Faithful+Gould has recently been involved in an adjudication to successfully secure funds for one of our clients. Adjudication is a private matter, so I can’t mention the parties or the project, but the details are summarised below:
Our client was a subcontractor appointed on a build-only basis to provide a steel and glass feature canopy to an existing civic building. The main contractor was appointed on a design and build basis. A local firm of structural engineers were retained by the main contractor to undertake the design function.
The parties fell out over a number of matters, but the main point of contention was the specification of the glazing provided to the canopy.
Both parties were in agreement as to the specification that was applicable at the time of the subcontractor’s appointment; we’ll call that Specification ‘A’.
In accordance with many design and build contracts, the main contractor took on the responsibility of satisfying Building Control. In this regard, the engineer prepared calculations for the glazing. A document was produced, which ran to some 18 pages, and concluded that the glazing was to be a different specification than that detailed at the time of appointment; we’ll call that Specification ‘B’.
This document also contained a clause that said, in summary, no action was to be taken until the calculations were validated.
The main contractor obtained a copy of this document from the engineer and sent this to the subcontractor under cover of an email which simply said: “FYI”.
Upon receipt, the subcontractor reviewed the document and, concluding that the calculations were to be validated, put the document to one side and progressed with the provision of glazing as per the original Specification A.
Work progressed on site and the completed canopy was handed over to the client. Nothing more was said until ten months post completion, when it became apparent that the glazing provided was Specification A, whereas Specification B was what had been approved by Building Control.
The finger pointing then started! The main contractor took the stance of: “I instructed you to change the glazing specification”, and the subcontractor took the stance of: “Oh no, you didn’t!”. Solicitors were summoned but to no avail, and after a further 14 months of accusations and counter-accusations, the parties were still at loggerheads.
At this point, the subcontractor approached us for assistance. After reviewing, adjudication proceedings were commenced and documents served. It was over to the Adjudicator to decide the rights and wrongs of the glazing specification.
The Adjudicator decided:
- The issue of a document as “FYI” was for information only and this was given its natural meaning. It was not issued as an instruction nor for action.
- The issue of calculations to a build-only subcontractor was inappropriate. The subcontractor builds to drawings and specifications, but not to calculations.
- The true nature of the document was determined. It was calculations; it was not a specification document.
- The “validation” caveat prevented the subcontractor acting in any event.
In summary, an effective change in specification had not been instructed, and the main contractor had to take the financial consequences of this miscommunication.
Whilst this adjudication was between main contractor and subcontractor, there are lessons to be learned, especially for those undertaking project management or contract administration duties.
Due to time pressures, it can be convenient to simply pass documents between consultants or through to contractors. However, if your intention is to instruct something, then you must clearly do so. Passing information in emails, or links to external drop-boxes, or comments in minutes could be found, as in this case, to be inadequate.
Many contracts have procedures for issuing instructions or for the giving of notifications. Failure to follow such procedures may result in communications being null and void, which can have major financial implications.