001-40 WC 139 NOV-DEC24 PAPERTURN - Flipbook - Page 9
LEGAL
Reduce the Risk
BY MANAV SINGHLA AND LORI GOLDBERG
EW AND NOVEL wastewater treatment technologies provide exciting opportunities to improve the
efficiency of both new and existing municipal and
industrial wastewater treatment facilities. These
advancements can reduce facility footprints, lower
lifecycle costs, and transform treatment plants into sources
of high-quality fertilizer, clean electricity, and renewable
natural gas.
With the possibilities and promises of new and novel
technologies, it’s important that at the outset of a contract
the parties consider and agree upon how they will measure
whether these technologies work as intended and how they
will proceed if they do not. Having these conversations
early in the process helps all involved ensure they are in
agreement about the risks, roles, and obligations that they
are undertaking. This also reduces the potential for future
litigation.
When negotiating or drafting a contract where the
parties will be incorporating new or novel technologies into
wastewater treatment facilities, they should consider the
following:
N
Determining and measuring performance metrics
1. What are the quantitative and qualitative performance metrics for the
new technology e.g. biogas quality and quantity, odour control and
treatment, quantity and quality of residue from source separated organics processing, etc., and what are the acceptable ranges or tolerances
for each performance metric?
2. What methodologies will be used to determine whether the performance metrics have been achieved?
3. Under what conditions will the data collection activities be performed
and who will have the authority to determine if the conditions for data
collection activities have been met?
4. Who will be responsible for performing the data collection activities
required for the performance metrics and for analyzing the results?
Payment and performance incentives
5. If payments are tied to the achievement of target performance metrics,
how will payments be affected in the event that the target performance
metrics are not achieved?
6. If there is to be an incentive structure or monetary performance
guarantees tied to performance metrics, how will such amounts be
calculated or determined?
Determining causes of technological non-performance
7. If the technology fails to achieve the target performance metrics, what
is the allocation of responsibilities between the parties for investigating
the root causes of the failure and for interim mitigation activities?
8. If the technology continually fails to achieve the target performance
metrics, at what point will the parties explore replacing the technology
and how will the costs of the replacement be allocated?
Pre-existing structures
9. What is the allocation of responsibility between the parties for any
defects in existing infrastructure, including the point of tie-ins between
the new technology and the pre-existing infrastructure?
10. What is the allocation of responsibility for the maintenance of owner
supplied or pre-existing infrastructure during the installation phase
and the operations phase for the new technology?
Inputs affecting performance
11. What are the input assumptions and the range of acceptable inputs
for the optimal performance of the new technology and what are the
consequences of the quality or quantity of the inputs falling outside
of those acceptable ranges? What is the allocation of responsibilities
for sourcing acceptable inputs and ensuring the same are used during
operations?
Dispute resolution
12. What dispute resolution protocol will the parties use in the event of a
dispute over issues such as proper methodologies, the interpretation
of data, or the root causes of the technology’s failure to perform as
anticipated?
Warranties
Lori Goldberg is a partner in Miller Thomson LLP’s
Construction & Infrastructure Group and
specializes in contracting and procurement for
construction and infrastructure projects.
Manav Singhla is a partner in Miller Thomson LLP’s
Commercial Litigation and Construction Litigation
groups and specializes in advocating for and advising
clients on the resolution of commercial disputes.
WAT E R C A N A D A . N E T
13. What is the duration, nature, and extent of the warranties to be provided on novel technologies?
The above list, while not exhaustive, highlights the wide
range of the issues that the parties need to consider and discuss when entering into contracts that use new and emerging
technologies. While not every issue can be anticipated in advance, having a well drafted contract that clearly sets out each
party’s risks, responsibilities, and expectations will assist the
parties in navigating any issues that may arise during the life
of the contract and limit any potential issues for litigation.
WATER C AN ADA • NOV EMBER/ DECEMBER 2024
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