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Definitions vs. Controversy in Ship Repair and Construction – Which Do You Prefer? (Part 2 of 2)

If you haven’t done so, be sure to check out Part 1 of this article.  Here are some more examples and lessons learned in regards to definitions vs. controversy:

  • Generator Load Test: A specification called for the replacement of a SSDG, with testing after to confirm proper operation and controls. The means and extent of testing were not defined. After installation, the shipyard sought to test the SSDG using ship’s equipment for the electrical load. The vessel’s chief engineer as well as the port engineer would not allow that; they expected that the shipyard would use a test load bank instead. The shipyard pointed out that because the specification did not mention a load bank, the rental of one was not included in the bid. This problem involving both cost and delay would have been avoidable if the means of the test was defined. This was another opportunity for the ship owner to appreciate that the contractor would select a least-cost solution unless the specification clearly required otherwise.
  • What is New? A shipbuilder committed to constructing several new vessels, each of which was to include an item of special equipment. The vessels were produced, including the items of special equipment; but the vessel owner complained that those items were not new. The shipbuilder pointed out that the items were new, as evidenced by the fact that they had never been used, never installed on any other vessel, and had arrived at the shipyard in their original packing crates. The problem, as perceived by the owner, was that they were manufactured over 20 years earlier, but had never been sold by the supplier, only warehoused. To exclude the possibility of such event recurring, an owner can specify that all materials and equipment being usedshall be new and manufactured not more than [number] years prior to installation.”
  • Interpretation of Rules: Some ship owners want to benefit from having their new vessel constructed to the standards of a classification organization, but they do not wish to pay the organization’s fees that are incurred in granting the vessel classification status. In those instances, the construction specification states something like, All workmanship accomplished and all materials and equipment supplied and incorporated into the vessel shall conform to the classification rules of the [name of classification organization].”
    Without the direct involvement of the classification organization, the debate that ensues centers on whose interpretation of those rules will apply: the shipyard or the owner? This form of dispute is completely predictable when an owner attempts to get something for nothing. Even if the owner does not intend to maintain the vessel in class after delivery, there is nothing barring the construction and delivery of it in class, as determined by the classification organization. This assures a certain level of design, workmanship and material selection consistent with classification rules, but requires that the classification organization be duly involved during construction and delivery. Simply, there is no short cut to obtaining the benefits of classification.
  • Ambiguous Specifications (Oxymoron): Grammatically, the phrase “ambiguous specifications” is an oxymoron because the components of the phrase are inconsistent. Something that is specific cannot concurrently be ambiguous. Yet, numerous repair, conversion and construction specifications have been ambiguous, causing disputes, costly ‘fixes’ and substantial delays to completions of the projects. Some ship owner’s representatives express the attitude, “I know what that specification means because I wrote it.” This, of course, does not alter the fact that the specification as written is ambiguous; it simply confirms that it has to be interpreted. The shipyard already knew that and planned to achieve its interpretation of the specification using a least cost solution. The remedy at that point, if essential to the owner, is a costly and perhaps project-delaying change order.
  • Specification Quality Assurance: For major shipbuilding and offshore construction and conversion projects, significant contract price growth can be minimized by subjecting the proposed contract specifications and drawings to an independent quality assurance review process. A thorough review of proposed contract documents should be undertaken to identify ambiguities, incomplete items, and inconsistencies in order to assure a less-troublesome contractual relationship than may otherwise develop.


Definitions vs. Controversy in Ship Repair and Construction – Which Do You Prefer? (Part 1 of 2)

The question in the title of this article is, of course, almost nonsensical. Given an opportunity to choose between definitions or controversy, professionals in the marine industry would chose definitions over controversy. Examination of many ship repair, conversion and construction specifications leads to the observation that, perhaps inadvertently, controversy has been selected instead. Here are some examples and lessons learned.
  • Electronically Transmitted Drawings: A shipyard commenced construction of large vessel. It also arranged with the vessel purchaser’s staff to receive electronically the entire set of contract drawings. From these drawings, the shipyard would proceed to develop the design details as needed for construction. The drawings were received electronically, but not as a CAD files, which could be utilized by the shipyard. The drawings were PDF files, which are essentially just ‘pictures’, not files that can be altered. Those ‘electronic’ files were no more useful than if the shipyard had received paper printed drawings. Lesson learned: Define ‘electronic’ with greater precision so there is no misunderstanding about the form that the information will be transmitted and received.
  • Renew: Due to grounding in a channel, the rudder of a ship was damaged. The repair specification called for the shipyard to “renew” the rudder. What is meant by “renew”? The ship owner’s representative rejected the shipyard’s repair of the rudder, stating that “renew” meant to build a new one. In contrast, the shipyard said renew meant to make the old one like new by repairing it, making new only the damaged portions. Perhaps the ship owner’s idea would have been better expressed by stating that the shipyard was to “replace the rudder with one of all new materials.”
  • Pressure Test of Hydraulic Piping: The specifications called for a pressure test to confirm the integrity of joints in a hydraulic piping system. However, that specification did not define the nature and type of test. A dispute arose about what medium to use to create the pressure: air, water or hydraulic oil. A naïve owner’s representative argued that hydraulic oil should have been used. The shipyard pointed out that if there was any leak, it would be detected by seeing oil spray onto nearby fittings and equipment (hopefully without a resultant fire). If water was used for pressure tests, contamination of the subsequently-used hydraulic oil may result. Perhaps a combination of air test (with soap solution on the exterior of joints) followed by an oil pressure test may be the preferred solution. Other possibilities exist, too. More to the point, a specification requiring tests should state the testing mechanism. Otherwise it can be expected that a contractor will select the least-cost solution for the test.
  • Generator Load Test: A specification called for the replacement of a ships service diesel generator, with subsequent testing to confirm proper operation and controls. The means and extent of testing were not defined. After installation, the shipyard sought to test the SSDG using ship’s equipment for the electrical load. The vessel’s chief engineer as well as the port engineer would not allow that; they expected that the shipyard would use a test load bank instead. The shipyard pointed out that because the specification did not mention a load bank, the rental of one was not included in the bid. This problem involving both cost and delay would have been avoidable if the means of the test was defined. Again, this was an opportunity for the ship owner to appreciate that the contractor would select a least-cost solution unless the specification clearly required otherwise.

To read more, see Part 2 of this article.