The CTX Model Newbuilding Specification

The two documents that govern a tanker newbuilding project are the Contract and the Specification. In terms of tanker quality, the key clause in the Contract is the Guarantee, which is addressed in the CTX Standard Newbuilding Guarantee project. Everything else depends on the Specification. If something desirable is not required in the Specification, it is a certainty that it will not be in the ship. 1

Surprisingly, tanker practice is that the seller, the shipyard, writes the Specification. In other words, the seller tells the buy what he wants. Even a dissatisfied owner has little control over this process The better owners will generally write a "Guidance Specification" which describes in general terms the ship he wants, and adds some specific requirements which usually try to correct the worst defects that that owner has experienced in his past newbuildings. The Guidance Spec may range from a page or two to perhaps 50 pages, although the latter is rare. The Owner then puts the Guidance Spec out to bid.

The yards modify a standard design slightly to reflect the Guidance spec throwing out any requirements that they deem "unnecessary" or "infeasible", and bid the project. The yard that wins the bid then writes the Specification for the ship which can easily run 500 pages, of very carefully worded legalese. The goal of this wording is to make the yard's job as easy and as cheap as possible, while sounding like the owner's Guidance Spec is being met. The final wording of the Specification is subject to negotiation but the advantage is all to the drafter. Owner's technical people must search thru 500 pages of closely worded boilerplate to figure out if a particular requirement is actually met or not. Often they are in the position of searching for what's not there. This process is made much more difficult by the fact that each yard uses a different coding system for organizing the Specification and the subsequent construction. Finally and most importantly, the owner's personnel are in extremely weak bargaining position. The yard has already been chosen. Generally, there's a tight deadline. A point that a yard would quickly concede when it was still competing for the job becomes the subject of endless wrangling. In most cases the yards wins on the grounds that the Specification represents the "yard's standard practice". The final specification ends up looking very much like the yard's original draft, which truly does represent the tanker industry's standard practice.

The whole raison d'etre of the CTX is that the industry's standard practice is unacceptable, and requires wholesale upgrading. To this end, the CTX will produce a model tanker newbuilding specification and make it available to the industry. The result will be an XML document which is both the Specification itself and a Concordance on this specification. The Concordance will comment on each clause, the reasoning behind the clause, potential pitfalls, and in a few cases, possible alternatives. The document can be produced with or without the commentary. The document will be structured with blanks, so that an accompanying file will provide ship specific information such as deadweight, cubic, speed, etc, for filling in those blanks. In theory, an owner could simply enter his requirements into that file, enter a command and presto he has a full blown specification.

Scripts for converting the XML to HTML and various printable formats, with and without the Concordance, will have to be developed.

The first version of the model newbuilding spec will necessarily be based on the experience of the CTX's personnel. We hope that others will contribute their experience, anonymously if desired, to the improvement of this specification. Right now each owner's bad experiences are carefully kept in-house since every owner has to claim that all his ships are just wonderful once he is stuck with whatever the yard has produced.

An important by-product of this project will be to highlight specific weaknesses and loopholes in the Class Rules in the hopes that this will produce improvements in the Rules.

This project will depend on the CTX's standard coding system.

Email about this project should be sent to spec@c4tx.org.

Footnotes

1. The possibility of Change Orders does exist. But the yard is totally in control here. It can either refuse any requested change order that it deems disruptive or will affect the production schedule, or simply price it so high that it is economically infeasible. In practice, change orders are almost always limited to trivial modifications.