Product Substitution Guide

COVID-19 may impact the building product supply chains and availability of materials, therefore it is particular important to understand the process for changing or using alternate building products during a build.

Introduction

For many reasons a party to a building project may consider using building products that are different to those originally specified in the building permit or requested as part of a contract.

Substitution can sometimes be simple and easy, but it can also be complex, time consuming and risky. 

Some substitutions can be successful and save money and/or time and be very simple such as switching one brand of product for an equivalent performing alternate.

However, if not managed correctly product substitution could potentially create legacy issues for the building if a full evaluation of the proposed change is not undertaken.

Substituted products could also in certain circumstances compromise the performance of the building as a whole.

With more and more new products and systems coming into the building industry and often many of these being ‘building systems’ their performance and certification can be dependent on the specified and ancillary products that must be used in accordance with the product documentation. 

Therefore managing changing of products to those originally specified or requested, requires careful consideration.

When might product substitution be considered?

• The specified product might not be available locally, or may take too long to deliver.
• Different products might be easier to install/assemble, or have better performance.
• The specified product might be available only through a custom manufacture, making it expensive and have limited availability.
• Contractors may not be familiar with the specified product and charge a higher price for installation or due to unfamiliarity with the product, concerns may be raised about installation quality or preference of different brand of same product type.
• In the time between project design and project build, specified products may have become unavailable, may be superseded by newer products, etc.

Unfortunately, some people may see ‘product substitution’ in a negative light as builders seeking to save costs and use inferior products, however, they don’t adequately understand that there are numerous  reasons for product substitutions as outlined above.

Product substitution and COVID-19

Coronavirus (COVID-19) may have a global impact on supply chains and business operations and the extent of the impact of the current situation will most likely be unknown for some time. 

Delays in getting building supply can negatively impact your building projects, including finishing times and timeframes for starting new jobs. 

With availability of some products being impacted at present and potentially into the future, there may be a need to consider changing or substituting some products to allow projects to be completed.

Again, this reinforces the need to manage the changing of products carefully and ensure regulatory and contractual requirements are still met.  Keeping open lines of communication with relevant parties, particularly the owner and building certifier/surveyor is equally important.

Different types of product variations

• Products may be specified by reference to a Standard. If so, any other product meeting or going beyond that Standard from any manufacturer could be used.
• Products may be specified by naming a specific product or manufacturer or showing the option of selecting equivalent products by stating ‘or equivalent’ in the plans or specifications.
• Seeking subsequent approval for alternate products to be used where it may materially change the design, performance or aesthetics of the dwelling. 

 When thinking about substituting a product in a building project, it is good practice to follow a process that considers the effects of the change and makes sure that the related parties are aware, and where needed, have approved the change. 

Substitution and approvals

Products included in ‘building work’

Products included in ‘building work’ must comply with the NCC. What is considered ‘Building work’ is defined in state and territory legislation. In carrying out building work, a building approval must be obtained from the relevant building certifier/surveyor for the project or the local council in some states. 

If the building work is considered ‘exempt work’, this means a building approval is not required but, as it is still building work, it must comply with the NCC.

However, products such as fittings and fixtures i.e. door handles, paint, skirting and architraves, appliances, etc. are not regulated under the NCC or as ‘building work’ and these products can be substituted without need for reference to relevant NCC or building application/approval. They may though be covered in contractual requirements or general specifications agreed to with the home owner. 

Categories of product substitutions

Product substitutions will generally fall into one of the following categories:

• Those that can be done as of right as they do not involve building work (e.g. changing skirting or decorative mouldings, or using wallpaper instead of paint).
• Minor immaterial changes, would under most circumstances be done as of right but still need to ensure the product used complies with the NCC. 
• Medium variations, where it could involve design change or project change that has material impact, will likely require approval by the building certifier/surveyor and then recorded on the final approval (these may require updated drawings or new technical information to be given), or
• Substantive variations, which will require a formal change to the building approval and may require changing plans and specifications and subsequent re-approval before they can go ahead.

