Beware Back Door Variations

Tuesday, August 30th, 2016
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Dulux Exsulite Construction – 300 x 250 (expire Dec 31 2016)
project management
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Amongst the many things a project manager (PM) has to keep an eye on is the inadvertent occurrence of what I term ‘back door variations.’

These can arise in a number of ways, but the increasing use of collaboration tools and web-based project management systems affords a greater opportunity for them to occur.

So what are they?

Back door variations are essentially inadvertent ‘instructions’ issued to the contractor by way of a communication that simply carries a revised drawing or a comment, perhaps on shop drawings or submittals for ‘approval/acceptance.’ They might also arise from a revision of a specification, or drawings, requirements of a local authority via the consenting process or similar.

This is not too difficult to do in the daily throes of answering queries and reviewing drawings.

Simplistically, to state in response to a submission that the size of steel member is wrong and that a larger one should be used is direction or an imperative; it is a communication that is required to be obeyed and it is a directive that ought not to have been made. The correct response would be to ‘comment’ that the sizes proposed do not meet the requirements of the specification/drawing and the submission must therefore be rejected.

The key to negating this type of scenario is to ensure that the communication paths for such systems is correct and mirrors the contractual and project management processes that prevail.

That is often easier said than done, however. It also demands of the design team that they too understand their remit and more importantly their boundaries.

The processes, whatever they may be and however they are structured, should not change what is done, only how it is done. Unfortunately, it is often the case that as these systems are introduced, common sense seems to take a leave of absence. To do this well requires a very clear understanding of construction and the design process as well as the conditions of contract and, I would suggest, contract law. The design team should be party to determining these processes, and once in place they require policing on an ongoing basis. That is a task that falls naturally to the project manager or the architect, but really on if he/she has a coordination role.

The real danger is that by allowing a direct communication link between members of the design team and the contractor, a quasi-contractual relationship is created where none was intended.

I have ‘structured’ four of these collaboration/project management type tools, and it is far from simplistic to ensure that this doesn’t happen. It is essential that the need for what should be informal communication is balanced with the need to adhere to the contractual rigour that prevails. The consequences can be severe if this isn’t recognised at the outset and clear communications must be set out and where possible, the system(s) should prevent inadvertent, direct instruction being issued to the contractor.

The New Engineering Contract makes the PM central to everything, and whilst this goes some way to helping to avoid the issue, it doesn’t eradicate it.

Something as simple as a drawing revision, issued by a consultant to the contractor via any medium, may have a wholly unintended cost and time impact. Where the information demands of a project are such that design changes and resolution of design queries means many, many changes have to be addressed, whatever structure is in place can become a constraint and that too can have unintended consequences in respect of time and cost.

It is not though just post-contract where these issues can manifest themselves; during the design and consenting phase of a project, the design team and particularly the PM, must be cognisant of the penchant for local authorities to issue, by way of consent-related conditions, changes to designs that are subsequently transmitted to tenderers which are then costed as part of the project.

During a project I managed, as an insurance claim, an office was being repaired and refurbished, and the consent conditions demanded the construction of a smoke lobby around the lifts in the basement which had open access to atmosphere. This didn’t exist originally, and the building repair work – whilst being required to be compliant with the building code – did not have to be retrospectively compliant. As lifts are not used in the event of a fire, a smoke lobby around them when the basement wasn’t a nominated means of escape was a completely pointless piece of construction.

However, the engineer issued the modified design and subsequently the work was priced and constructed.

The insurer initially refused to pay for the cost of the lobby but eventually, it was paid for under the contract.

The engineer should have challenged this requirement, and had it not unilaterally re-issued the consented drawings, the change could have been avoided.

Some PMS may deem being involved to that level of detail to be beyond their remit, but my view and my practice is to ensure that these issues are known and addressed. It is what we are paid to do. It is time consuming but essential in order to deliver a value-for-money service to the client.

As an aside, direct (deliberate or inadvertent) instruction to a contractor by a consultant out-with an established contractual framework, is likely to be considered fertile grounds for pursuing subrogated rights by insurers. Whilst not ideal, this is probably the more favourable of the possible outcomes.

The less palatable scenario is that the insurer consider the action ultra vires and denies insurance cover, leaving the directors/partners personally liable for whatever losses the client may incur.

It may seem fatalistic to assume the eventual outcomes of these sorts of issues will be litigation. In truth, that is rarely the case, but ultimately, contractual decisions made on site do have the potential to become matters you may find yourself defending in court.

It doesn’t do any harm to let that shape your thinking.

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