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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.

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