Payments to nominated sub-contractors - Revision history

Designing Buildings at 06:39, 13 October 2020

2020-10-13T06:39:19Z

← Older revision		Revision as of 06:39, 13 October 2020
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	* Remedies for late payment.		* Remedies for late payment.

−	[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Guidance]] [[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 16:20, 31 May 2019

2019-05-31T16:20:54Z

← Older revision		Revision as of 16:20, 31 May 2019
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	As the contractor has no choice in the selection of the nominated sub-contractor, they cannot be held responsible for failure of the nominated sub-contractor to perform. However, as the contract for the nominated sub-contractor is with the main contractor, not with the client, the client should ensure that they have a direct warranty with the nominated sub-contractor to guarantee performance and to indemnify the client if any default allows a claim for loss and expense or extension of time by the main contractor.		As the contractor has no choice in the selection of the nominated sub-contractor, they cannot be held responsible for failure of the nominated sub-contractor to perform. However, as the contract for the nominated sub-contractor is with the main contractor, not with the client, the client should ensure that they have a direct warranty with the nominated sub-contractor to guarantee performance and to indemnify the client if any default allows a claim for loss and expense or extension of time by the main contractor.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Construction supply chain payment charter.		* Construction supply chain payment charter.
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	* Nominated subcontractor v named subcontractor.		* Nominated subcontractor v named subcontractor.
	* Nominated supplier.		* Nominated supplier.
		+	* Payment period.
	* Prime cost sum.		* Prime cost sum.
	* Procurement route.		* Procurement route.

Designing Buildings at 09:07, 18 June 2018

2018-06-18T09:07:24Z

← Older revision		Revision as of 09:07, 18 June 2018
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	* Named sub-contractor.		* Named sub-contractor.
	* Nominated sub-contractor.		* Nominated sub-contractor.
		+	* Nominated subcontractor v named subcontractor.
	* Nominated supplier.		* Nominated supplier.
	* Prime cost sum.		* Prime cost sum.

Editor at 14:04, 26 March 2018

2018-03-26T14:04:39Z

← Older revision		Revision as of 14:04, 26 March 2018
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	* Fair payment practices.		* Fair payment practices.
	* Interim certificates.		* Interim certificates.
		+	* Main contractor’s discount.
	* Named sub-contractor.		* Named sub-contractor.
	* Nominated sub-contractor.		* Nominated sub-contractor.

Editor at 13:26, 3 January 2018

2018-01-03T13:26:45Z

← Older revision		Revision as of 13:26, 3 January 2018
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	There is no direct contractual relationship between the client and the nominated sub-contractor.		There is no direct contractual relationship between the client and the nominated sub-contractor.

−	The main contractor is instructed by the client to use a nominated sub-contractor for a particular element of the works through the inclusion of a prime cost sum (based on the nominated sub-contractor’s accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding and so on).	+	The main contractor is instructed by the client to use a nominated sub-contractor for a particular element of the works through the inclusion of a prime cost sum (based on the nominated sub-contractor’s accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding, and so on).

	The main contractor should specify the general preliminaries available to the nominated sub-contractor, and specific items of preliminaries to be provided by the sub-contractor.		The main contractor should specify the general preliminaries available to the nominated sub-contractor, and specific items of preliminaries to be provided by the sub-contractor.
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	* Named sub-contractor.		* Named sub-contractor.
	* Nominated sub-contractor.		* Nominated sub-contractor.
		+	* Nominated supplier.
	* Prime cost sum.		* Prime cost sum.
	* Procurement route.		* Procurement route.

Designing Buildings at 10:09, 18 May 2017

2017-05-18T10:09:34Z

← Older revision		Revision as of 10:09, 18 May 2017
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	A nominated sub-contractor is one that is selected by the client to carry out an element of the works and then imposed on the main contractor after the main contractor has been appointed. This allows the client to have direct, separate negotiations with major suppliers of goods or services and feed their appointment and design input into the contract after works by the main contractor have commenced.		A nominated sub-contractor is one that is selected by the client to carry out an element of the works and then imposed on the main contractor after the main contractor has been appointed. This allows the client to have direct, separate negotiations with major suppliers of goods or services and feed their appointment and design input into the contract after works by the main contractor have commenced.

