FIDIC claims in DBOM sewage contracts: notice, records, quantum

A design-build-operate-and-maintain sewage contract is two contracts wearing one cover: a construction contract that ends at taking-over, and a performance contract that then runs for ten or twenty years. Most of the disputes I am appointed on live at the seam between them — where a plant that passed its tests meets influent, power quality or sludge markets that the design basis never quite described.

Where the claims come from

The construction-phase claims are the familiar FIDIC family: late access, unforeseeable ground conditions (micro-tunnelling is a reliable generator), employer’s variations, and delayed approvals. The DBOM-specific claims are more interesting and harder: influent outside the design envelope — stronger, more saline, more septic than the tender data said; power interruptions the availability guarantees never contemplated; and performance tests failed for reasons each party locates in the other’s scope.¹

The design basis is the contract. If the influent table was wrong, the question is only ever who warranted it.

Under the FIDIC forms the machinery is unforgiving. Clause 20 requires notice within 28 days of the event or circumstance becoming known; miss it and entitlement can be lost regardless of merit. Tribunals differ on how strictly to apply time-bars, but no contractor should plan on charity, and no employer should assume a late notice is fatal without advice.

The records decide

As an expert I can work with imperfect records; I cannot work with absent ones. The cases that settle well are the ones where somebody kept the boring documents:

• Influent and effluent quality data, continuously, from commissioning onward — with the sampling method stated. Composite and grab samples are not interchangeable in a performance dispute.
• Power event logs and generator run-hours, tied to plant SCADA time.
• Daily diaries at the works: what ran, what was bypassed, who was told.
• The design basis itself, as amended — not the tender version everyone remembers.
• Correspondence issued at the time. A notice drafted two years later is a confession with a date problem.

Quantum: cost, not grievance

Quantum in these disputes divides into prolongation and thickening on the construction side, and loss of availability payments, excess operating cost — power, chemicals, sludge disposal — and retrofit capital on the operating side. The credible claims are built bottom-up from records: metered kilowatt-hours, weighbridge tickets, invoices. The incredible ones are built top-down from the difference between what the contractor hoped and what happened. Tribunals can tell.²

A closing observation for employers. The cheapest dispute is the one designed out at tender: warrant the influent data or say plainly that it is not warranted; make the performance test method statement a contract document, not a commissioning-phase negotiation; and resist the temptation to pass every operating risk to the contractor — a risk priced blind is a claim deferred, with interest.