Project managment

Payment for materials manufactured off site

The ICE conditions also permit payment on account to be made for items which are manufactured off site (Clauses 54 and 60(1)(c)). This provision is intended primarily to cover mechanical or electrical equipment or prefabricated steelwork which the contractor has to supply for incorporation in the works. He will usually use a specialist manufacturer to supply such items.
It is advantageous to the progress of the job for all such items to be manufactured and made ready for delivery in advance of the date planned for their incorporation in the works, hence payment for items manufactured off site encourages this.
However, only items listed in an appendix to the tender documents are to rank for on-account payment, that is, the contract pre-determines the equipment or plant to which the provision relates. Also two further conditions have to be complied with: (a) the equipment or plant must be ready for dispatch;
(b) the ownership of it must be transferred from manufacturer to contractor, and then from contractor to employer. Clause 54 of the ICE conditions sets out the details of the procedure required.
Clearly before any payment on account can be made, the engineer or resident engineer will need to arrange for the manufacturer to be visited so that the plant to be supplied can be inspected to ensure it conforms satisfactorily to specification and all necessary tests before delivery. Evidence of the proper transfer of ownership, and sundry arrangements for storage, insurance, etc.
will also be required.

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