New requirement for advanced notification to engineers in construction contracts: Contractors beware

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As a contractor you must notify the engineer in writing as soon as possible if you become aware of any issues which may affect the contract price, delay completion of the project or result in a breach of statutory duty. If you don't you may have to suffer the additional costs under the changes in the commonly used NZS3910 Conditions of Contract for Building and Civil Engineering Construction.

The commonly used NZS3910 Conditions of Contract for Building and Civil Engineering Construction was subject of a review and revamp at the end of 2013.

The new NZS3910:2013 contains a number of new features and changes, which we will be highlighting in the next few articles.

One of the most important new features to be aware of as a contractor is the new provisions for advance notification of matters likely to affect cost or time (new clause 5.21). In short, if you as a contractor become aware of any matter which is likely to materially affect the contract price, materially delay completion of the contract works, or result in a breach of a statutory duty in connection with the contract works then you must notify the engineer in writing as soon as possible. Either you or the engineer may then require the other to meet to explore proposals for avoiding or reducing the impact of the notified matter.

The clause is designed to promote a no surprises culture however you should be aware that a failure to notify may affect the valuation of any variation arising out of the matter in question e.g. if a change entitles the contractor to a variation, but the costs of the variation would have been reduced if the notification had been provided earlier, then the valuation of the variation may be reduced.

If you are contracting using the new NZS3910:2013 then we would urge you to keep this advanced notification requirement in the back of your mind and if in doubt, disclose any issues to the engineer as soon as you become aware of them.

Should you have any queries or need assistance with regard to NZS3910:2013, then please do not hesitate to contact a member of our expert Construction Team or you can contact Stephen Brent directly at stephen.brent@cavell.co.nz or on +64 27 248 5020.

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