Bonds, Insurance, & Liability
Section F-6
Stored Construction Materials - Payment
When project materials are purchased in advance of their use, Contractors can assure a specified material is available for use in accordance with the construction schedule. In considering an equitable method of payment and transfer of title for stored construction materials, a basic distinction must be made between:
On-Site Materials: The Joint Committee recommends that payment should follow the provisions of the contract documents when materials are stored on site, provided that they are stored in a location that does not create obstacles to the progress of the project. Builder's Risk Insurance should cover this material once proper documentation has shown that the material has arrived on site. The Owner or Owner's Representative should have access to inspect the materials. The materials should be insured to protect the Owner's interests.
Off-Site Materials: The Joint Committee recommends that payment should be made to the Contractor for construction materials stored off site upon a showing, by the Contractor, that these materials have been identified, fabricated, and properly protected for use on the project and are merely awaiting convenient delivery for utilization. The Owner or Owner's Representative should have access to inspect the material. The materials should be insured to protect the Owner's interests.
In any case of discrepancy, the definition of On-Site and Off-Site materials contained herein is subject to the condition of the Contract and /or insurance provisions. Upon payment, title should be transferred to the Owner.
Glossary Terms for the Best Practices Guide
History of Recommendation:
Reviewed March, 2011
Revised July, 2010
Revised February, 1998
Revised May, 1987
Reviewed November, 1986
Approved November, 1977
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