Given the current lockdown, we are in a situation where the Supervisor is unable to visit materials off-site in order to mark them (70.1). Does this mean that there is no way to pass title to the Client?
My concern is that we have to pay for the items off-site under Option C, but have no way of protecting the Client should the manufacturer go out of business and the cost has already been paid to the Contractor.
An alternative would be to include in the Working Areas the off-site areas where materials are being stored through a clause 15.1 (NEC3) or clause 16.3 (NEC4) proposal. This means that title for these off-site materials will pass to the Employer / Client in the usual way i.e. when the materials are brought within Working Areas AND when the Contractor has title e.g. paid for them.
In the event of insolvency you should then be able to prove that the manufacturer no longer has title to the materials as they are owned by the Employer / Client.
Note that the Contractor is still responsible for insuring the off-site materials in the same way that it is responsible for insuring the works until they are taken over. As such in the event of loss caused by insolvency this would be an insurable event and the cost would be deducted from Defined Cost (i.e. the replacement cost) under component 7 (NEC3) or 8 (NEC4) of the Schedule of Cost Components.
If adding the manufacturer’s areas to Working Areas is not acceptable to the PM then you will need to look at alternatives such as having the materials delivered to Site or delivered the Contractor’s premises (which may then also need adding to Working Areas) . A last resort would be to make a separate agreement with the Employer / Client outside the contract for them to pay for them directly and effectively free-issue them to the Contractor however this approach would see you lose your Fee on the Defined Cost and conceded a negative CE for the reduced Defined Cost plus Fee.
Hi @Neil_Earnshaw Neil, thanks for your answer.
However I am a little lost on the " lose your fee" aspect.
Could you expand on this(as it makes it sound like you were speaking from the contractor’s perspective)
@s.etti I was referring to the fact that if the Contractor procures the materials the Client pays the Contractor the Defined Cost plus Fee, however if the Client procures them they would pay the Defined Cost to directly to the supplier and there would be no Fee to pay to the Contractor.
@Neil_Earnshaw understood, thanks for clarifying 