Zoe Stollard, Partner at Browne Jacobson LLP, discusses about the importance of avoiding any potential CFSI when entering the supply chain at Hinkley Point C.
It is important to avoid any potential Counterfeit, Fraudulent, Suspect Items (CFSI) entering the supply chain at Hinkley Point C. To do this, NNB has ensured that a clear written policy and strategy are in place, together with matching contractual obligations throughout the supply chain. The system includes arrangements to mitigate the risks of CFSI entering NNB’s supply chain and gives due priority to safety. Safety is of paramount importance when building a nuclear power station and this is one of the main reasons why the CFSI policy is so carefully policed.
The Hinkley Point C contracts set out that any goods provided or used as part of the Service must not be counterfeit in whole or in their component parts or constituents (i.e. no matter how small that part). This is because the size of a part may not be comparatively equivalent to its importance to the overall mechanism within which it is incorporated. By way of example, counterfeit, lesser quality, non-guaranteed ball-bearings may have a significant effect on the overall workings of an important part of nuclear-related machinery at Hinkley Point C.
Each Contractor at Hinkley Point C has contractual obligations to replace any suspect or counterfeit goods with genuine goods acceptable to NNB. If it does not, or if the provenance of goods is not adequately traceable, NNB has the right to impound suspect or counterfeit goods and provide them to relevant authorities for investigation. Not putting in place sufficient checking systems and evidence could be an expensive mistake for a Contractor.
The Contractor will be liable for all costs relating to removal, replacement and impoundment of suspect or counterfeit goods and NNB is entitled to withhold payment for such items pending the results of any investigation. No extension of time will be granted by NNB for any resulting delay in delivery of the goods, and there will be no Price increase to cater for the removal, replacement or impounding of CSFIs. Any delay or increased Price is at the Contractor’s risk, unless eventually an investigation clearly demonstrates that the goods in question were not indeed counterfeit.
Contractors should bear in mind that the CFSI policy and contractual obligations are far-reaching. They may also apply to equipment used on site that is not to be permanently incorporated into the project (for example vehicles, tools, machinery). The risk of CFSI also applies to spare parts for years to come if, according to the contract, spare parts are required to be made available to NNB for in the future. It may also apply to consumables (no matter how small or seemingly insignificant they may be).
Contractors entering the Hinkley Point C supply chain should ensure all employees, agents and sub-contractors are aware of these requirements, including future-proofing for long-term contracts. It is important that from the beginning of Providing the Service adequate training is in place and the Contractor maintains good quality records of provenance.
Note: This article expresses the views of Hinkley PSG and is not endorsed by Hinkley Point C or a statement from the Project.