Clause 1.1.5 – Works and Goods in FIDIC 1999 & 2017 Explained

🔑 Why is this clause so important?

Because if you don’t define clearly what’s meant by things like Plant, Materials, Contractor’s Equipment, or even Works themselves, it can lead to real confusion—and sometimes costly disputes. 😬

For example:

• If a piece of machinery is accidentally damaged, you need to know: was that Contractor’s Equipment or was it Plant forming part of the Permanent Works? Because that changes who bears the risk, and whose insurance needs to step in (see Clause 17 and 18/19).
• Or say the Contractor wants to get paid for materials stored on-site (Clause 14.5). Well, you better be clear whether those items qualify as Materials under this clause!

So, the purpose of Clause 1.1.5 is to:

• Create a shared understanding of key physical components used in the contract.
• Classify those items in a way that allocates responsibility, ownership, and risk appropriately.
• Serve as a foundation for interpreting related clauses across the contract—especially in areas like payment (Clause 14), insurance (Clause 18/19), and risk (Clause 17).

⚖️ Implications for the Parties

Let’s break this down party by party:

🏗️ For the Contractor:

• Knowing what counts as Contractor’s Equipment (vs. Plant) is critical because that affects insurance obligations, ownership rights, and whether costs are recoverable.
• The Contractor needs this clarity when preparing tenders, planning logistics, and submitting claims (especially under Clause 20.1 for delays or extra costs).
• If definitions are vague, it could lead to payment delays or rejected claims, especially when seeking reimbursement for Materials or Plant delivered but not yet installed.

🏢 For the Employer:

• The Employer needs a solid definition of what constitutes the Permanent Works, because that’s ultimately what they’re paying for and taking over.
• They’ll also rely on this clause when assessing ownership (e.g., under Clause 7.7), transfer of care, and responsibility for risks and defects.

👷 For the Engineer:

• Definitions help the Engineer properly assess Interim Payment Certificates (Clause 14.6), determine liability in case of damage (Clause 17.2), and administer the contract fairly (Clause 3.5).
• When a dispute arises—say, over whether a batch of delivered valves counts as Plant or just Materials—the Engineer will refer straight back to Clause 1.1.5 to clarify.

🧠 So, what does it really do?

Think of Clause 1.1.5 as the contract’s blueprint for categorizing “things” on your project. And that’s not just academic—it’s practical.

✅ It prevents misunderstandings by precisely defining the categories of goods and works.
✅ It establishes boundaries for ownership, responsibility, and payment.
✅ It forms the legal foundation for interpreting dozens of other operational clauses.

This clause may look dry at first glance, but it’s essentially the scaffolding upon which risk, price, and process are built.

2️⃣ Breakdown of Clause 1.1.5 – Works and Goods

You know how in every major project, there’s a big mix of machines, materials, and temporary structures flying around the site? The challenge is: not everything is meant to stay. Some things are permanent, some are support systems, some are the Contractor’s own tools—and each one has its own legal and practical implications.

That’s why FIDIC carefully defines what’s what in Clause 1.1.5. Think of it as the “casting call” for every physical actor on the construction stage. 🎭

Let’s go through each sub-definition in the clause one by one. I’ll show how they’re framed in both 📘 1999 and 📒 2017 editions—flagging any differences and explaining what they really mean on site.

🔧 1.1.5.1 – Contractor’s Equipment

📘 1999:

“Contractor’s Equipment means all apparatus, machinery, vehicles and other things required for the execution and completion of the Works and the remedying of any defects…”

📒 2017:

📜 Practically identical in wording and intent.

✅ Key Point: This includes everything from tower cranes to scaffolding that the Contractor brings in to perform the job—but it explicitly excludes:

• Temporary Works
• Employer’s Equipment
• Plant
• Materials

💬 Think of it this way: If the Contractor can pack it up and take it home after the job, and it’s not becoming part of the finished structure—it’s probably Contractor’s Equipment.

👷 Why it matters:

• It’s owned and insured by the Contractor (see Clause 19.2 in 2017 / 18.2 in 1999).
• If it gets damaged, that’s not the Employer’s problem.
• Cannot be claimed for payment under Clause 14.5 because it’s not part of the Works.

