Failing is priced, and then deemed passed.

Everything has changed hands

Start with who does the work, because it is no longer you.

The employer carries out these tests. The employer also supplies what they need — power, water, fuel, consumables, instruments, materials, and staff qualified to run them — which is a substantial obligation and one they may not have resourced.

That last point isn't a debating position. A plant that can't be tested because the employer hasn't got operators trained on it is a plant that isn't being tested, and the consequences of that run in a direction the next two sections set out.

They run them against the employer's requirements, against the operation and maintenance manuals that cleared their review, and against whatever guidance the contractor is required to give while the tests are under way. So the manuals from week 29 stop being a handover condition and become the operating instructions for the test itself.

Which is the sharpest argument for writing them properly that anybody will ever give you. A manual that was assembled to clear a review gets used, two years later, to operate the plant during the test that decides what you are paid.

And the notice runs the other way: the Engineer tells the contractor when and where, at least three weeks ahead, with a programme showing the timing of each test.

Attend, or be deemed to have agreed

The deeming from week 30 reappears, pointing the same direction it did there.

If the contractor isn't at the stated time and place, the employer may go ahead. The tests count as having been carried out in the contractor's presence, and the contractor is treated as having accepted the readings as accurate.

Which is the whole argument for attending a test you aren't running, on an asset you no longer control, about numbers you will be paying against. Three weeks of notice is generous; the consequence of not using it is that the figures setting your liability were read by somebody else.

And attendance buys more than a witness. The guidance obligation means your people are expected to be answering questions while the test runs, which is the only point at which a reading can be challenged as it is taken rather than disputed after it is recorded.

Running out of time is a pass

Here is the provision that surprises people, and it points in the contractor's favour.

Where a test can't be completed inside the defects period — for reasons not attributable to the contractor — the works are deemed to have passed it.

Read that against the practical position. These tests need an operating plant, a load, a season, feedstock, a market. Any of those failing to arrive is a reason the test can't run, and none of them is the contractor's doing. So the clock running out on a plant the employer couldn't get into a testable state produces a pass rather than a suspended liability.

The qualification carries the weight, and it is where the argument will be. Reasons not attributable to the contractor is a phrase that has to be applied to a particular postponement on a particular date, and the two parties will describe the same postponement differently a year later.

Which makes the length of the defects period, and the reason for each postponement, worth recording carefully as they happen.

Their delay costs them

The asymmetry of week 30 inverts here as well.

Unreasonable delay by the employer in carrying out these tests entitles the contractor to the cost of that delay, plus profit. Not an extension of time — money, because time has stopped being the currency by this stage of the project.

It's worth noticing what that combination does. Employer delay costs the employer money, and if it runs long enough it produces a deemed pass. Both mechanisms around delay point the same way, which is unusual, and worth knowing before you accept a postponement gracefully.

None of which is an argument for being difficult about scheduling. It is an argument for recording, each time, whose reason the postponement was — because the same courtesy looks entirely different in a schedule of dates and reasons than it does in a memory.

It also changes what a postponement is worth discussing. Agreeing to move a test is a commercial act with a price attached, and treating it as a scheduling courtesy gives away the price without noticing that there was one.

What performance damages actually are

Performance damages are a price on a shortfall, and the price was set at tender.

They sit in a schedule of performance guarantees: what the works are to achieve, and what each unit of underperformance is worth. Somebody built that table during the fortnight in week 7, alongside the rest of the tender, weighing commercial exposure rather than what the plant would eventually do.

Three years later that table decides an engineering question. Faced with a shortfall, the choice is to modify the works or to pay — and the contractor may propose adjustments by notice. Which of those is right depends on the cost of the modification against the damages, and the damages figure has been sitting in a schedule nobody has read since award.

So the decision is available, arithmetically, before the test happens. Nothing in the process asks for that arithmetic, which is why it gets done afterwards if at all. It is an afternoon's work.

One more thing about that table. It was priced as an exposure, so its figures were chosen to be survivable rather than to reflect what a shortfall would actually cost an operator. Which means the arithmetic can point at paying even where the plant will underperform for thirty years, and the contract is content with that.

System design

Rows one and two are halves of one decision and neither has a home in any standard reporting pack. The damages side has been sitting in the contract since award; the modification side takes a call to the vendor. Together they answer a question that otherwise gets answered under pressure, in a week when the plant is running badly.

Record	Produced by	Required quality	Verified against	Feeds
Guarantees as a cost per unit	You, before the first test	Damages per unit of shortfall, worked out in advance	The schedule as executed	Whether to modify or to pay
Modification cost per gap	You, with the vendor	What closing a given shortfall would actually cost	A quotation, not an estimate	The other half of the same choice
Notice of each test	The Engineer, three weeks ahead	Date, place and the programme for each test	The requirements they test	Whether you can attend
Readings and attendance	Whoever ran the test	Who took each reading, since absence is deemed attendance	The instruments used	Your liability under the guarantees
Postponements	You, one line each	Date and the reason in the words the employer used	Nothing — a contemporaneous note	Whether a deemed pass is available

Row five is the fourth entry in this dictionary verified against nothing. A postponement and its stated reason is a primary record, and whether the end of the period produces a pass or a liability is decided from the list of them.

Practical insight

Read your schedule of performance guarantees before the first test, and turn it into a cost per unit of shortfall.

One line per guaranteed parameter: what the works must achieve, what your damages are for missing it, and what a modification to close a given gap would cost you. Three columns, and your third one takes a conversation with the vendor rather than a calculation.

With your page in front of you, a disappointing reading becomes a decision rather than an emergency. Below a certain shortfall, paying costs you less than modifying and the contract treats your payment as a pass. Above it, modifying is worth doing and you have a notice to give.

Then keep a second, shorter record: every time a test is postponed, the date and the reason, in the words the employer used. If the tests eventually run out of defects period, whether that gives you a deemed pass turns entirely on whether the reasons were attributable to you — and that gets decided from a list of postponements which exists only because somebody kept it.

Key takeaways

• Where performance damages are set out, failing entitles the employer to those damages in full satisfaction of the failure.
• Once they are paid, the works are treated as having passed, so failure has been converted into a transaction.
• The employer carries out these tests and supplies the power, fuel, instruments, materials and qualified staff for them.
• They are run against the employer’s requirements, the manuals that cleared review, and guidance the contractor gives during the tests.
• The Engineer gives at least three weeks’ notice of date and place, with a programme for each test.
• A contractor who doesn't attend is deemed present and treated as having accepted the readings as accurate.
• A test that can't be completed inside the defects period, for reasons not attributable to the contractor, is deemed to have been passed.
• These tests need an operating plant, a load and a feedstock, so postponement has many causes and few of them are the contractor’s.
• Unreasonable employer delay entitles the contractor to that cost plus profit, in money rather than in time.
• Performance damages are a price on a shortfall, set in a schedule built during the tender fortnight.
• So a shortfall is an arithmetic choice between modifying and paying, and the arithmetic is available before the test runs.

Records born here. The schedule of performance guarantees, converted to a cost per unit of shortfall · the modification cost to close each gap · the Engineer’s notice of each test, with its programme · who attended · the readings, and who took them · every postponement with its date and stated reason · any notice proposing adjustments.

What is coming next

Both families of test run inside a period that has been named in this phase a dozen times without being examined.

It has a length, a start that may differ per part, an extension mechanism when something is put right, and an end that arrives whether or not anybody marks it. What comes next is that period: what it obliges, what it costs to serve, and the certificate that closes it.