I am currently reviewing specifications on one of several contracts on a major project and thought a brief reminder of what benefit a lawyer or some other non-technical commercial professional could bring to such a review might be useful for our readers:
- Sometimes the specifications document or bill of quantities contains a repetition of the contractual terms or schedule of amendments to such terms. This should be avoided to avoid direct discrepancies between the terms and the specification or any ambiguity
- The defined terms used in the specifications should be consistent with those in the terms and conditions of contract. It is very rare that I see this rule adhered to on the first draft of the specifications
- The specifications should be consistent with the landscape of the chosen standard form contract. If for example, an NEC3 contract is being used the documents containing the specification should be structured to conform to the requirements for a Works Information and Site Information and pricing made on the basis of the main option chosen. I have often seen in a first draft of a specification no differentiation between site information and works information and an inadequate activity schedule even though NEC Options A or C are chosen.
Avoidance of Ambiguity
Rules of drafting in terms of using clear words, helping to ensure enforceability of contractual provisions and care in avoiding agreements to agree are still required in the specification documents. Sometimes in certain engineering sectors the specification documents are based on marketing documents and contain claims which could be treated as guarantees which the selling party would not intend particularly as performance guarantees based on agreed input specification. Such documents should be carefully reviewed in the light of negotiations to document the parameters of obligations on both parties.
Certainty and Incentivisation
Specification documents should drive the ability for the contractor or consultant party to price with certainty. The key is for the client organisation to provide clear information to allow the works or services to be adequately scoped. It is amazing how often this element of the contract is left until last in the procurement process or is not given sufficient attention.
Clarity of scope will assist both parties in identifying areas where the works or services package could be incentivised. A clear baseline for requirements may make it possible to incentivise earlier performance or allow the tenderer the ability to suggest alternative bids which may lower bid costs through different sequencing of works or services or the packaging of such works.
These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.