Option C contract.
Contractor has purchased equipment (pedestrian barrier) through the contract. Project now complete and barrier is in good condition and could be utilised by the client. Contractor is claiming that as this is equipment (not plant or materials), title is with contractor.
Equipment has residual value, should this be deducted from defined cost, can client claim the equipment as they have paid for them or is title with contractor?
2 Likes
Interesting question. The definition of Equipment 11.2(7) makes it clear that these are items used by him to Provide the Works and which the Works Information does not require him to include the works.
There presumably is no requirement in the Works Information for the pedestrian barriers to be provided as part of the works.
This being the case the way that the contract envisages that this is dealt with is under SCC cost component 23 Payments for Equipment for work included in this contract listed with a time-related on cost charge in the Contract Data of the change in value over the period and the time related on cost. The change in value is the difference between the purchase price and either the sale price or the open market sale price.
So either you revert to how this Equipment should of have been paid for in the SCC 23 and the Employer is credited with the sale price or open market sale price.
Or if the Employer has truly paid fully for this then the Contractor ought to let the Employer have the pedestrian barriers.
If the Employer has paid for this Equipment rather than it being charged or hired over a time period then the Employer then the Employer would seem to have a good case to state that the ownership of the Equipment should rest with the Employer.
Barry,
If the barriers in question were temporary plastic barriers that were not listed in the contract data as required for 23 of SCC then would you then agree that the barriers should be dealt with as described under cost component 22 in SCC?
Thanks, Phil
That seems a sensible conclusion.