Vendor does include PWHT in proposal and later on asking for additional price

[10815L]

Hi,
Regarding to the subject, during clarification vendor suggested PWHT is not required and not included in the scope of work and vendor quoted the price to win the contract but later on client is compling the vendor for PWHT due to sour service.
Vendor is delaying in project delivery also.
Can any one have exeprience like this problems and how to deal with vendor, addition to this client offer to vendor for future business but vendor is not coming to solution.
Thanks
10815l

 

[micalbrch]

This is an engineering platform. None of us is a lawyer. Keep that in mind.

When the vendor wins the contract with his offer and later the client requires more than what was offered (and accepted because PO was given), I think the client has to pay for it. He wants it. The vendor offered without and clearly stated why. He won the contract and got the PO. Somebody hopefully checked the offer and accepted it.

 

[MJCronin]

A better place for this issue may be the "Boiler and Pressure Vessel Forum"....

 

[rotw]

What seems not very serious from the OP side, is that he is evoking many independent issues at the same time :

- Issue with PWHT
- Delivery delays
- No reaction on the offer to do future business (which seems to be contradiction by the way)

The way this is handled makes me doubt about the professionalism of this client company and most likely issues during execution are not a surprise.

 

[gr2vessels]

It sounds a bit inconsistent;- the Client is not suppose to complain to the Vendor, but to the engineer mishandling the requisition. The Vendor is protected by his written offer and the Client most likely has a specification ignored by the engineer. I got a bad feeling 10815L that you are between the rock and the hard place. Someone has to pay for the mistake and seems the Client and the Vendor are not the willing ones. Learning has a price...
Good luck,
gr2vessels

 

[10815L]

Hi All,
Thanks for your valuable thoughts, Indeed PWHT is over looked and this contract was signed before I joined. lateral stage project hand over to me and I found as per company specification PWHT is mandatory. obviously client is not ready to pay and vendor also not ready to do with out payment but we offer to vendor for future business opportunity but vendor again not coming to the agreement without additional payment.
Thanks
10815l

 

[pradipgoswami]

Please call a meeting involving your vendor and the client. The presence of contract monitors is a must.Use the Carrot and Stick policy if required.

As per your intial post:-
-during clarification vendor suggested PWHT is not required and not included in the scope of work
-and vendor quoted the price to win the contract
-but later on client is compling the vendor for PWHT due to sour service.

Since it's an engineering project the vendor can't just walk away "on the pretext ,No extra money, No PWHT". If so happens, it would spoil their reputation also.

I would say a meeting involving all would be helpful and useful.

Thanks.


Pradip Goswami,P.Eng.IWE
Welding & Metallurgical Specialist
Ontario, Canada.
ca.linkedin.com/pub/pradip-goswami/5/985/299

 

[gr2vessels]

Very interesting proposal;- I only wonder what will be the incentive for the Vendor to attend the proposed meeting, perhaps a miracle? Perhaps a sudden urge to provide a free PWHT, when clearly he was not requested to provide compliance with a sour service requirement. This requirement was later pointed to the engineer by the Client;- the easy way out for OP is to try passing the buck to the Vendor. So yes, a miracle or sudden urge might be the answer.

 

[sshep]

Start with getting vendor to quote the added cost. Maybe it is not that much and agreement can still be reached.

The client will have to pay if they did not provide their specs as part of the RFP/RFQ process, or if they overlook the exceptions. Alternatively, they can pay the order cancelation cost and start over. As a last resort there is probably an arbitration clause, but the clients case sounds hopeless. That is how it looks to me anyway.

Best wishes,
sshep

 

[10815L]

Hi sshep,
the specs was provided and vendor did not include as per his own though and later on responsible engineer did not give attention on the significance this point. vendor is very claver and won the contract by reducing the number items for F&G system and Blow down control valve. I can't blame only vendor but responsible engineer also for his lack of experience.
Thanks
10815l

 

[sshep]

The other alternaitive is that you could write an exemption to the PWHT requirement. Although you said sour service and the system seems to be fuel gas, it wasn't clear if it was sour water from knock out, or if it is H2S in the fuel gas, etc which drives this. For example I know some company standards that allow a PWHT exception for H2S containing gas systems running below 400kPa. I have never really researched industry standards on the limits, but surely they exist.

I do applaud your commitment to doing it right because it would be easy to "look the other way". The problem with operating outside of established best practice and company limits usually shows up many years in the future after corrosion, embrittlement, and fatigue have taken their toll. Often the results are loss of containment with serious consequences.

Good luck,
sshep

 

[IFRs]

The vendor was slightly wrong ( not bidding to the specs ) and the owner was slightly wrong ( buying low price without checking the bids carefully first ). The end result is in conflict with code and possibly safety. Contact the #2 vendor, make sure their bid is in compliance. Keep them in your back pocket. Sit down with vendor #1, work it out on a friendly basis and split the cost. The vendor wants repeat business, hold it over them, the owner needs it done right. Both need to compromise. If the vendor won't budge, get out the lawyers and void their contract no matter the cost. Go with vendor #2 and let vendor #1 know. Never buy from vendor #1 again. Do it quickly.

 

[10815L]

Hi all,
Thanks for you and valuable inputs, lastly, vendor is agree to meet client requirement with out increasing in price.
Thanks
10815L

 

[sshep]

Good news for you. Congrats on sticking it out. Just curious, how much was the extra cost? Was it a case of arguing over peanuts, or was a lot of money really at stake?

 

[10815L]

sshep,
money issue was big and more over to this was management, to day managers was yesterday leads and they don't want to bring this issue up to top management, therefore, I & my supervisor argue lot of with vendor and convince them for the requirement of service and finally vendor is agree to do this.
Thanks
10815l