📦 1.1.5.2 – Goods

📘 and 📒:

“Goods means Contractor’s Equipment, Materials, Plant and Temporary Works, or any of them as appropriate.”

✅ This is a composite term. When FIDIC talks about “Goods”, it refers to the collective physical things being supplied or used—whether permanent or temporary.

💬 Handy for tendering and payment clauses, especially when you’re referring to general logistics, shipping, customs, or procurement in bulk.

🧱 1.1.5.3 – Materials

📘 and 📒:

“Materials means things of all kinds (other than Plant) intended to form or forming part of the Permanent Works, including the supply-only materials (if any)…”

🧠 Distinction from Plant: Materials are things like cement, bricks, steel rebar, cables, tiles—they’re not machines, but they’re essential to the structure.

💡 A key point: If you’re a Contractor and you’re delivering these to site, they may qualify for advance or interim payments—but only if they’re clearly classified as Materials and meet storage and documentation conditions (see Clause 14.5).

🏗️ 1.1.5.4 – Permanent Works

📘 and 📒:

“Permanent Works means the permanent works to be executed by the Contractor under the Contract.”

💬 Simple enough, right? But here’s the nuance:

• It includes everything that will remain when the job is done.
• Anything that becomes part of the final facility, system, or building = Permanent Works.
• It does not include Temporary Works or Contractor’s Equipment.

✅ This is the “end product” the Employer is paying for.

⚙️ 1.1.5.5 – Plant

📘 and 📒:

“Plant means the apparatus, machinery and vehicles intended to form or forming part of the Permanent Works.”

This one trips people up! 🤯

🚧 For example: A diesel generator installed permanently on site? That’s Plant.

But the excavator digging trenches? That’s Contractor’s Equipment.

🔎 The distinction is critical for:

• Ownership transfer (Clause 7.7 – when does it become the Employer’s?)
• Insurance and risk allocation
• Eligibility for payments

🧩 1.1.5.6 – Section

📘 and 📒:

“Section means a part of the Works specified in the Appendix to Tender as a Section (if any).”

✨ Used for phasing, handovers, or milestone completions.
If the Works are to be taken over in parts, each part is referred to as a “Section”. This is crucial when:

• Milestone payments or delays are tied to parts of the project.
• The Employer wants to take over parts early (see Clause 10.2).

🏗️ 1.1.5.7 – Temporary Works

📘 and 📒:

“Temporary Works means all temporary works of every kind (other than Contractor’s Equipment) required on Site for the execution and completion of the Permanent Works and the remedying of any defects.”

🌉 This includes formwork, scaffolding, temporary supports, cofferdams, staging platforms, etc.

📌 Critical distinction: Though they don’t become part of the end product, they are:

• Necessary for construction to proceed.
• Subject to certain safety and quality obligations.
• Sometimes cause confusion with Contractor’s Equipment—so clarity here prevents disputes!

🛠️ 1.1.5.8 – Works

📘 and 📒:

“Works means the Permanent Works and the Temporary Works, or either of them as appropriate.”

🎯 This is the big umbrella term that shows up all over the contract:

• “Commencement of the Works”
• “Time for Completion of the Works”
• “Engineer’s instructions related to the Works”

💡 Always check the context—sometimes it’s only referring to Permanent Works, sometimes it includes both.

🔍 Summary Table (Side-by-Side Snapshot)

🚜 Contractor’s Equipment – Who’s got the keys?

Let’s say the Contractor brings in a tower crane. Is it part of the Permanent Works? Nope. That crane is a tool to do the job—Contractor’s Equipment.

🟡 Implications:

• It remains Contractor-owned throughout. Even if it’s sitting smack in the middle of the site.
• If it’s damaged due to a storm? The Contractor bears the loss—not the Employer. This flows from Clause 17.2 (Care of the Works) and Clause 18.2/19.2 (Insurance).
• It’s not eligible for payment under Clause 14.5. That’s because it doesn’t become part of the Works.

