Delays in the supply of some parts or materials for building projects can cause delays to the building program with the result that completion of the project can be delayed, causing inconvenience and sometimes cost to the owner and creating a potential area for dispute. Delayed supply of materials, components or parts can also encourage contractors to propose substitutions that may not be acceptable or desirable.
Ordering parts and materials required in a building project in time for their use is generally the contractor's responsibility, and actions that shift the responsibility to the client should be considered carefully as they can lead to unclear lines of responsibility and the subsequent risk of disputes.
In order to minimise problems due to delay in the supply of parts and materials during the construction phase of a project, it is worth considering the following points at an early stage in the design and documentation process:
- understand the lead times required for the supply of parts and materials that are to be ordered, manufactured or imported for the project
- minimise selecting and specifying items or materials that need to be imported
- ensure the contractor provides a construction program reflecting dates and lead times for ordering parts and materials that need to be manufactured or imported
- consider using provisional sum for the special or imported items, so that, if it is necessary to change or cancel the order, the monetary amount is more easily identified
- recommend to your client that either they or the contractor make provision for separate insurance arrangements for special items to cover transit or off-site storage
- if a delay in the item(s) could have a severe impact on the contract, consider a risk-sharing agreement defined in a special condition of contract, outlining how delay costs are to be apportioned between the owner and the contractor.
If you recommend (or your client decides) that the contractor should not supply specific parts and materials under the building contract, appropriate consideration should be given to the following:
- whether the client should order, purchase and supply the parts and materials through a separate supply contract prior to the building contract being let, thereby minimising the risk of delay and in the process, saving the contractor's overhead and profit on that item
- should your client decide to order the part or material themselves, make them aware of the potential for delays to the project and the possibility of delay costs being claimed by the contractor, if such parts or materials are not available when required by the contractor.
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