−	There is no direct contractual relationship between the client and the nominated ~~subcontractor~~.	+	There is no direct contractual relationship between the client and the nominated sub-contractor.

−	The main contractor is instructed by the client to use a nominated ~~subcontractor~~ for a particular element of the works through the inclusion of a prime cost sum (based on the nominated ~~subcontractor’s~~ accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding and so on).	+	The main contractor is instructed by the client to use a nominated sub-contractor for a particular element of the works through the inclusion of a prime cost sum (based on the nominated sub-contractor’s accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding and so on).

	The main contractor should specify the general preliminaries available to the nominated sub-contractor, and specific items of preliminaries to be provided by the sub-contractor.		The main contractor should specify the general preliminaries available to the nominated sub-contractor, and specific items of preliminaries to be provided by the sub-contractor.
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	Before any order is placed the main contractor should be consulted as to whether the sub-contractor's proposals are acceptable, including matters relating to preliminaries.		Before any order is placed the main contractor should be consulted as to whether the sub-contractor's proposals are acceptable, including matters relating to preliminaries.

−	When the nominated ~~subcontractor~~ works are being carried out, the client’s cost consultant will periodically value their work and the amount properly due is then shown as a separate amount on interim certificates. This amount is also notified to the nominated sub-contractor.	+	When the nominated sub-contractor works are being carried out, the client’s cost consultant will periodically value their work and the amount properly due is then shown as a separate amount on interim certificates. This amount is also notified to the nominated sub-contractor.

−	The contractor must then pay the nominated ~~subcontractor~~ the certified amount. The contract may allow the client to pay the nominated sub-contractor directly if the main contractor fails to do so.	+	The contractor must then pay the nominated sub-contractor the certified amount. The contract may allow the client to pay the nominated sub-contractor directly if the main contractor fails to do so.

	As the contractor has no choice in the selection of the nominated sub-contractor, they cannot be held responsible for failure of the nominated sub-contractor to perform. However, as the contract for the nominated sub-contractor is with the main contractor, not with the client, the client should ensure that they have a direct warranty with the nominated sub-contractor to guarantee performance and to indemnify the client if any default allows a claim for loss and expense or extension of time by the main contractor.		As the contractor has no choice in the selection of the nominated sub-contractor, they cannot be held responsible for failure of the nominated sub-contractor to perform. However, as the contract for the nominated sub-contractor is with the main contractor, not with the client, the client should ensure that they have a direct warranty with the nominated sub-contractor to guarantee performance and to indemnify the client if any default allows a claim for loss and expense or extension of time by the main contractor.

Designing Buildings at 10:08, 18 May 2017

2017-05-18T10:08:45Z

← Older revision		Revision as of 10:08, 18 May 2017
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	A nominated sub-contractor is one that is selected by the client to carry out an element of the works and then imposed on the main contractor after the main contractor has been appointed. This allows the client to have direct, separate negotiations with major suppliers of goods or services and feed their appointment and design input into the contract after works by the main contractor have commenced.		A nominated sub-contractor is one that is selected by the client to carry out an element of the works and then imposed on the main contractor after the main contractor has been appointed. This allows the client to have direct, separate negotiations with major suppliers of goods or services and feed their appointment and design input into the contract after works by the main contractor have commenced.

−	~~A main contractor may be instructed by~~ the client ~~to use a nominated subcontractor for a particular element of the works, such as piling, M&E, structural frame,~~ and ~~so on. The mechanism for nominating is an instruction in relation to a prime cost sum (based on~~ the nominated ~~subcontractor’s accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding, disposal, etc.)~~.	+	There is no direct contractual relationship between the client and the nominated subcontractor.

