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“Employer’s Equipment and Free-Issue Material” 🆚 “Employer-Supplied Materials and Employer’s Equipment”
1️⃣ Purpose of the Clause — What’s This All About?
Let’s start with why this clause exists in the first place.
📘 1999 Edition – Clause 4.20
“The Employer shall make the Employer’s Equipment (if any) available for the use of the Contractor in the execution of the Works in accordance with the details, arrangements and prices stated in the Contract. Unless otherwise stated in the Contract, the Employer shall supply, free of charge, the ‘free-issue materials’ (if any) in accordance with the Employer’s Requirements. The Contractor shall be responsible for each item of Employer’s Equipment and free-issue material from the time it is taken over by the Contractor until it is returned to the Employer.”
In this edition, Clause 4.20 kicks in when the Employer provides key materials or equipment — at no cost — to the Contractor. This could be anything from mechanical components to specialized devices that the Employer prefers to source directly. The important takeaway is responsibility: once the Contractor receives these items, they assume full responsibility for their safekeeping and appropriate use.
It aims to:
- 🛠 Let the Employer supply high-value or sensitive materials.
- ⚖️ Transfer all risk to the Contractor upon delivery.
- 🧾 Stay silent on protocols for handover, inspection, or insurance.
This lean structure, while simple, creates ambiguity — especially in the event of damage or dispute.
📙 2017 Edition – Clause 2.6
“The Employer shall provide to the Contractor, free of charge, the Employer-Supplied Materials and/or Employer’s Equipment (if any), in accordance with the details, arrangements and timing stated in the Contract Data. The Contractor shall be responsible for each item of Employer-Supplied Materials and Employer’s Equipment from the time it is delivered to, or taken over by, the Contractor until it is returned to the Employer, or otherwise disposed of, in accordance with the Engineer’s instructions. The Contractor shall provide appropriate storage and protection and shall use them only for the purposes of the Contract. The Contractor shall notify the Engineer immediately if any item is lost, damaged, defective, or not as stated in the Contract Data.”
This version moves the clause to the Employer’s side of the contract — which makes more sense — and upgrades both language and structure. It adds:
- 📋 Clear documentation via Contract Data.
- 🔔 Immediate notification obligation for problems.
- 🔐 Storage/security obligations.
- 🔄 Return or disposal based on Engineer’s instructions.
The 2017 edition makes it easier to manage risk and avoid finger-pointing later on.
2️⃣ Breakdown of the Clause – What Does It Actually Say?
📘 1999 Edition – Clause 4.20: The Essentials
The clause is brief but significant. It confirms that once Employer-supplied goods are in the Contractor’s hands, so is the risk.
What it says:
- Employer may supply equipment or materials.
- Contractor is liable once possession is taken.
- No mention of inspection or notice procedures.
What it doesn’t say is often more important:
- How to document delivery?
- What if items are damaged upon arrival?
- Who insures these?
This lack of guidance opens doors to disputes and misunderstandings.
📙 2017 Edition – Clause 2.6: A Smarter Approach
Here’s where structure meets practicality.
Key inclusions:
- 🧾 Reference to Contract Data for clarity.
- 🔐 Storage and handling must meet specified standards.
- 🔔 Mandatory immediate notification of any defects or loss.
- 📵 Use only for project-specific needs.
- 🔁 Return/disposal as per Engineer’s instructions.
By adding these mechanisms, the clause reduces risk and strengthens project controls.
3️⃣ Key Interpretations and Implications
🚨 Critical Points Across Both Editions
✅ Contractor’s Responsibilities
- Safe custody and handling from moment of receipt.
- Use only for the Works.
- Cover losses/damage unless promptly reported (2017 only).
🔍 Risk of Ambiguity (1999)
- No built-in mechanism for condition assessment.
- No guidance on what happens if something is missing or defective.
- 2017 fixes this by introducing formal notification and documentation.
