Named supplier in construction contracts
Naming suppliers allows the client to influence the main contractor's selection of suppliers, whilst leaving responsibility for their performance with the main contractor.
To name suppliers, the client first identifies a list of potential suppliers. They may invite these potential suppliers to submit tenders. The client then names a short-list of acceptable suppliers in the tender documents for the main construction contract. The tender documents allow for the named suppliers by including a provisional sum.
When tendering for the main contract, the main contractor makes allowances for mark up, attendance and programme in relation to the named suppliers. Once appointed, the successful contractor seeks tenders from the named suppliers (although they may reasonably object to any of them). If the client previously sought tenders form the named suppliers, they may pass these on to the main contractor, although it is the responsibility of the main contractor to negotiate an actual price.
Once the main contractor has selected and appointed a supplier, the provisional sum is replaced with the actual price agreed.
The main contractor pays the named supplier and the main contractor is responsible for their works. However, if the materials or goods supplied turn out not to be fit for purpose, then whoever named them will be responsible, not the contractor, unless the contractor was able to choose from a number of products available from the named supplier and they selected one that was unfit for purpose when others were available.
On public sector projects, a supply contract for which the client intends to provide a named list of possible suppliers may be subject to the requirements of the OJEU procurement rules.
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