−	The ~~client’s cost consultant or quantity surveyor values~~ the ~~work~~ of the ~~nominated sub-contractor separately and~~ the ~~amount due is shown as~~ a ~~separate amount~~ on ~~the interim certificate and notified to~~ the nominated ~~sub-contractor. The contract may allow the client~~ to ~~pay the nominated sub-contractor directly if~~ the main contractor ~~fails~~ to do so.	+	The main contractor is instructed by the client to use a nominated subcontractor for a particular element of the works through the inclusion of a prime cost sum (based on the nominated subcontractor’s accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding and so on).

−	The ~~subcontractor benefits from nomination by having much greater certainty of payment, as in the event that the~~ main contractor ~~does not pay by~~ the ~~due date~~, ~~they are entitled~~ to ~~ask for payment direct from~~ the ~~client~~.	+	The main contractor should specify the general preliminaries available to the nominated sub-contractor, and specific items of preliminaries to be provided by the sub-contractor.

−	~~Despite the nominated subcontractor’s scope of work, terms and price of services being provided frequently being pre-negotiated by the client, there~~ is ~~no direct contractual relationship between them. Instead, there may be a signed agreement which is transferred to~~ the main contractor ~~or simply an obligation on~~ the contractor to ~~use the nominated subcontractor~~.	+	Before any order is placed the main contractor should be consulted as to whether the sub-contractor's proposals are acceptable, including matters relating to preliminaries.

−	~~Whereas a main contractor is liable to~~ the ~~client for any defaults that may arise from domestic and/or named subcontractors~~, the ~~legal liabilities with regard to nominated subcontractors is not so straightforward. Depending on the circumstances~~ and the ~~terms used in the main contract, the main contractor may not be liable for defaults~~ on ~~the part of~~ the nominated ~~subcontractor~~.	+	When the nominated subcontractor works are being carried out, the client’s cost consultant will periodically value their work and the amount properly due is then shown as a separate amount on interim certificates. This amount is also notified to the nominated sub-contractor.

−	~~However,~~ the nominated subcontractor ~~is still in~~ contract ~~with~~ the ~~main~~ contractor ~~and as such, in~~ the ~~event of an upstream insolvency, has little protection available~~.	+	The contractor must then pay the nominated subcontractor the certified amount. The contract may allow the client to pay the nominated sub-contractor directly if the main contractor fails to do so.

−	~~Nominated subcontracts are increasingly infrequent~~ in ~~construction~~, with ~~named subcontracts taking precedence~~.	+	As the contractor has no choice in the selection of the nominated sub-contractor, they cannot be held responsible for failure of the nominated sub-contractor to perform. However, as the contract for the nominated sub-contractor is with the main contractor, not with the client, the client should ensure that they have a direct warranty with the nominated sub-contractor to guarantee performance and to indemnify the client if any default allows a claim for loss and expense or extension of time by the main contractor.

	= Find out more =		= Find out more =

Designing Buildings at 09:51, 18 May 2017

2017-05-18T09:51:22Z

← Older revision		Revision as of 09:51, 18 May 2017
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−	A nominated sub-contractor~~, or supplier,~~ is one that is selected by the client to carry out an element of the works~~. Nominated sub-contractors are~~ imposed on the main contractor after the main contractor has been appointed. ~~They are normally used where~~ the ~~design~~ of the works is the ~~responsibility of the client~~.	+	A nominated sub-contractor is one that is selected by the client to carry out an element of the works and then imposed on the main contractor after the main contractor has been appointed. This allows the client to have direct, separate negotiations with major suppliers of goods or services and feed their appointment and design input into the contract after works by the main contractor have commenced.

