Contract Practice - Level 3 (Off site Materials)

Question 1

Using a JCT D&B 2016, what are the requirements to value off-site materials?

Answer 1

Items need to be listed in the Contract

Offsite materials would need to be vested, supported by a vesting certificate

Materials need to be ready for incorporation in the works

Insured, incase materials are lost or damaged

Question 2

What are the risks associated with offsite materials?

Answer 2

Potential insolvency of any relevant Contractor (ie Materials being paid for but not delivered to site)

Damage to materials in storage or in transit to site

Question 3

How can the Client protect itself against the risks of offsite materials payments?

Answer 3

O-I-I-I-O

OWNERSHIP - (supported by a Vesting Certificate)

IDENTIFYING THE MATERIALS - (materials segregated and specifically marked as the Clients property)

INSPECTION - (Access allowed to where materials are being held to inspect the quality of the goods)

INSURANCE - (Risk of damage to materials should be covered by insurance and employer named on the policy)

OFFSITE MATERIALS BOND - (Allowing the Client to claim under the bond should the materials not be delivered to site)

Question 4

Can you Instruct listed items - post contract?

Answer 4

CHECK WITH EAs

Question 5

What did you advise the Client on the benefits of using a vesting certificate on Devonshire Row?

Answer 5

On this project no items were listed.

I advised the Client that as no items were listed there was no obligation to make payment.

However we could assist the Contractor with cashflow issues by using the contractual mechanisms, including vesting the materials to ensure the Client was be protected from the risks associate with offsite materials payments

Question 6

What is included on a Vesting Certificate?

Answer 6

Information about the two parties
Project address and materials storage address
Insurance certificate against loss or damage
Schedule of Quantities - Cost and materials

Question 7

What’s the difference between uniquely listed and non-uniquely listed items?

Answer 7

Uniquely listed - specific for the project and do not require off-site materials bond

Non Uniquely listed items - are not project specific and require a bond to be in place