The Engineer is neutral for one sub-clause.

The Engineer is neutral for one sub-clause

Two weeks running, the answer has ended in the same place. The notice goes to the Engineer. The ambiguity is clarified by the Engineer. In Week 1 it was the Engineer's fourteen days of silence that saved a late notice.

So it is worth asking who this person actually is, and the answer starts uncomfortably. Sub-clause 3.1 says the Employer appoints the Engineer. The Employer pays the Engineer. And sub-clause 3.2 says that in carrying out the duties, the Engineer acts as a skilled professional and is deemed to act for the Employer.

That isn't a criticism of anybody. It is written down. The Engineer is the employer's agent, and the contract says so in the second sub-clause of the section.

Then comes 3.7, and the role changes.

The sentence that switches the role

Sub-clause 3.7 Agreement or Determination is the machinery for deciding a matter or a claim between the two parties. It opens by saying that when carrying out duties under that sub-clause, the Engineer acts neutrally between the parties and is not deemed to act for the Employer.

One sentence, and the agency is switched off for the length of a determination. It has to be. You can't ask somebody to decide a dispute between two parties while formally acting for one of them.

But read the boundary carefully, because it is narrow. Outside 3.7 the default in 3.2 applies again. The person reviewing your programme, inspecting your work and certifying your payment is the employer's agent. The same person deciding your claim is not. Knowing which conversation you are in tells you what to send and what to expect back.

Under Silver there is no Engineer at all. The Employer's Representative runs the equivalent machinery, and the word neutrally doesn't appear anywhere in the book. The duty is to determine fairly, and that is a different and thinner thing.

The limits are in a document you have not read

Sub-clause 3.2 also does something Week 2 should make you suspicious about. It says the Engineer may exercise the authority the contract gives, and then adds that if the Employer's consent is needed first for some specified authority, the requirements for that are set out in the Particular Conditions.

So the Engineer's real authority is not fully described in the book you own. Part of it lives in a higher-ranked document, and on many jobs it is a short list: values above which a variation needs approval, extensions beyond a certain length, and so on. Contractors negotiate for months with somebody who has been told to obtain permission before agreeing anything, and never think to look up where that line sits.

Two protections come with it. There is no requirement for the Engineer to get consent before acting under 3.7, so the determination machinery cannot be constrained that way, and the Employer is not permitted to impose further constraints beyond what the Particular Conditions state. And where consent was required but the Engineer acted anyway, the contract deems that consent to have been given. If the Engineer exceeded what the Employer allowed, that is a problem between them. You can rely on the act.

Forty-two days to agree, before anybody decides

Most people think of 3.7 as the clause where the Engineer rules on your claim. That is the second half of it.

The first stage is consultation. The Engineer has to consult both parties, jointly or separately, and actively encourage them to reach agreement. The clock is forty-two days, and if agreement is reached the Engineer issues a notice of it, signed by both parties.

This stage is quietly the most valuable part of the whole procedure and the part contractors most often sit out. An agreement reached here is cheap, quick and it doesn't require anybody to be wrong in writing. A determination, by contrast, produces a winner, a loser and a document that follows the job to the end.

Turn up to the consultation with your records. Week 1 made the point that contemporary records are made at the time or not at all — this is the meeting where they earn their keep.

A fair determination, with reasons

If no agreement is reached, the Engineer determines the matter. The contract sets out what that has to look like, and the requirements are more demanding than most determinations that actually arrive.

The decision has to be a fair one, reached under the contract, with proper weight given to everything relevant. The notice carrying it has to identify itself as the Engineer's determination — the same labelling discipline sub-clause 1.3 imposed on notices in Week 1. And it cannot be a bare answer: the contract requires the decision to be set out at length, with the reasoning behind it and the particulars that support it.

That last requirement is a tool, and it is under-used. A one-line rejection is not a determination in the form the contract requires. You are entitled to the reasoning, and you need it — because the next step is deciding whether to challenge it, and you can't sensibly do that against a decision whose basis you haven't been told.

Twenty-eight days to disagree, or it is yours

Here is the part that catches people, and it is the mirror image of Week 1.

If either party is dissatisfied with a determination, that party may give a Notice of Dissatisfaction to the other, copied to the Engineer, within twenty-eight days of receiving the determination. It has to say what it is, and it has to set out the reasons. After that, the matter can go to the DAAB.

If nobody gives one inside those twenty-eight days, the determination is deemed to have been accepted by both parties and becomes final and binding on them.

Not arguable later. Not revisited at the final account. A decision you disliked, said nothing about for a month, and thereby accepted.

There is a matching trap on the other side. If the Engineer lets the time limit for determination pass without issuing one, then on a claim the contract deems a determination to have been given rejecting it — and your twenty-eight days start running from the expiry of that limit. Nobody writes to tell you the clock's started.

Practical insight

Three things to set up, and none of them takes long.

First, put a diary entry against every determination the moment it lands, dated twenty-eight days out, and treat it as a hard stop rather than a target. The Notice of Dissatisfaction is cheap and preserves everything. Deciding not to send one should be a decision somebody makes on purpose, not something that happens while people are busy.

Second, do the same for the determination time limit on any claim you have running. If the date passes in silence, a rejection has been deemed and your window has already opened.

Third, take the consultation stage seriously. When the Engineer calls the parties together under 3.7.1, that is not a preliminary meeting before the real decision — it is the cheapest chance you will get. Bring the contemporary records, bring the clause, and bring a number you are prepared to accept.

And when you write, know which role you are writing to. A letter arguing your commercial case is aimed at the employer's agent. A submission asking for a determination is aimed at somebody the contract has just told to be neutral. They are not the same document.

Key takeaways

✔ Sub-clause 3.1 has the Employer appoint and pay the Engineer, and 3.2 deems the Engineer to act for the Employer.

✔ Sub-clause 3.7.1 switches that off: inside a determination the Engineer acts neutrally and is not deemed to act for the Employer. The neutrality is real, and it is confined to that sub-clause.

✔ Under Silver there is no Engineer and no neutrality wording. The Employer's Representative determines, with a duty to be fair.

✔ The first stage of 3.7 is consultation with a forty-two day limit. An agreement there is cheaper than any determination that follows it.

✔ A determination must be fair, made under the contract, and issued with reasons and detailed supporting particulars. A one-line answer does not meet that.

✔ A Notice of Dissatisfaction runs for twenty-eight days. Miss it and the determination is deemed accepted, and becomes final and binding.

✔ If the Engineer misses the determination time limit on a claim, a rejection is deemed — and your twenty-eight days start from that expiry, with no letter to warn you.

What's coming next

Everything so far has assumed a lump sum contract: a price agreed at the start, and an argument whenever something moves away from it. That assumption is doing more work than it looks. Change the pricing model and the questions change with it — on a cost-plus contract your actual cost is the invoice, so control becomes proof; on a target cost contract the contingency stops being yours and becomes a pot both sides share. Next week we look at what the four common pricing models do to cost control, and why Cost & Cash Week 1 asked the hardest question in this whole site under only one of them.