cover to the watermains in a location where future roadworks were planned. Soon after mainlaying began, the mainlaying consultants came into possession of drawings on which a future road was indicated and even specific attention had not been drawn to this future road in the project handing-over notes, the information should have been used judiciously in relation to the assignment. The Director of Water Supplies is seeking legal advice as to whether or not action should be taken to recover some of the costs from the mainlaying consultants.
215. On the question of the issue of procedures on the management of the work of consultants, the Director of Water Supplies has informed me that arrangements exist for the monitoring of the performance of consultants and confidential reports are prepared at regular intervals. The Director has opined that the monitoring of the work of consultants involves ensuring that their duties as set out in the consultants brief and the general procedures on contract and related matters are followed and the Water Supplies Department procedures are not dissimilar from those in the Civil Engineering Manual applicable to the Engineering Development Department and the New Territories Development Department.
216. I have expressed the view to the Director of Water Supplies that regular confidential reports by themselves are not an effective tool for managing the work of consultants. I have informed him that the Director of Engineering Development has very recently incorporated detailed guidance on the management of consultants in an amendment to the Civil Engineering Manual and has recently informed the Deputy Financial Secretary that further detailed guidance on the subject will be included in a completely revised version of the manual scheduled to be published in late 1985. I have pointed out to the Director of Water Supplies that the recent amendments to the Civil Engineering Manual can be traced to paragraph 6.54 of the Sixth Report of the Public Accounts Committee issued in December 1983 where the Committee recommended that measures should be taken to improve procedures for the management of the work of consultants. The Government accepted the Public Accounts Committee's recommendation. I have also pointed out to the Director of Water Supplies that in paragraph 6.46 of their Seventh Report issued in December 1984 the Public Accounts Committee noted that the evidence heard before them suggested a failure on the part of the consultants appointed as project managers for the Aberdeen and Airport Tunnel projects to perform their duties satisfactorily. The Committee went on to recommend that where consultants' duties included project management it was necessary for the Government departments concerned to exercise, in turn, adequate supervision of those consultants. The Government again accepted this recommendation and this resulted in the Director of Engineering Development's statement concerning the issue of further detailed guidance on the matter. I have also expressed the view to the Director of Water Supplies that, in the context of the growing awareness of the need to exercise more control over the work of consultants, his current procedures are not adequate for this purpose.
217. In reply, the Director of Water Supplies has expressed the opinion that the guidance recently incorporated in the amendments to the Civil Engineering Manual is more of an administrative guideline than a detailed instruction of procedures for direct supervision and monitoring of the consultants' work and that most aspects covered by this guideline are being practised by his department. He has informed me that he is prepared to adopt the further detailed guidelines on the supervision of consultants when these have been prepared, wherever they are appropriate to his department. The Director has pointed out that his concern when managing consultants is the danger that too close supervision could result in interference with the consultants' duties and responsibilities, and in turn result in a diminution of their liabilities. For this reason, while he fully agrees that guidelines on the broad principles of monitoring and supervision of consultants should be followed, it would seem more appropriate to ensure that only efficient, competent and professional consultants are employed by means of an effective confidential report system.
218. Head 707 – New Towns and Public Housing (other than Housing Authority). Subhead 7037LP. Tuen Mun divisional police station. In October 1976 a contract in the sum of $745,000 was awarded for the piling of the foundations for the Tuen Mun divisional police station and the works were scheduled to be completed in April 1977. Despite the issue of warning letters to the contractor regarding his rate of progress this remained less than satisfactory and the contract was not certified substantially complete until June 1977, liquidated damages being imposed for the delay in completion. The performance of the contractor generally was also adversely commented on by the project structural engineer who reported that the contractor was an incapable contractor.
219. Attached to the completion certificate of the piling contract was a list of outstanding remedial works which would be carried out by the building contractor, the piling contractor undertaking to pay the additional costs involved. Shortly after the remedial works commenced in August 1977, a very much undersized pile with an irregular surface was exposed by the building contractor. Further irregularities including cracked piles and missing steel reinforcement were also discovered and a full investigation of all piles for the main building was carried out. It was then found that 40% of the 278 piles involved were defective in one way or another. Remedial works were completed by the building contractor in March 1978 at a cost excluding claims of $355,000 and this sum was paid to the building contractor by the Government in instalments as the work progressed between August 1977 and August 1978. A further sum of $100,000 in part payment of claims was subsequently paid to the contractor in April 1981. However action to recover these costs from the piling contractor under the terms of the contract was not taken until the matter was raised in audit in July 1984.
220. In reply to my enquiry as to why nearly six years elapsed without making any attempt to recover the additional costs from the piling contractor, the Director of Building Development informed me that the practice was not to charge a defaulting contractor for the additional costs until the full final cost, including claims, was known, even though action to recover earlier could have been taken under the terms of the contract. In the light of this case, the Director has agreed
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