💭 Can it be interpreted that… a temporary steel bridge for moving materials is Contractor’s Equipment? Only if it’s not intended to form part of the Permanent Works and isn’t classed as Temporary Works. If it supports execution but isn’t a physical part of the final output or defined temporary support, it straddles a line—so always clarify in the Particular Conditions!

🧱 Materials – Building blocks or payment puzzles?

Suppose a Contractor delivers 1,000 bags of cement and rebar to the site. These are clearly Materials—they’re intended to become part of the structure.

🟡 Implications:

• The Employer may be required to pay for them early—even before they’re installed—if they’re properly stored, identified, and backed by proof of ownership. This is handled under Clause 14.5.
• Risk still sits with the Contractor until incorporated into the Works—unless ownership transfers earlier (see Clause 7.7).
• Any damage to these materials pre-incorporation? Again, Contractor bears the risk, unless the contract states otherwise.

💬 Pro tip: In the 2017 Book, you’ll see more careful emphasis on documentation for Materials intended for payment—FIDIC tightened up the conditions for payment against off-site and on-site stored goods.

⚙️ Plant – It’s not just equipment, it’s the “installed heart” of the Works

Ah, now this is where things get spicy. “Plant” isn’t just any machinery—it’s the kind that’s designed to become part of the Works. Think: chillers, generators, water pumps, SCADA panels, or power distribution units.

🟡 Implications:

• The moment it’s delivered to site (or off-site storage, if agreed), the Employer may become the owner under Clause 7.7, provided payment has been made.
• Plant is eligible for payment even before installation if the contract allows.
• If damaged after delivery but before installation, the risk may pass depending on what’s written under Clause 17.2 and Clause 19.2 (Insurance).

📒 In the 2017 Book, the term “Plant” retains its core meaning, but there’s improved consistency in how ownership, risk, and testing are handled—especially as modular and prefabricated solutions have become more common.

🏗️ Temporary Works – They’re here for a good time, not a long time

Scaffolding, formwork, trench supports—these are Temporary Works. They’re essential to carry out the job but are never meant to remain in the final build.

🟡 Implications:

• Though “temporary”, they carry significant risk: if poorly designed or executed, they can cause accidents.
• The Contractor is fully responsible for their design and safety (unless the Employer provides a design—then shared risk may apply).
• Not eligible for direct payment, unless expressly stated in the BOQ or Schedule of Payments.

💭 Can it be interpreted that… a formwork system designed and fabricated off-site qualifies as both Goods and Temporary Works? Yes—and this dual nature affects insurance, cost recoverability, and safety responsibility.

🏢 Permanent Works – The Employer’s final prize

This is what the Employer is paying for: the finished building, the completed infrastructure, the operational facility.

🟡 Implications:

• Risk usually transfers on Take-Over (Clause 10.1).
• Any defect found post-completion kicks in the Defects Notification Period (Clause 11).
• Completion timelines, testing, and penalties (Clause 9 and Clause 8.7) are all tied to Permanent Works.

💡 Golden tip: Any confusion between what’s Permanent and what’s Temporary can mess up handovers, defect management, and insurance claims. Get those definitions watertight!

🔁 Cross-cutting Impacts: Clause 1.1.5 powers other clauses

The beauty of FIDIC is how it all ties together. The terms in Clause 1.1.5 are like seeds that grow through the whole contract. Let’s connect some dots:

• Clause 7.7 (Ownership of Plant and Materials)
  → Relies directly on how you define Plant and Materials.
• Clause 14.5 (Payment for Plant and Materials on Site)
  → The only way to apply it properly is to understand Clause 1.1.5’s definitions.
• Clause 17.2 (Contractor’s Care of the Works)
  → Knowing whether an item is “Works”, “Plant”, or “Contractor’s Equipment” decides who bears the risk.
• Clause 19.2 (Insurance for Works and Contractor’s Equipment)
  → Risk assignment flows from the definitions. A single misclassification could invalidate insurance coverage.

📘➡️📒 Why did FIDIC retain nearly the same structure in 2017? Because it works! Instead of rewriting the wheel, they focused on better integration, stronger enforcement logic, and harmonization with new procedures (like advance warning, testing stages, and claims timelines).