NCC product documentation requirements

Building legislation requires all parties in the supply chain to make sure that the materials and products used in building work are fit for purpose. Part A5 of the NCC sets out the product documentation requirements for building products (excluding electrical products). These provisions explain how to provide evidence of suitability for ‘a material, product, form of construction or design’ to demonstrate that it is fit for purpose for the application it will be used in. 

The types of evidence that are required to demonstrate that a product, applies both for products complying through a Performance Solution or Deemed-to-Satisfy Solution and may include one or a combination of the following.

• CodeMark Certificate of Conformity
• Certificate of Accreditation (state based accreditation system)
• Certificate or report issued by a product certification body accredited by JAS-ANZ 
• Report issued by an Accredited Testing Laboratory
• Certificate or report from a professional engineer or other appropriately qualified person
• Another form of documentary evidence

For more information on those compliance pathways you should refer to the NCC directly, the ABCB evidence of suitability handbook (www.abcb.gov.au) and HIA have produced a range of information sheets on the NCC evidence of suitability and product conformity requirements.

Understand the implications of substitution of a product or system

When substituting a material or product it is important to understand the building context.

Certain products may have been specified for a reason, particularly if the product is part of a performance solution and a substituted product may significantly change NCC or performance compliance that has been achieved for the project. Points you should think about include the following:

• Is the property in a high wind, bushfire, flood or corrosion zone? Is the substituted product appropriate for these?
• Certain design choices have already been made and whether substituting a product will reduce compliance or alter any aesthetic building features.
• Are there any restrictions under heritage or health and safety legislation, planning restrictions or similar interaction with other regulatory responsibilities?
• Will the product substitution change a deemed-to-satisfy building solution into a performance based solution?

Notifying the Building certifier/surveyor of product changes

As noted above, under most circumstances apart from minor immaterial changes, the building surveyor will likely need to be informed of the change. The building certifier/surveyor’s will generally take into consideration the following:

• Decide whether these variations can be approved or require updates or changes to the approved plans.
• Advise whether the variations can be treated as minor variations or will require an amendment to the building approval.

Ideally, you should notify the building certifier/surveyor as early as possible to avoid any unnecessary delays.

If a product is substituted without approval you may encounter a problem when the building certifier/surveyor goes to issue the final certificate, as the building work will not match what is on the building permit.

Products that are components of building systems

A building system is a combination of products specified by a manufacturer, supplier or designer to be used together, as a system, to achieve the requirements of the NCC.

Extra caution needs to be taken when thinking about substituting a product that is part of a building system. 

This is because the change will most likely affect the performance of the whole system. The proposed substitute product may not have been tested for use with the other components, or the system may become outside the scope of use defined by the manufacturer.

Changing a component that forms part of a system may also void any warranty offered by the supplier or manufacturer.

Contractual responsibilities and implied warranties

State and territory based building laws set out a number of implied warranties that apply to building work. You cannot contract out of and these and non-compliance can have significant consequences. 

Some of these implied warranties include:

• The building work will be done properly, competently and in accordance with the plans and specifications.
• All the materials used will be suitable and will also be new, unless otherwise stated in the contract.
• The building work will comply with the NCC and relevant building legislation. 
• If the contract states any particular outcome and the owner depends on the skill and judgement of the contractor to achieve it, the building work and the materials will be fit for purpose and of a nature and quality suitable to achieve that result.

Builders should check the contract they have with the owner. If a builder substitutes a product, they may no longer be building what they have been contracted to provide.

Discuss changes with relevant parties

Product substitution should be discussed between all parties – the designer, builder, project manager and building owner – as all have roles and responsibilities in the process.

Building owners will usually be responsible for making final product decisions for material changes to the design unless they have delegated this responsibility to another person.

Most importantly though is that you discuss any product changes with the building surveyor/certifier for your project, as at the end of the day they have to approve the new product. Most building regulators have information on the process for variations to projects from building approval documentation on their websites.

To discuss any of the items in this information sheet further, contact HIA Building Services team on 1300 650 620 or email hia_technical@hia.com.au