under NEC Option E Cost Reimbursable, is there a clause that states either party has a ‘duty’ to purchase plant rather than hire across the duration of the job?
For example across a 6 month job the hire of a piece of plant may cost say £100k whereas to buy that plant it might cost £60k for example. Is there a clause that states this must be considered by either party at all?
I’m assuming you’re using NEC4 however the answer is the same if you are using NEC3, its just the clause references that would change.
No there is no clause in the contract requiring this. If the Client wants to buy the plant and free-issue it to the Contractor then the Project Manager can instruct the Contractor to purchase the item under clause 14.3 however you need to think about more than just the financial saving of this approach. If the plant is owned by the Client, they will also be responsible for servicing and maintaining it and potentially be liable for the health and safety of anyone harmed by the plant if it failed.
In NEC what you call plant is actually defined as ‘Equipment’ i.e. ‘items provided and used by the Contractor to Provide the Works and which the Scope does not require the Contractor to include in the works’ - NEC4 ECC clause 11.2(9). Items included in the works are defined as ‘Plant and Materials’. The Client wouldn’t ordinarily own Equipment as clause 70 only allows title to pass for Plant and Materials and clause 72 requires the Contractor to remove Equipment from the Site when it is no longer needed.
The instruction would allow the Equipment to be classed as Plant and Materials and enable the Contractor to be paid for buying it via the associated compensation event however the Client needs to make sure they understand the risks that come with this approach.