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NEC ECC: Title when advance payment wasn't envisaged
Involved in a NEC3 option C contract. The Contractor is seeking advance payment for Plant & Materials that won't be within the Working Areas for a large portion of the contract. The Works Information is silent on the marking of Equipment, Plant & Materials - basically it was never envisaged that the type of materials being purchased would require advance payment. How can clauses 70 & 71 apply in this case?
To compound matters the advance payment is being made to a supplier of a Subcontractor. Clearly the Employer is concerned that should the supplier go bust there's a risk that monies paid to acquire materials will be swallowed up by other creditors.
Jun 19, 2019
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I think in this instance the Employer has every right to be concerned as they are quite remote from the actual Plant and Materials, with payment presumably going through a supply chain of several parties and (hopefully) ending up with the eventual supplier. If the supplier is not in the UK then the risk to the Employer are increased further
You could use a vesting certificate but I'm not sure that in reality that would give much protection in the event of insolvency of one of the parties involved.
Consider the Employer directly contracting with the Supplier for the purchase Also consider the security arrangements, such as warranties or bonds, which may provide protection to the Employer for the Contractor fulfilling their obligations under the contract.
Jun 20, 2019
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