Late delivery of certified vendor data (CVD) is an often-overlooked root cause of construction project delays, especially on complex industrial projects such as power plants and manufacturing facilities. In my experience overseeing numerous such projects, I've seen critical vendor information for engineered items arrive much later than promised or required, triggering cascading schedule impacts that manifest well before construction even begins.
While these delays are usually first treated as purely technical or commercial problems, they almost always carry the seeds of future disputes between owners, EPC contractors, and OEM vendors. When parties recognize this early and engage in structured alternative dispute resolution techniques such as facilitated meetings or mediation, they can often realign expectations, adjust schedules, and properly assign risk before positions harden, damages mount, and claims escalate into formal arbitration or litigation.
Original Equipment Manufacturers (OEM’s), or vendors, are essential for process-related industrial projects. They are a critical component of the EPC team. Without their engineered items, the industrial facilities they service simply won't function. It is imperative that they be engaged early and comprehensively in the project development process, either by the Owner or the EPC general contractor. The most effective contract mechanism for accomplishing this, is a well-written purchase order (P.O.) document.
The purchase order (P.O.) with a vendor is a binding contract covering price, performance guarantees, warranties, and delivery dates—often with liquidated damages (LDs). On large-scale EPC contracts, these P.O.s run into the tens of millions. Vendors typically require a
20-30% down payment to fund project-specific engineering and secure raw materials. Unlike standardized off-the-shelf production components, it is not “cash on delivery.” In addition, the lead times on these components can be quite extensive (a year or more).
These vendors are also directly involved with any air permits being solicited from local and/or federal agencies. For these reasons, owners are often forced to place these purchase orders well before hiring their EPC general contractor (GC). This dynamic, if not handled properly contractually, can also sow the seeds for future disputes.
With such large financial commitments being made by an owner, be they a corporation or public entity, you can appreciate the hesitancy that is present in placing the initial purchase order(s). However, the placement of such P.O.’s are key critical path schedule milestone in the life of any EPC project.
The placement of the P.O. sets in motion a number of events that are crucial to the project’s completion. These include, but are not necessarily limited to, preparation of environmental studies needed for air permits, the securing of raw materials for production, and the development of site-specific engineering that is essential for the balance of plant engineer to begin their work. All of this information, when complete, is certified by the vendor and submitted to the Owner (and EPC GC) for final approval. This owner-approved CVD submittal facilitates and precedes numerous other critical path activities in the project such as air permit approval, balance of plant design completion, and component manufacturing, all of which are crucial for project completion.
Too often, project schedules ignore vendor data timelines during procurement planning. This oversight happens because initial schedules prioritize construction milestones over upstream engineering dependencies. Preventive strategies can include identifying critical components early by engineering discipline where CVD is needed for IFC documents and/or air permits. Establishing hard “need dates” in the purchase order for these deliverables and applying appropriate LD’s will enforce accountability.
If the parties fail to recognize this potential schedule challenge early in the planning process, these schedule impacts accumulate, the parties’ relationship begins to suffer, and the seeds of future disputes are sown. Owners may argue that the EPC contractor failed to manage its vendors, contractors may point to late or incomplete OEM submittals, and vendors may blame late approvals or scope changes. If left unchecked, what began as a technical sequence issue evolves into competing delay analyses, back-charges, and notice letters that set the stage for formal claims.
Because late certified vendor data sits at the nexus of so many project obligations, it is an ideal candidate for early dispute-avoidance techniques. Structured ADR tools can be built directly into the project controls process:
- Early partnering or alignment workshops at the time major P.O.’s are placed, where the owner, EPC contractor, and key OEM vendors jointly review the CVD “need dates,” discuss engineering dependencies, and agree on how delays and changes will be handled if they arise.
- Standing issue-resolution meetings facilitated by a neutral or project “dispute board” member when critical CVD milestones are missed, focused on identifying root causes, revising logic ties in the schedule, and documenting responsibility in real time rather than years later in arbitration.
- Targeted mediation sessions triggered by defined events—such as missed CVD dates on critical path equipment—where the parties exchange preliminary delay information, explore practical workarounds (out-of-sequence work, resequencing, temporary designs), and negotiate interim compensation or time extensions while the project continues.
These techniques do not replace the parties’ contract rights. Instead, they provide a structured forum to address schedule-impacting events as they occur, reducing the likelihood that CVD issues become large, entrenched disputes by the time the project reaches substantial completion.
Virtually all construction agreements contain a disputes clause that provides for a graduated process for resolving disputes that arise on a project. However, there is a hesitancy by one or both of the parties to initiate such clauses. Doing so may be viewed as pushing the “panic button” or may even be perceived as an admission of failure in some sense. Such perceptions are counter-productive in my view. These clauses are included in agreements precisely to be used as preventative tools. Their use should be encouraged rather than discouraged. They should be implemented early and often.
In summary, prioritizing CVD in planning prevents delays and disputes on industrial EPC projects. Utilizing the dispute resolution techniques noted above and provided for in most contracts should be encouraged.