💸 Clause 14 – Contract Price and Payment

🔗 Relevance:

This clause is all about how and when the Contractor gets paid. To determine what’s payable, you must know what counts as:

• “Plant” delivered to site.
• “Materials” stored on-site.
• Or whether something is Contractor’s Equipment (not payable).

💥 Example:

Under Sub-Clause 14.5 (Plant and Materials intended for the Works), the Contractor can request payment for Plant and Materials delivered to site—but only if they fall under the definitions in Clause 1.1.5 and meet the conditions (ownership transfer, proper storage, documentation, etc.).

👉 Misclassify a diesel generator as Contractor’s Equipment instead of Plant? You might lose the chance to get an advance payment for it. 💸💔

🛡️ Clause 17 – Care of the Works

🔗 Relevance:

This clause allocates who bears the risk if something goes wrong—think damage, loss, or theft.

Clause 17.2 (Contractor’s Care of the Works) says the Contractor is responsible for “the Works, Plant, Materials, and other Goods” until Take-Over.

✅ But here’s the twist: the exact scope of those responsibilities depends on how those items are defined in Clause 1.1.5.

💥 Example:

• A scaffold collapses. Is it Temporary Works or Contractor’s Equipment?
• If it’s Temporary Works → Contractor is liable under Clause 17.2.
• If it’s misdefined → Risk and insurance coverage could be disputed. 🙅‍♂️

💬 Pro tip: Even things like formwork can blur the line—so defining them clearly in the Particular Conditions is wise.

🧾 Clause 7 – Plant, Materials, and Workmanship

🔗 Relevance:

Clause 7 governs how the Contractor supplies and uses Materials and Plant. It ensures only proper, approved materials go into the Permanent Works—and also clarifies when ownership of Materials and Plant passes to the Employer.

Most notably, Sub-Clause 7.7 (Ownership of Plant and Materials) explicitly says:

Plant and Materials intended for the Works shall become the property of the Employer upon payment…

✅ But again, to know what qualifies, we refer back to the definitions in Clause 1.1.5.

💥 Example:

If the Contractor delivers HVAC units to site:

• Defined as Plant → Employer gets ownership on payment (7.7).
• If incorrectly defined as Contractor’s Equipment → Ownership never transfers, and payment could be denied.

💭 This interplay becomes especially important if equipment is delivered to off-site storage but still needs to be included in interim payments or insurance coverage.

📅 Clause 10 – Employer’s Taking Over

🔗 Relevance:

This clause defines when the Employer can take over the Works or Sections—as per the definitions in Clause 1.1.5.

Specifically, “Section” (1.1.5.6) is referenced if the Works are to be delivered in phases.

💥 Example:

Let’s say the Contract splits a hospital project into:

• Section A – Emergency Unit
• Section B – ICU
• Section C – Outpatient Wing

Each Section can be taken over independently under Clause 10.2, but that’s only possible if they’re properly defined in the Appendix to Tender and consistent with Clause 1.1.5.6.

🎯 If the Section definitions are vague or missing? Expect delay claims, handover disputes, and operational bottlenecks.

⚖️ Clause 20 – Claims, Disputes and Arbitration

🔗 Relevance:

Clause 20 governs Contractor’s claims, including for additional payment or extensions of time.

Here’s where Clause 1.1.5 kicks in indirectly:
The nature of the item in dispute—Plant, Materials, Equipment, Works—determines whether a claim is valid.

💥 Example:

A shipment of Materials is delayed at customs. The Contractor wants to claim EOT and cost. The claim depends on:

• Were they really “Materials” as per Clause 1.1.5.3?
• Were they to form part of the Permanent Works?
• Did the delay actually affect the Critical Path?

📌 In this case, the precise classification under Clause 1.1.5 becomes the first litmus test for whether the claim is worth pursuing.

🔄 Clause 19 (📒 2017) / Clause 18 (📘 1999) – Insurance Requirements

🔗 Relevance:

Insurance provisions depend entirely on how assets are defined.

