1. Introduction

When we write about the builders' design, the two performance standards NS 8405 and NS 8406 differ in principle from the turnkey standard NS 8407.

In execution centers, the starting point is that the builder designs everything, while the contractor performs only what is projected.

In the turnkey contracts, the developer has - in principle - only prepared a preliminary project with functional requirements and then it is the general contractor who will carry out the necessary detailed design that ensures that the functional requirements are met.

For these reasons, among other things, the competence and composition of the organization of a general contractor will be far more extensive and complex than that of an execution contractor.

This will presumably mean that a general contractor will be far better able to uncover any errors and deficiencies in the builder's design than an execution contractor will be.

Unlike our other articles, it is not natural to treat the rules on the builder's engineering in aggregate for the three standard contracts.

The builder's obligation to provide engineering is also more extensive in the execution centre prices than in the turnkey contract price.

Accordingly, we have chosen to first deal with the provisions on builder's engineering in NS 8405 and NS 8406 and then deal with the provisions of NS 8407.

2. Builder's design in the execution center prices

The provisions of NS 8405 and NS 8406 are substantially coincident, and the relevant provisions are set out in the matrix below.

That the builder is obliged to “provide necessary drawings, descriptions and calculations” is of course, and follows from the provision of “Engineering” in the two standard contracts.

However, it does not say anything about when drawings, descriptions etc should be provided.

Experientially, this creates some conflicts in execution centers because contractors often find that the builder delivers drawings etc too closely up to the time of production.

In NS 8405, paragraph 20.3, there is therefore a provision dealing with “Builder's Participation Plan”. It follows from these provisions that the contractor “may require the builder to draw up and, if necessary, revise a plan for the provision of the services on which the contractor depends, including the design of the contract work”.

The parties should, in our view, agree on a drawing delivery plan, the starting point for which will normally be the contractor's progress plan.

When creating a drawing delivery plan, one must take into account that the contractor will need time to both mobilize crew and machinery, but also make material orders, etc.

A drawing delivery plan must therefore take into account that a contractor cannot order what he needs of materials and materials before the drawings are available.

When the parties cooperate in the preparation of a drawing delivery plan, the designers should also be included in this work since they are the ones who actually design.

It is not uncommon for the designees to cause challenges for the executing contractor who then backfire on the builder. Consequently, the builder should have at least as firm a grip on his projectors' works as he controls the executing contractor.

Furthermore, it follows from NS 8405 paragraph 19.2, second paragraph, that the builder bears the risk of all the engineering that he has provided.

As mentioned at the outset, an execution contractor probably has less prerequisites for detecting defects than the organization of a general contractor including contract assistants would have.

That said, it must be clarified that the contractor has the obligation to control the engineering that he receives. On the one hand, this follows from the general obligation of loyalty, but secondly, this is expressly stated in NS 8405, paragraph 21.1, and NS 8406, paragraph 18.2, second paragraph.

It follows from these provisions that the contractor shall carry out a conscientious review and control of all that the builder supplies of engineering.

The starting point for this check is what can be expected of a normally diligent execution contractor.

If there is evidence of errors or other design errors notified by the contractor, it follows from NS 8405 paragraph 21.2. “The duty of the builder to answer” that this one should answer “without undue residence” and “advise how the contractor should behave”.

In such a situation, the solution may be for the builder to correct the error (s) by redesigning. If this is done quickly, without disrupting the contractor's progress or otherwise representing a change that entitles the contractor to a remuneration adjustment, everything will be in order.

An alternative may be that the redesign entails that the works have to be done in a different way than originally agreed. In this case, there will be a change where the builder issues a change order, and then the contractor must notify if the change entails a requirement for a deadline extension and/ or remuneration adjustment.

A third option may be for the builder to dispute the contractor's opinion and order the contractor to perform the works as designed. If the contractor maintains that there is an error, he may notify that the order is considered to be an irregular amendment order. In this case, the contractor must comply with these rules and notify etc.

3. Builder's engineering in turnkey contracts

NS 8407 paragraph 24.1 deals with the builder's engineering and the heading is “Builder's risk”.

