Novation Case Study no.4

A project where the design team worked very closely with an employer for a number of years. Although this was not their first project together, it was considerably larger than any previous undertaking. In view of their good working relationship, the consultant was involved in the process from the very beginning, assisting the employer with his initial developmental designs and helping him to secure funding for the project.

Griffiths & Armour
20 September 2014

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The client chose a design and build procurement route and appointed a contractor to whom the design team was then novated. As the novation had taken place well ahead of the detailed design stage there was still a large amount of design work to complete and this is where the problems began.

Perhaps because the original employer was unused to larger projects, they acted as if novation had never taken place.

Despite the new contractual ‘framework’, which should have seen only the contractor issuing instructions, the original employer sought to influence the design development process by issuing numerous instructions and change requests directly to the design team. Maybe the employer could be forgiven this; the project was a significant one; his relationship with the contractor was new whereas he had spent many years working with his design team. On the side of the design team too, there must have been a strong bond with one of their larger clients. Psychologically, many in the design team still viewed the original employer as their client and they continued to respond to the employer's demands. 

Outcome

Unfortunately, the outcome is that there was a significant delay to the project and a large overspend, a proportion of which must flow from the employer driven changes and much of which the contractor may now be able to recover from the design team.

This is a classic case of the relationships and lines of responsibility becoming blurred following a novation. In retrospect, the consultant should perhaps have discussed the principles of novation with the employer as soon as it became clear that the employer was looking to adopt this approach. It should have been made clear that the consultant would be unable to advise the employer on aspects of the design following novation. For a client seeking control over design development, design and build procurement with novation is an entirely inappropriate procurement route.