FERGUSON MARINE AND ENGINEERING LTD CONSTRUCTION OF HULL 801 Claim for Additional Payment HKA 3200 DARESBURY PARK CDA-03801.00 / December 2018 WARRINGTON WA4 4BU PLEASE NOTE: This is Part 2 of a submission in two parts with Part 1 comprising Sections 1 to 3 and associated annexes and appendices and Part 2 comprising Section 4. FERGUSON MARINE ENGINEERING LTD Claim for Additional Payment Hull 801 CONTENTS PART 1 - EXECUTIVE SUMMARY ................................................................................... 1 Reservation of rights ................................................................................................................................................... 2 PART 2 - INTRODUCTION AND OVERVIEW .................................................................. 3 Introduction ...................................................................................................................................................................... 3 The Contract and the Parties ................................................................................................................................. 4 This claim ............................................................................................................................................................................ 4 Terminology ...................................................................................................................................................................... 5 Reservation of rights ................................................................................................................................................... 5 FMEL’s design obligations ....................................................................................................................................... 5 The tender process and the adequacy of the conceptual design ................................................... 6 Design challenges acknowledged by CMAL .............................................................................................. 14 Interference in the design process by CMAL ............................................................................................ 14 Modifications and changes accepted in principle by CMAL .............................................................16 Changes in the sequence of works ..................................................................................................................19 CMAL’s stated position on delays and additional cost......................................................................... 21 Conclusion ...................................................................................................................................................................... 23 PART 3 – DELAY AND DISRUPTION ............................................................................ 24 GENERAL APPROACH TO ASSESSMENT OF DELAY ................................................ 24 Introduction ................................................................................................................................................................... 24 The baseline programme ....................................................................................................................................... 24 As built dates................................................................................................................................................................. 25 The method of delay analysis ............................................................................................................................. 26 WINDOW 1: 16 OCTOBER 2015 TO 27 APRIL 2016 ................................................... 29 Introduction ................................................................................................................................................................... 29 The 27 April 2016 meeting between CMAL and FMEL ...................................................................... 29 Draft Contract Addendum 3 ................................................................................................................................. 31 Conclusion ...................................................................................................................................................................... 32 WINDOW 2: 27 APRIL 2016 TO 21 NOVEMBER 2017 ................................................ 33 Introduction ................................................................................................................................................................... 33 The critical path in window 2 ............................................................................................................................... 34 The position at 27 April 2016 .............................................................................................................................. 35 Delays arising from finalizing the propeller design by CMAL .......................................................... 36 Delays arising from tank tests and further design amendments ................................................. 44 Summary of critical delay in window 2 .......................................................................................................... 53 WINDOW 3: 21 NOVEMBER 2017 TO 21 JUNE 2019 .................................................. 54 Introduction ................................................................................................................................................................... 54 The critical path in window 3 ............................................................................................................................... 54 Delays to outfitting .................................................................................................................................................... 57 Assessment of delay to the outfitting ........................................................................................................... 59 SUMMARY OF DELAYS ................................................................................................ 62 i 19 December 2018 CDA-03801.00 FERGUSON MARINE ENGINEERING LTD Claim for Additional Payment Hull 801 HULL 802 DELAYS ........................................................................................................ 63 Introduction ................................................................................................................................................................... 63 The planned construction methodology ...................................................................................................... 63 Change in sequence of working ........................................................................................................................ 65 Were FMEL’s mitigation measures reasonable ? ................................................................................... 66 Assessment of delay ................................................................................................................................................68 Contractual/legal basis of claim ........................................................................................................................ 70 DISRUPTION .................................................................................................................. 71 Introduction .................................................................................................................................................................... 71 Outfitting ......................................................................................................................................................................... 72 Causes of disruption ................................................................................................................................................. 78 Consequences of outfitting after block fabrication ........................................................................... 102 PART 4 - MONETARY CLAIMS................................................................................... 107 Introduction ................................................................................................................................................................ 107 Delay (prolongation ) costs ................................................................................................................................ 109 Disruption costs – outfitting and block fabrication ............................................................................. 115 Disruption Costs - design ..................................................................................................................................... 117 Disruption Costs – procurement ..................................................................................................................... 118 Disruption – other elements of the work .................................................................................................... 121 Variations to the Contract (VTC’s) agreed in principle by CMAL ................................................ 125 Modifications or changes pending agreement by CMAL ................................................................ 126 Claims from subcontractors and suppliers ............................................................................................