• The Works (Permanent + Temporary) need to be insured.
• Contractor’s Equipment is separately insured.
• Materials and Plant may be insured once ownership transfers.

And guess what? These categories come straight from Clause 1.1.5. 💥

💥 Example:

The Contractor stores Plant (HVAC units) on site. They get stolen. Whether the insurance policy kicks in depends on:

• When ownership passed (Clause 7.7),
• Whether the item was correctly defined as Plant under 1.1.5.5,
• And whether it was included in the insured scope.

A misclassification could mean zero coverage—leaving the Contractor exposed.

📘➡️📒 What’s New in 2017?

While the core definitions stayed the same, the 2017 Yellow Book improved integration across clauses:

• Clause 1.1.5 terms are more consistently used in Clauses 7, 14, 17, and 19.
• There’s tighter control on when ownership passes and when payment is triggered.
• Particular attention is given to documenting and proving the status of Plant and Materials for claims and payment.

📌 If you’re using the 2017 edition, you’ll notice cleaner connections between definitions and operational provisions—reducing ambiguity and giving the Engineer a clearer path for decision-making.

🔄 Quick Reference Matrix – How Clause 1.1.5 Interacts

6️⃣ Suggestions for Clarity and Improvement

Clause 1.1.5 provides critical definitions that cascade throughout the FIDIC Yellow Book. But here’s the thing: even well-written definitions can lead to big misunderstandings on site unless they’re backed by clarity, real-world interpretation, and smart tailoring in the Particular Conditions (PCs).

Let’s start by identifying areas that tend to be ambiguous, and how we can sharpen them—without breaching FIDIC’s Golden Principles (GP1–GP5).

🔎 Ambiguities & Their Consequences

🏗️ 1.1.5.1 Contractor’s Equipment

Original (2017):

“…means all apparatus, equipment, machinery, construction plant, vehicles and other items required by the Contractor for the execution of the Works. Excludes Temporary Works, Plant, Materials…”

✨ Suggested Wording:

“…includes all items used solely to support construction and not intended to form part of the Permanent Works, including reusable formwork systems, scaffolds (if not custom-designed), and mobile machinery. This term shall not include Plant, Materials, or Temporary Works, unless clearly identified in the Particular Conditions or Contract Data.”

✅ Why: Adds clarity for recurring grey areas like modular formwork. Allows project-specific customisation via PCs.
✅ GP Compliance: Fully compliant—clarifies, doesn’t shift risk or roles.

🧱 1.1.5.3 Materials

Original (2017):

“…things of all kinds (other than Plant) intended to form or forming part of the Permanent Works…”

✨ Suggested Wording:

“…means any consumable or installed element, including supply-only items such as aggregates, cement, bricks, rebar, and wiring, that are not machinery and are intended to be incorporated into the Permanent Works. Prefabricated or modular units shall only qualify as Materials if not classifiable as Plant.”

✅ Why: Helps Contractors and Engineers differentiate between off-site precast elements vs. deliverable machines.
✅ GP Compliance: Adds classification clarity with no rights removed.

⚙️ 1.1.5.5 Plant

Original (2017):

“…apparatus, equipment, machinery and vehicles… forming part of the Permanent Works.”

✨ Suggested Wording:

“…shall include permanently-installed mechanical and electrical items such as transformers, HVAC systems, compressors, or process control panels that serve the final operation of the Works. Excludes reusable, mobile or construction-only equipment.”

✅ Why: Reinforces when Plant ownership/payment shifts and avoids confusion with movable gear.
✅ GP Compliance: Supports risk clarity (GP3) and clean payment rules (GP2).

🏗️ 1.1.5.7 Temporary Works

Original (2017):

“…temporary works of every kind (other than Contractor’s Equipment)…”

✨ Suggested Wording:

“…shall mean non-permanent construction or access structures such as scaffolds, formwork, platforms, temporary roadways, or dewatering pits, which are required to enable execution of the Permanent Works, and are removed or decommissioned after use.”

✅ Why: Clarifies that if it’s necessary for construction but not permanent, it’s Temporary Works.
✅ GP Compliance: Sharpens existing wording (not redefining roles).