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How do you classify Operated Cranes: Sub-contract or Equipment

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If a main contractor hires a crane with an operator and appointed person is this classed as: A sub-contract under clause 11.2 (17), Equipment as defined in the SOCC, Charges as defined in the SOCC, or an other cost heading?
asked Jun 7, 2013 in SOCC SSOCC by John X. Birchall (400 points)  
edited Jun 26, 2013 by John X. Birchall

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The answer is going to depend on the nature of the contract you have with the crane supplier.  Has he got a contract to lift a specific item(s) at a specific price(s), regardless of how long it takes.  In other words is he taking the risk, in that he is only paid if he carries out the lift?  If so he falls within the the 2nd bullet of 11.2(17) and is a Subcontractor.

If he has a price to hire a crane and people to you to do what you tell them, and takes no risk as to the costs of the lifting then he is not a Subcontractor.  All he has is a contract to hire you a crane and some people.  In that case the crane will be Equipment and paid for at the hire rate.  (SCC 21).  If the people are included in the hire rate there is no further charge for them, otherwise they are paid for as people (SCC 28 & 14).
answered Jun 13, 2013 by Peterc10 (190 points)  
selected Jun 25, 2013 by John X. Birchall
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I am assuming from the wording in your question that the crane and operator were hired on a time charge basis to do work as directed by the Contractor.

Contractually, it could fall into the definition of a Subcontractor as there is a contract to "provide a service necessary to Provide the Works".

Where the panel who developed the third edition would like to see the crane is as "Equipment" which is defined in clause 11.2(7) as "items provided by the Contractor and used by him to Provide the Works and which the Works Information does not require him to include in the works." As this is more explicit than the previous definition, it is far more likely to be considered Equipment than a Subcontractor in my view.

Consequently, the crane would be paid  for as Equipment in the Schedule of Cost Components (SOCC). Do note clause 28 in the SOCC, which states "Unless included in the hire rates, the cost of operatives is included in the cost people".

I cannot think of a reason why it would be in Charges !
answered Jun 10, 2013 by Jon Broome Panel Members (56,550 points)