4️⃣ Cross-Referencing with Other Clauses – How They Interact
| Clause | Role |
|---|---|
| Clause 18/19 (Insurance) | 2017 better connects these obligations with insurance responsibilities. |
| Clause 4.17 (Contractor’s Equipment) | Helps distinguish between Employer-supplied and Contractor-owned items. |
| Clause 20 (Claims) | If Employer delays supply, Contractor can claim time or money — especially in 2017. |
| Clause 13.5 (Daywork) | Relevance if Employer materials are used in work measured on a daywork basis. |
5️⃣ What If Scenarios – Let’s Make It Real
🧪 Scenario 1: Theft of Employer-Supplied Generator
- 1999: Contractor pays — no formal review or exception process.
- 2017: If the Contractor reported inadequate delivery conditions, they may shift liability.
🧪 Scenario 2: Supplied Steel is Warped
- 1999: No formal notice system — could be blamed later.
- 2017: Must notify the Engineer immediately — paper trail protects the Contractor.
🧪 Scenario 3: Delivery Delay by Employer
- Both editions allow Contractor to seek EOT and/or Cost.
- Clause 20 would be the route for claims.
6️⃣ Suggestions for Clarity and Improvement
💡 For 1999 Users
- Add procedures for inspection and delivery notes.
- Clarify insurance responsibilities.
- Use Particular Conditions to expand documentation obligations.
💡 For 2017 Users
- Ensure Contract Data clearly lists each supplied item.
- Add a template for delivery reports and notices.
- Specify turnaround time for Engineer responses.
7️⃣ Final Takeaways – What Should You Remember?
| 💡 Insight | 📝 Summary |
| 🎯 Purpose | Ensures clear transfer of responsibility for Employer-supplied items. |
| 🔍 Key Evolution | 2017 adds formal processes to reduce ambiguity. |
| 🚨 Risk Transfer | Contractor assumes liability on delivery unless Engineer is notified otherwise. |
| 🧾 Admin Tip | Use Contract Data to track supplies and delivery condition. |
| 🔧 Best Practice | Always document, inspect, and notify — especially under 2017. |
📋 Checklist: Employer-Supplied Materials & Equipment
For Use with Clause 4.20 (1999) and Clause 2.6 (2017)
✅ Pre-Delivery Phase
| Task | Description | Applicable to |
|---|---|---|
| 🔍 Define Items in Contract | Ensure all Employer-supplied materials/equipment are clearly listed in the Contract (1999) or Contract Data (2017). | Both |
| 📑 Specify Delivery Terms | Confirm who is responsible for transport, timing, and handover conditions. | Both |
| 📌 Clarify Storage Requirements | Check if the contract defines how the Contractor should store or secure these items. | 2017 (stronger), advisable for 1999 |
| 📋 Create Handover Protocol Template | Prepare a checklist or form for item condition, quantity, and packaging status on delivery. | Recommended for both |
| 🛡 Confirm Insurance Responsibilities | Clarify in writing who insures the items during delivery and on-site. | Especially important in 1999 |
✅ Delivery & Handover Phase
| Task | Description | Applicable to |
|---|---|---|
| 🖊 Sign-Off on Delivery Note | Have both parties sign delivery documentation noting item count, condition, and any visible defects. | Both |
| 📸 Photograph Delivered Goods | Take photos as evidence of condition at handover. | Both |
| 🛠 Assign Storage Area | Allocate secure, weather-resistant space on-site for storage. | Mandatory in 2017 |
| 🔔 Immediate Notification | Notify the Engineer immediately if items are missing, damaged, or defective. | Mandatory in 2017, best practice in 1999 |
| 🔐 Label Clearly | Mark items as “Employer-Supplied” to avoid confusion with Contractor’s equipment. | Both |
✅ During Use
| Task | Description | Applicable to |
|---|---|---|
| 📆 Log Usage | Keep a record of when and how items are used in the Works. | Both |
| 📵 Use Only for the Contract | Ensure items are not used on other projects or for unrelated work. | Both, emphasized in 2017 |
