Contract Clauses and their Pitfalls

Abstract

Since the late 1950s in the United States, reliability and maintainability requirements have appeared in both military and civil engineering contracts. These contracts often carry penalties for failure to meet these objectives. For some 15 years in the UK, suppliers of military and commercial electronic and telecommunication equipment have also found that clauses specifying reliability and maintainability were being included in invitations to tender and in the subsequent contracts. Suppliers of highly reliable and maintainable equipment are often well able to satisfy such conditions with little or no additional design or manufacturing effort, but incur difficulty and expense since a formal demonstration of these parameters may not have been previously attempted. Furthermore a failure-reporting procedure may not exist and therefore historical data as to a product’s reliability or repair time may be unobtainable. The inclusion of system effectiveness parameters in a contract involves both the suppliers of good and poor equipment in additional activities. System Effectiveness clauses in contracts range from a few words — specifying failure rate or MTBF of all or part of the system — to some ten or twenty pages containing details of design and test procedures, methods of collecting failure data, methods of demonstrating reliability and repair time, limitations on component sources, limits to size and cost of test equipment, and so on. Two types of pitfall arise from such contractual conditions.

• (a) Those due to the omission of essential conditions or definitions.

• (b) Those due to inadequately worded conditions which present ambiguities, concealed risks, eventualities unforeseen by both parties, etc.

The following headings are essential if reliability or maintainability is to be specified.