3.10 With early knowledge that construction problems were occurring, the Department decided that, where it could, it would refrain, during construction of the new facilities, from issuing variations to the specification to accommodate changes in scientific research. By taking this line, the Department intended to avoid giving Laser and/or JLC Ltd opportunities:
■ To attribute output failures and project delays to variations, without having to prove that the original designs could have met the original specification requirements.
■ To demand payment for plant that would never have met the specification but, because of variations, would never be tested.
3.11 Departments have to be cautious about adopting such an approach. If a department identifies a genuine need to change the specification before the contractor has constructed the relevant element, ordering the change at this time should reduce the cost of the variation because the contractor can pass on savings from avoiding abortive work. The decision to withhold issuing variations to the output specification, however, was, in the circumstances of the NPL PFI contract, a prudent one, because the Department avoided inadvertently taking back risks it had transferred to Laser.
3.12 Acting on legal advice, the Department adopted a more contractual position in its correspondence with Laser. Previously, the Department had included clear statements that information was provided on the basis that it did not prejudice the Department's rights under the contract. The legal advice in June 2003, however, recommended that the Department also needed to emphasise the actual graveness of the contractual situation from the Department's perspective to avoid a possible future judge or adjudicator concluding that the delays were of little commercial consequence.