Fisher Maritime's Fairleads

'Lessons Learned' Strategies & Ideas for the Marine Industry

Owner’s Pre-Contract Responsibilities

When a vessel owner contracts with a shipyard for vessel conversion or new construction, there is an underlying legally binding representation being made by the owner. Namely, the owner is representing that, in the technical package prepared by the owner, all the elements and components of the package are completely compatible with one another. That is, the shipyard can rely on the representation that all the bits and pieces of the owner’s technical package are consistent with all the other bits and pieces.

When it is discovered that such implied representation has not been fully achieved, the cost and schedule consequences of correcting that incompatibility are the owner’s responsibility. The following examples illustrate this principle.

HVAC and Deck Heights

A government agency was having a RO-RO vessel converted to a 400-person training ship, requiring (among many other alterations) a forward extension of the deckhouse over the weather deck using the same 2.6m deck heights as in the existing deckhouse. The shipyard’s design of the HVAC system had to achieve compliance with the performance specification within the owner’s technical package. The HVAC system design was completed after substantial completion of the new deckhouse structure. However, it was determined that the duct design satisfying the performance specification could not fit within the 2.6m deck height. The ducts were too large to penetrate through the deck beams, and if placed below the beams, interfered with adequate headroom for crew and passengers. The shipyard stated that the necessary fix was to increase the deck height of the first deck by 30 cm.

Initially the owner’s team alleged that, because the shipyard was responsible for the HVAC design, it was also responsible for the incompatibility of the duct sizes with the owner’s deckhouse structural design. After the shipyard challenged the owner to identify a smaller HVAC duct design that satisfied the performance requirement, the owner relented. The owner paid for the deckhouse extension to be raised sufficient to incorporate the minimum size ducts that satisfied the owner’s performance requirements. The fundamental problem was that the deck heights and the HVAC performance requirements, both part of the owner’s technical package, were incompatible with one another.

Replacement Fan Foundations

A cruise ship owner’s technical package required a shipyard to replace 14 fans in the ventilation system with new ones having the same brand name and model number as previously installed. When the shipyard sought to purchase the fans from the manufacturer, it was learned that the former model fan was no longer produced; a different model would have to be purchased. The owner’s team consented. When the replacement fans arrived, it was discovered that the foundations required for the replacement fans were not the same as the existing ones. The shipyard claimed that the owner had to pay for the extra work to modify the fan foundations because it could not have known, when bidding the job, that such work would be required.

Initially, the owner’s team argued that the shipyard should have checked with the fan manufacturer prior to bidding the job. In response, the shipyard pointed out that the owner’s team had the opportunity to do so before completing the technical package. The owner’s team conceded. The fundamental problem was that the owner’s technical package required the impossible; it assumed that certain fans would be available, but in fact were no longer being manufactured.

Lessons Learned

These examples, as well as many others that could be cited, serve to remind all participants in ship construction and conversion projects that significant professional efforts have to be completed before an owner’s technical package is presented to bidding shipyards. Ship owner’s representatives must remain mindful to ensure, during preparation of the owner’s technical package for ship construction and conversion, that each element of information and requirements within the package is wholly compatible with all the others.