Following on from our introductory article on the revisions to NZS 3910:2013, this is the first in a series of articles taking a deeper look at the proposed changes. The Standards committee are seeking your views, with submissions due by 30 June 2023.

Releasing the tension

Probably the most publicised and debated aspect of NZS3910, for many years, has been the tension within the Engineer to Contract role, with being the agent and expert advisor to the Principal on the one hand and the independent and impartial certifier/decision-maker on the other. Those debates have been heeded by the Committee which has substantially changed Section 6 in DZ3910.

As a result, the draft document is amended throughout with replacements to the old term ‘Engineer’ with two new terms reflecting the separate roles played, namely (our acronyms, they're not used in DZ 3910):

• Independent Certifier (IC); and
• Contract Administrator (CA).

In relation to both roles, they are to be:

• One natural person, not being a Body Corporate or firm,
• identified in the Specific Conditions, or
• such other one natural person as maybe subsequently appointed by the Principal under section 6.1.

What has changed and what has not?

Existing 6.1.1 (Principal’s duty to ensure CA and IC fulfil their obligations), 6.1.2 (identification of the CA and IC in the Specific Conditions) and 6.1.3 (process where CA or IC is no longer authorised or no longer available to fulfil that role) remain largely unchanged.

New 6.1.4 is a sensible addition. In the event either the CA or IC is temporary unavailable, the Principal may notify the Contractor of a person authorised to act in the interim.

New 6.1.6, however, may be the subject of greater debate. It provides: The Contract Administrator and the Independent Certifier may be the same person.

One of the drivers of the change to recognise and ensure the separation of roles of the old ‘Engineer’, was to avoid a single person performing both roles. New 6.1.6, if used too often or misused, could render that change redundant. However, it is also recognised that to enforce the requirement may be impractical or uneconomic for smaller value contracts.

New 6.2.2 restates the duties of the IC and lists, without limitation, the various matters on which they are to make a Decision. On first reading, such matters as deciding entitlement to and valuing of variations and granting of EOTs would seem to overlook the role of the CA. But when the corresponding provisions (sections 9 and 10) are reviewed, the new approach is to encourage agreement to be reached between the Contractor and the CA and only when an agreement cannot be reached that the IC is called upon to Decide. In this regard, the setting out in 6.2.2 of the types of matters reserved to the IC is useful.

Similarly, 6.2.3 lists the limited examples where the IC acts as an authorised agent of the Principal. This is largely unchanged from NZS 3910.

Section 6.3 has been rewritten. There is no longer an Engineer’s Representative (ER) or assistant to the ER. In their place, new 6.3.6 permits the Principal to engage ‘Advisors’ to assist the IC and/or CA in carrying out their duties. This includes making submissions and recommendations or providing other advice, assistance and support. These Advisors have no authority to issue Instructions or make Decisions, whereas the ERs could under delegated authority.

Another feature of section 6.3 is to simplify such terms as ‘directions’ or ‘instructions’ to the new term ‘Instruction’. As this is an administrative exercise, the definition of Instruction is limited to the CA role and means ‘Any instruction issued to the Contractor by the [CA] in accordance with the Contract’.

A useful addition to the obligation when issuing an Instruction is to indicate ‘whether or not the Instruction to be a Variation’.

New 6.3.7 specifies what the IC may consider when making their Decisions, that each Decision shall be in writing, and include reasons ‘where it differs from the matter referred to the [IC]’.

Listed are six matters which all appear sensible and logical. However the following three merit further mention:

• any relevant recommendations by Advisors,
• independent advice obtained by the IC,
• and the results of any enquiries made or investigations carried out by the IC.

The only question here is whether, as a matter of natural justice, the Principal and the Contractor should first view that information prior to the IC making their Decision. On the other hand, this could result in endless submissions, slowing down the Decision making process. Protection is afford an unhappy party through the new section 6.4.3 review process. This section is covered in our upcoming article on dispute resolution ‘DZ 3910: A new dispute resolution regime’.