
It is very obvious, that during the tender period, which is quite often very short and not long enough for the contractors to prepare a fully priced tender, contractors run hectically between quantities take off, pricing subcontract works, allocating provisional sum items, preparing tender programmes etc. The end result (tender submission) is quite often an incomplete package because:
• It includes many exclusions/tags
• It includes Provisional Sum items
• It includes Provisional Cost items
• It includes a very high-level tender programme which may not include all scope of works and may not be consistent with the written methodology due to unknown factors.
In the end, some exclusions/tags might be resolved before accepting the offer and executing the contract. However, the contract documents will still consist of numerous uncertainties like Provisional Sum items, incomplete design, tender programme etc.
You might be wondering, what does any of this have to do with my question “Should the contractor follow it's tender (contract) programme line by line?” let's have a look at what happens when a contractor does not follow the design and the specification word by word. Any unapproved deviation from the design and specs, the contractor will be in breach of its contract, and the implications could be substantial.
On the other hand, what happens if the contractor changes its methodology while preparing its detailed construction programme after it was awarded the job but still shows the same completion date as per its tender programme? Most of us will say “we don’t really care, it is up to the contractor how to get from the start to the end within the contract time frame”. While this might be true, what happens if the contractor loses 10 days due to wet weather (based on the new methodology etc.) instead of 1 day (based on its initial tender (contract) programme? Would the contractor be considered in breach?
We cannot expect the contractor to follow it's tender (contract) programme line by line because of the speedy nature of tendering which exposes the contractor to technical/methodical errors. But if that is the case and considering that the accepted tender programme forms a part of the contract documents (like specifications that must be followed word by word), then why the programme should be treated differently?
In an ideal situation, the design will be 100% complete with zero errors and omissions, the contractor’s tender submission will also be 100% complete with zero tags and zero provisional sums etc. unfortunately, this is not reality. The reality is that nothing is complete at the time of tender.
One mitigation suggestion is that the tender programmes do not form part of the contract documents at the time of award. However, using the tender programme as a provisional programme to establishing a detailed construction programme within the first 2 months of the project (not within 10 days as NZS3910 requires) to allow the contractor enough time to dwell into the details, includes all the scope of works, identify risks that can affect the programme, and get its methodology correct.
The programme will then need to be reviewed and accepted (preferably by independent experts), then incorporated into the contract documents. Of course, adjustments to P&G should be part of the exercise.
If you are interested in this approach, contact me, and I will assist you in putting the process in place to achieve the best-desired outcome.
By FC International Ltd © Copyright 2019