Do not trust me: reliance of data in EPCs

EPC contracts frequently include a clause on the reliance of data. It has several formulations, but it usually looks something like this:

“Employer-Provided Information has been made available for reference only.

The Employer makes no warranty as to the accuracy, completeness and reliability of any information, data, statement in the Employer-Provided Information.”

The objective is clear – avoiding claims during construction if the data is wrong. In the most extreme cases even information critical to price a project (like for instance a geotechnical survey) should be considered as a “not rely upon” data.

How did we get to this point?

To give some context, the theory is that standard EPC contracts like the Silver FIDIC explicitly request to the subcontractor to study the Employer’s Requirements to find errors and omissions.

This is usually written in this way (you can find an example with the full text for instance in chapter 5 of the standard Silver FIDIC contact):

"The Contractor shall be deemed to have scrutinised, prior to the Base Date, the Employer’s Requirements (including design criteria and calculations, if any)."

But there are exceptions - in an effort to create a reasonable contract, although not as balances as the FIDIC Red or Yellow, the authors of the clause add:

"However, the Employer shall be responsible for the correctness of the following portions of the Employer’s Requirements and of the following data and information provided by (or on behalf of) the Employer:

(a) portions, data and information which are stated in the Contract as being immutable or the responsibility of the Employer;

(...)

(d) portions, data and information which cannot be verified by the Contractor, except as otherwise stated in the Contract."

In an effort to unload risks and responsibilities, Employers try to avoid being accountable for ALL information provided during the tender. Basically, the bidder cannot trust the tender documentation and should double check.

Unfortunately, in many situations bidders cannot verify independently the information provided. For instance to confirm the results of a geotechnical survey for a wind farm a bidder would have to invest thousands of dollars and one or two months of time to make a new set of boreholes and trial pits.

This is clearly unrealistic and unreasonable. Such clause, if stretched to the extreme, can have as a result extremely high prices (as the bidder will have to foresee the worst case scenario) or few bidders (as they will simply decline to bid).

I also suspect that in some situation the Employer decide not to circulate available information, probably following some twisted logic.

All in all I strongly believe that it would be in the interest of the Employer to avoid using the “not to be relied upon” clause on information like wind data, geotechnical survey, grid connection info, topographical survey, etc.

This entry was posted in Legal by Francesco Miceli. Bookmark the permalink.

About Francesco Miceli

Hello! My name is Francesco and I'm a civil engineer specialized in EPC (that is, "turnkey") wind farms projects. I'm currently based in Hamburg, Germany and I'm developing several interesting project all around the world - southern Europe, LATAM and various other countries. If you want to contact me please don't leave a comment in the blog (I don't check them very often) - you can use the contact form. You can write me in English, Spanish and Italian. To find a (somewhat concise) description of my non-wind business activities you can visit my webpage - www.francescomiceli.com If you want to know more about my work, here you can download my CV - www.windfarmbop.com/CV_Francesco_Miceli.pdf Hope you like the blog! Francesco

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