Written by Canute Chandrakumaran – Land Development Team Leader at Thomas Consultants Ltd
In most NZS 3910 physical works contracts, the Engineer will be named in the contract. He will not generally be a party to the contract. The Engineer will have input into the design produced on behalf of the principal. The Engineer will also have a checking role, ascertaining the Contractor’s proposals meet the Principal’s Requirements or not.
What is a role of an Engineer to the Contract?
Clause 6.2.1 of the NZS3910:2013 Contract, states that Engineer has a dual role: On the one hand, the Engineer acts as both the adviser to, and representative of, the Principal – administrative role such as issuing variation instructions as part of management (6.2.1(a)), and on the other, as an independent and impartial decision maker – relation to Contractor’s claims for extra time and payment as well as determinations as to valuation (6.2.1(b))
Does an impartial engineer exist?
It may be difficult to expect an engineer to wear these two hats in good faith when the opportunity for a conflict of interest is inherent in the role.
The Engineer may, from time to time by notice to the Contractor in writing, appoint an Engineer’s Representative (ER). There are items that the ER cannot undertake including: reviewing dispute matters; valuing Variations; granting extensions of time etc. (these are further detailed in clause 6.3.3).
At Thomas Consultants our staff have acted as Engineer to the Contract on several projects. Our teams’ Engineer experience ensures that our clients have a knowledgeable professional overseeing all aspects of the project, along with an ER who can assist the Engineer in the day-to-day administration of the Contract. This provides the Principal with a cost effective solution with the peace of mind that they are getting the best service available.
Who can act as Engineer to the Contract or Engineer’s Representative?
The Engineer and ER must be suitably qualified and a natural person (an individual human being, not a company or firm.
At Thomas Consultants we see the ER as a great training opportunity for some of our younger and less experienced team members to be mentored and up-skilled in this area. Our highly skilled Engineer oversee all work and take them through the aspects of the project that they are unfamiliar with.
What happens if the Engineer’s decision is disputed?
Disputes commonly arise where an Engineer is acting in their capacity as a decision maker. Given that the Engineer is not a party to the contract, but instead separately engaged by the Principal, that relationship can often lead to contentious decisions.
An Engineer is required to act fairly and impartially to both parties. They are not compelled to give reasons for their decisions; however, I find that in all cases it is advisable and sensible to do so. Firstly, to ensure common communication between all parties and secondly, to provide clarity over how as Engineer has used own professional knowledge, reasoning, and skill in forming their judgement.
I personally find it helpful for both parties, for the Engineer to provide a succinct overview of the reasons that have led to the decision.
If either party to the Contract wishes to dispute the Engineer’s findings, there are clear pathways set out in Clause 13 of the Contract for alternative dispute resolutions.
The Engineer role is well established in the construction sector in New Zealand. When it functions correctly, it works well. When it does not, it can cause or exacerbate disputes between the contracting parties. Although a pragmatic compromise, there is no getting away from the fact that the dual roles create unavoidable conflicts of interest for the Engineer, whose first loyalty is to the principal.
How can Thomas Consultants Help?
We understand the significance of the Engineers role being completely independent. It’s a crucial part of the function which ensures the best outcomes for a project.
Our experience ensures that you have a knowledgeable professional overseeing all aspects of the project, along with representatives who can assist the Engineer in the day-to-day administration of the Contract. This provides the Principal with a cost effective solution with the peace of mind that they are getting the best service available.
In the Engineer role, we provide our clients with logical advice and guidance to ensure that every party involved is working towards producing a better result. We are always happy to discuss how Thomas Consultants can assist in this role on your next project.