Design of equipment in the ECC

In the NEC3 and NEC4 Engineering and Construction Contract (ECC), equipment is defined as what the contractor uses to provide the works. In NEC contracts, ‘works’ is what in other contracts is known as the permanent works (what is left behind) whereas ‘Equipment’ includes what is sometimes referred to as temporary works or construction plant. 

On some projects the design of equipment, for example propping a significant excavation, can be critical to the project and to health and safety. For a tunnel project, the tunnel boring machine is absolutely critical – and is also part of equipment. So too are sacrificial piles to a railway embankment and major scaffolding for a stadium.

This FAQ-style article aims to help NEC users understand how design of equipment is dealt with by the contracts. 

Who designs what?

NEC4 ECC clause 21.1 (‘The Contractor’s design’) is very clear, stating that the contractor designs the parts of the works which the scope (or works information in NEC3) says the contractor is to design.

In contrast there is no explicit statement that the contractor has to design its equipment – the implication being that, if there is any need for design, it will be carried out by the contractor.

What designs have to be submitted for acceptance?

NEC4 ECC clause 21.2 is also very clear in that the contractor submits the ‘particulars’ of its design of the works as the scope requires to the project manager for acceptance. 

In contrast, clause 23.1 (‘Design of Equipment’) provides no explicit prompt for the scope to state what equipment design is to be submitted for acceptance. However, if the client does want certain equipment designs to be submitted, it should list these in the scope.

What if, after award, the client wants to see more designs? 

In the case of more designs for the works, this would require an instruction to change the scope (clause 14.3), which would lead to a compensation event (clause 60.1(1)). This is appropriate as the further item for project manager review may well impact on the contractor’s programme. 

In contrast, if the client wants to see equipment designs in addition to those stated in the scope, it can simply instruct this under clause 23.1. Such an instruction is not one of the list of compensation events in clause 60.1. The logic appears to be that the contractor will in any case have to carry out the design and, as explained below, the need to submit the design for acceptance will not hold up the contractor.

What are the reasons for not accepting designs?

The project manager can not accept a design for any reason but, if that reason is not in the contract, this will trigger a compensation event (clause 60.1(9)). 

Reasons stated in the contract for not accepting a particular of design of the works are that it does not comply with either the scope or applicable law (clause 21.2).  Reasons stated for not accepting a particular equipment design are that it will not allow the contractor to provide the works in accordance with either the scope, the applicable law or the already accepted contractor’s design of the works (clause 23.1).

What if the project manager does not accept a design?

Clause 21.2 says the contractor cannot proceed with ‘relevant work’ until the project manager has accepted its particular design for that work. In contrast, this hold on the contractor does not apply to a particular equipment design that has not been accepted. 

So what is the point of submitting equipment designs?

In an extreme case the project manager could use clause 31.4 to instruct the contractor not to start any work involving an unacceptable equipment design. Normally this would trigger a compensation event. However, the project manager could argue this is the ‘fault’ of the contractor (clause 61.1 or 61.3) because the contractor is not designing as required by the contract. If so, it would not be a compensation event – but this may result in a dispute.

Are special provisions required?

If there is some critical equipment design and the client wants there to be hold point on that design while it is reviewed and accepted by the project manager, it may be best to make a special provision in the contract. 

The easiest solution would be simply to state in the scope that, ‘The Contractor submits the design of the [item of Equipment] for the acceptance of the Project Manager. The Contractor does not proceed with the relevant work until the Project Manager has accepted that design.’ 
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