From these provisions it follows that the builder has the risk of the solution choices etc. stated in the builder's contract documents.

Normally, the builder's design will consist of a series of function descriptions prepared for the individual subjects, performance descriptions, reference to relevant standards, manuals, construction detail sheets, etc.

The scope of documentation, even if there are no detailed descriptions, can therefore be very large.

The special feature of turnkey contracts is that the general contractor must design further on the basis of the design that the builder has carried out in advance of the tender competition.

There is a risk that errors detected after the building has been completed may also be due to errors in the builder's prior design or in the general contractor's detailed design/execution.

For these reasons, the general contractor also has a general duty of investigation, which includes, among other things, the builder's design and choice of solutions.

It follows from NS 8407 paragraph 25.1.1, second paragraph letter a that the general contractor must examine whether the builder's solutions, etc. “are incomplete, contain inconsistencies or other weaknesses”.

If the general contractor discovers defects, discrepancies, etc., he is obliged to notify the builder. Such notification must be sent “without undue residence”, it must be in writing and the start of the deadline is the time at which he either discovered or when he should have uncovered the relationship, cf NS 8407 paragraph 25.1.2, first paragraph.

Sanctions have been linked to non-notification in turnkey contracts.

Namely, the builder may demand compensation for any loss he incurs as a result of failure to notify, cf. NS 8407 paragraph 25.1.2, second paragraph.

By the way, it is clear from the provision that the duty to investigate must be fulfilled “in good time before the relevant information (...) is to be used”.

In other words, there is no requirement that the general contractor reviews all the engineering immediately after, for example, the conclusion of a contract. The surveys can be carried out sequentially as the production progresses and the general contractor must implement his detailed engineering to keep pace with his own execution. The only requirement is that the investigations be carried out “well before” It must be used.

Finally, it is mentioned that if the general contractor discovers errors in the builder's design and notifies about this, it may result in the general contractor being entitled to demand remuneration adjustment and/ or deadline extension if there is a factual basis for it.

The same applies if the developer orders the general contractor to stick to what the builder has designed.

As for execution contracts, such requirements must be notified in accordance with the rules on change orders, including irregular changes.

We refer in this regard to NS 8407 paragraph 25.1.2, last paragraph.

4. In particular on the agreed risk transition in turnkey contracts

Above, we discussed the situation that defects in the contract object are discovered after the works have been completed, and then there is a discussion of whether the error originated in the builder's prior design or in the general contractor's detailed design, if any.

In many cases, the parties (at least the builder) want to avoid this problem by letting the general contractor take over the risk of the builder's design.

There are provisions for this in NS 8407 paragraph 24.2 “Agreed risk transition”.

It follows from NS 8407 paragraph 24.2.1 “The Risk Transition” that such an agreement has the consequence that the general contractor “has the risk as if he had designed or chosen the solutions himself”.

From this, an exception is made for the case that the general contractor “based on incorrect information (...) received from the builder or government agencies”, see NS 8407 paragraph 24.2.1, second paragraph.

In such cases, the risk is not assumed unless the general contractor should have discovered the error during his review of the design.

It follows further from NS 8407 paragraph 24.2.2 “Control, notification and response” that the general contractor shall control all the engineering for which he assumes the risk. This check shall be carried out within five weeks from the conclusion of the contract unless another deadline has been agreed.

In our view, the builder should rather give a longer than shorter deadline to this check.

If the inspection reveals conditions such as “will not lead to the fulfillment of” the agreed requirements does it impose on the general contractor an obligation to notify the builder before the expiry of the deadline.

As long as notice is given within the deadline, the general contractor does not assume the risk of the relevant conditions.

After the builder has received such notice, he must respond “without undue residence”.

If the builder maintains his designed solution, the general contractor does not assume the risk. Alternatively, the builder changes his opinion and follows the general contractor's advice. In this case, there will normally be a change where a change order is issued, and then the general contractor notifies the general contractor of the consequences this will have on the project (deadline extension and/ or remuneration adjustment).