In New Zealand’s construction industry, the NZS 3910 contract is one of the most widely used agreements for delivering projects.

It provides a structured approach to managing responsibilities, payments, variations, and disputes between project parties. When understood and applied correctly, NZS 3910 creates clarity, fairness, and efficiency.

However, on many projects across the country, we continue to see a recurring issue:

Principals unknowingly paying more than they need to.

Not because of poor management.
Not because contractors are inflating costs.

But because roles within the NZS 3910 contract are not always clearly understood.

When responsibilities overlap, duplicate work begins to appear. Over time, this can quietly add $5,000 to $20,000 in unnecessary costs on a single project.

Understanding the NZS 3910 Contract Structure

The NZS 3910 standard construction contract is structured around three key parties:

• The Principal (the client commissioning the works)
• The Contractor (the party delivering the construction works)
• The Engineer to the Contract (responsible for administering the contract)

This three-party structure is fundamental to how NZS 3910 operates.

Under the contract, the Engineer to the Contract has significant responsibilities, including:

• Assessing Payment Claims
• Valuing variations
• Issuing payment schedules and certificates
• Acting fairly and impartially when administering the contract

These functions are essential for maintaining commercial balance within the project.

The contract intentionally places these responsibilities with the Engineer to ensure decisions are made consistently and independently.

When Role Boundaries Become Blurred

Another common scenario occurs when the Principal’s Project Manager begins performing tasks that fall under the Engineer’s responsibilities.

This overlap may include:

• Reviewing contractor Payment Claims
• Assessing variation pricing
• Advising on payment certification
• Interpreting contract clauses

While these actions are often well-intentioned, they can blur the contractual boundaries established by the NZS 3910.

When those lines become unclear, the project can experience:

• Increased administration costs
• Slower decision making
• Potential disputes regarding responsibility

Clarity of roles is essential to avoid these issues.

Understanding Liability in NZS 3910

Another important consideration relates to professional liability.

Engineers sometimes appoint an Engineer’s Representative to assist with contract administration.

However, appointing a representative does not transfer responsibility. Instead, the representative acts on behalf of the Engineer, meaning the Engineer may still carry liability for the representative’s actions.

Professional indemnity exposure in these roles can therefore be significant.

Anyone acting in these positions should ensure they clearly understand:

• Their responsibilities under the contract
• Their level of authority
• Whether they are personally covered under their organisation’s professional indemnity insurance

Understanding these obligations is critical for managing risk within construction projects.

Larger Project Teams Can Increase Complexity

As projects become larger and more complex, the number of consultants and specialists involved tends to increase.

While additional expertise can bring value, it can also introduce challenges such as:

• Overlapping responsibilities
• Communication breakdowns
• Increased coordination requirements

Importantly, adding more consultants does not reduce the responsibilities assigned to the Engineer under NZS 3910.

In many cases, the presence of larger teams increases the need for clear contract administration and strong role definition.

Two Key Lessons for Principals

Based on our experience working with construction contracts across New Zealand, two important lessons consistently emerge.

1. Ensure the Engineer Has the Right Capability

When appointing an Engineer to the Contract, ensure they have the technical and contractual expertise required to administer NZS 3910 effectively.

A capable engineer can manage valuation, certification, and contract administration without unnecessary duplication of services.

2. Define Roles Clearly Before the Project Begins

Clearly defining responsibilities at the beginning of a project reduces the likelihood of overlapping duties and unnecessary cost.

When everyone understands their role, projects run more efficiently, and risks are easier to manage.

Three Questions to Ask Before Your Next Project

Before commencing a project under NZS 3910, it is worth asking your Engineer three simple questions:

1. What responsibilities do you hold under this contract?
2. What tasks fall outside your role?
3. Who else on the project team is performing similar functions?

These questions can often identify potential inefficiencies before construction even begins.

Build Your Confidence in NZS 3910

The NZS 3910 contract is a powerful tool when properly understood. However, many professionals working in construction have never received formal training on how the contract operates in practice.

At Seven Rivers, we provide practical NZS 3910 training courses designed for construction professionals, project managers, engineers, and contract administrators across New Zealand.

Our training focuses on real-world application, helping participants:

• Understand the structure and intent of NZS 3910
• Navigate contract administration confidently
• Manage variations and payment claims effectively
• Reduce commercial risk on projects

Whether you are new to the contract or looking to deepen your expertise, our training will give you the clarity and confidence to manage NZS 3910 successfully.

👉 Book your place in our NZS 3910 training today and strengthen your understanding of one of New Zealand’s most important construction contracts.

Visit: sevenrivers.co.nz

Listen to the Full Podcast Episode

This topic is discussed in more detail in the Seven Rivers podcast, where Stuart Bailey shares practical insights from working as an Engineer to the Contract on projects across New Zealand.

In the episode, Stuart explains how role duplication occurs under NZS 3910, why principals sometimes unknowingly overspend, and how better contract understanding can improve project outcomes.

🎧 Listen to the episode here:
https://open.spotify.com/episode/2UESpdh5e22Ed0G6fYGYEQ?si=laNBquQDT5OsABWKS0ekHA

The above relates to the NZS 3910:2013. If you are working with the NZS 3910:2023, the above is still true, but swap out the Engineer for the Contract Administrator.