−	~~The~~ main contractor is instructed by the client~~, through the architect,~~ to use ~~the~~ nominated subcontractor for an element of ~~work~~, such as piling, M&E, structural frame, and ~~such like~~. The ~~quotation given~~ to the ~~client for the work must be used by the main contractor as the subcontract sum.~~	+	A main contractor may be instructed by the client to use a nominated subcontractor for a particular element of the works, such as piling, M&E, structural frame, and so on. The mechanism for nominating is an instruction in relation to a prime cost sum (based on the nominated subcontractor’s accepted quotation) to which the main contractor is entitled to add mark up and attendance costs (such as material handling, use of site facilities, scaffolding, disposal, etc.).
−		+
−	~~These particular works are usually identified as ‘prime cost’ work,~~ to which the main contractor is entitled to add ~~their profit margin, overheads~~ and attendance costs (~~i.e.~~ material handling, use of site facilities, scaffolding, disposal, etc.)~~. Instead of the value of the prime cost sum being included in the contractor’s bill of quantities, the nominated subcontractor’s accepted quotation is included instead~~.	+

	The client’s cost consultant or quantity surveyor values the work of the nominated sub-contractor separately and the amount due is shown as a separate amount on the interim certificate and notified to the nominated sub-contractor. The contract may allow the client to pay the nominated sub-contractor directly if the main contractor fails to do so.		The client’s cost consultant or quantity surveyor values the work of the nominated sub-contractor separately and the amount due is shown as a separate amount on the interim certificate and notified to the nominated sub-contractor. The contract may allow the client to pay the nominated sub-contractor directly if the main contractor fails to do so.

Editor: Created page with "A nominated sub-contractor, or supplier, is one that is selected by the client to carry out an element of the works. Nominated sub-contractors are imposed on the main contractor ..."

2017-05-17T10:42:21Z

Created page with "A nominated sub-contractor, or supplier, is one that is selected by the client to carry out an element of the works. Nominated sub-contractors are imposed on the main contractor ..."

New page

A nominated sub-contractor, or supplier, is one that is selected by the client to carry out an element of the works. Nominated sub-contractors are imposed on the main contractor after the main contractor has been appointed. They are normally used where the design of the works is the responsibility of the client.

The main contractor is instructed by the client, through the architect, to use the nominated subcontractor for an element of work, such as piling, M&E, structural frame, and such like. The quotation given to the client for the work must be used by the main contractor as the subcontract sum.

These particular works are usually identified as ‘prime cost’ work, to which the main contractor is entitled to add their profit margin, overheads and attendance costs (i.e. material handling, use of site facilities, scaffolding, disposal, etc.). Instead of the value of the prime cost sum being included in the contractor’s bill of quantities, the nominated subcontractor’s accepted quotation is included instead.

The client’s cost consultant or quantity surveyor values the work of the nominated sub-contractor separately and the amount due is shown as a separate amount on the interim certificate and notified to the nominated sub-contractor. The contract may allow the client to pay the nominated sub-contractor directly if the main contractor fails to do so.

The subcontractor benefits from nomination by having much greater certainty of payment, as in the event that the main contractor does not pay by the due date, they are entitled to ask for payment direct from the client.

Despite the nominated subcontractor’s scope of work, terms and price of services being provided frequently being pre-negotiated by the client, there is no direct contractual relationship between them. Instead, there may be a signed agreement which is transferred to the main contractor or simply an obligation on the contractor to use the nominated subcontractor.

Whereas a main contractor is liable to the client for any defaults that may arise from domestic and/or named subcontractors, the legal liabilities with regard to nominated subcontractors is not so straightforward. Depending on the circumstances and the terms used in the main contract, the main contractor may not be liable for defaults on the part of the nominated subcontractor.

However, the nominated subcontractor is still in contract with the main contractor and as such, in the event of an upstream insolvency, has little protection available.

Nominated subcontracts are increasingly infrequent in construction, with named subcontracts taking precedence.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Construction supply chain payment charter.
* Domestic sub-contractor.
* Fair payment practices.
* Interim certificates.
* Named sub-contractor.
* Nominated sub-contractor.
* Prime cost sum.
* Procurement route.
* Remedies for late payment.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]