| 🧼 Maintain & Protect | Keep items clean, covered, and protected from corrosion, theft, or environmental damage. | Both |
✅ Post-Use / Completion
| Task | Description | Applicable to |
|---|---|---|
| 🔁 Return Unused Items | Return any unused materials/equipment or dispose of them according to Engineer’s instructions. | Explicit in 2017 |
| 📑 Submit Return Report | Log all items returned, their condition, and who signed for them. | Both |
| 🔍 Final Inspection | Jointly inspect returned items with the Employer’s team. | Both |
| 🧾 Close-Out Documentation | Archive all delivery, usage, and return records for final audit or dispute resolution. | Both |
📩 Sample Letter
📩 Sample Letter 1: Acknowledgment of Receipt of Employer-Supplied Materials
Subject: Acknowledgment of Receipt of Employer-Supplied Materials
To: The Engineer
Cc: Employer’s Representative
Date: [Insert Date]
Contract: [Project Name & Contract Number]
Clause Reference: Clause 4.20 (1999) / Clause 2.6 (2017)
Dear [Engineer’s Name],
We hereby acknowledge the receipt of the following Employer-supplied materials delivered to the Site on [insert date]:
- [Item 1 Description, Quantity]
- [Item 2 Description, Quantity]
The delivery was inspected upon arrival. No visible damages or discrepancies were observed. These materials have been moved to a designated, secure storage area and will be used solely for the execution of the Works.
We confirm our understanding that, under the terms of the Contract, responsibility for these items is now transferred to us, and we shall take all necessary precautions for their safekeeping and appropriate use.
Please confirm receipt of this acknowledgment.
Yours faithfully,
[Contractor’s Name]
[Authorized Representative]
[Title]
📩 Sample Letter 2: Notification of Damaged Employer-Supplied Material
Subject: Notification of Damage to Employer-Supplied Material Upon Delivery
To: The Engineer
Cc: Employer’s Representative
Date: [Insert Date]
Contract: [Project Name & Contract Number]
Clause Reference: Clause 4.20 (1999) / Clause 2.6 (2017)
Dear [Engineer’s Name],
We refer to the delivery of [describe item] made on [insert date], as part of the Employer-supplied materials under the Contract.
During inspection at the point of receipt, the following issue was observed:
- [Item Name]: [Describe nature of damage/defect – e.g., bent frame, missing parts]
Photographs and a signed delivery report are attached herewith for your records.
We kindly request instructions on whether this item should be:
- Returned to the Employer,
- Set aside for later inspection, or
- Used conditionally pending your determination.
In the interim, we have secured the item and isolated it from active use in the Works.
We await your urgent guidance in this matter.
Yours faithfully,
[Contractor’s Name]
[Authorized Representative]
[Title]
📩 Sample Letter 3: Request for Clarification on Non-Delivery of Employer-Supplied Equipment
Subject: Request for Clarification – Delay in Delivery of Employer-Supplied Equipment
To: The Engineer
Cc: Employer’s Representative
Date: [Insert Date]
Contract: [Project Name & Contract Number]
Clause Reference: Clause 4.20 (1999) / Clause 2.6 (2017)
Dear [Engineer’s Name],
We write to highlight that, as of the date of this letter, we have not received the following Employer-supplied equipment listed in the Contract/Contract Data:
- [Item Description, expected delivery date]
This delay may impact the progress of the following work activities:
- [List impacted activities and dates]
We respectfully request an update on the expected delivery timeline and whether any mitigation measures are available. Kindly note that in accordance with Clause 20 [Claims], we may be entitled to an extension of time and/or additional cost arising from this delay.
We look forward to your prompt response.
Yours faithfully,
[Contractor’s Name]
[Authorized Representative]
[Title]