Project managment

Difficulties with nominated sub-contractors or suppliers

The use of nominated sub-contractors or nominated suppliers can cause many problems because the engineer cannot interfere in the terms of the subcontract (see Section 15.8). The sub-contractor or supplier may refuse the subcontract because of disagreement with the contractor on liability for damages (see Section 7.8), trade discount and terms of payment, or some extra charge the contractor wants to make for services he provides. Sometimes a sub-contractor refuses to accept an order from the contractor for reasons he will not disclose – usually due to some past experience with the contractor. Although some problems can be overcome by careful detailing of all necessary provisions in the specification, there is never any certainty the sub-contract will be signed. If not signed the purpose of nomination is frustrated, and re-nomination may be necessary causing the programme to be disrupted.
To avoid the problems of nomination the specification can specify the work required and leave the choice of sub-contractor to the contractor; with the proviso that the sub-contractor must be approved by the engineer. Nominated suppliers can also be avoided by specifying items, where possible – ‘As Messrs.
XYZ’s product or similar’– leaving the onus on the contractor to choose his source of supplier.
But this is not always possible when, for instance, the employer wishes to use facing bricks available from only one supplier. An alternative then is for the employer to place the order for the bricks direct with the supplier, making arrangements for their offloading and stacking; with the engineer denoting in the contract for construction where the contractor is to find such bricks, etc.
The resident engineer needs to ensure all such arrangements are being made in due time to avoid delay to the contractor.
Fortunately many small items to be supplied by nominated suppliers are not crucial to the contractor’s programme, or not required until the finishing stages of the contract. These usually do not give rise to many problems, and the contractor can be encouraged to order them in good time by the engineer certifying part payment of their value under ‘materials on site’.

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