Contractor Dispute for unreturnable parts.

[Brian_PE]

Background - I was involved in a PO for a small pipeline and pump station project with a utility contractor. 3/4 through the job, the Owner kicks my utility contractor off the job, and brought in their own people to complete the work. My contractor sought to return parts purchased for the job they now no longer needed to install. All parts were returned for credit, except for 3 individual items that are claimed to be special order. I, as the PM, was unaware these parts were special order, but from my contractors preferred vendor they apparently are (I know my vendor preferred vendor has similar items in stock). Anyway - my contractor is now requesting I reimburse him for parts that 1) were not installed and 2) not returnable. Also, this contract was a lump sum purchase order, but individual line items for components were included the the PO.

I can go into more detail if needed, but do I have a leg to stand on and refuse payment for these parts since I was unaware they were special order?

Thanks in advance for any information or direction you can provide.

 

[miningman]

Pay the man. He bought these items in good faith . Unless you want this to end up in court....... and if it does , he will be claiming for a LOT more than three widgets......

 

[JedClampett]

I'd verify the parts are indeed non returnable and have no value and then as miningman said, pay the man.
But make the contractor give you the parts.

 

[TheTick]

I once got out of a very uncomfortable situation by insisting I get the parts I was being charged for. Suddenly there were no parts--thus no charges.

I was working as an HVAC balancer and one of the subs claimed we damaged locks breaking into offices to do work. (We never had to unlock anything on that particular job.) We were being charged for new tumblers but our boss wouldn't pay unless he got the broken ones. End of discussion.

 

[Compositepro]

This is not a reimbursement issue. The contractor bought the parts for you based on a contract or purchase order. You own the parts. If the contractor cannot return the parts for reimbursement(which would be a courtesy to you) he should give you the parts. If, for some reason he cannot give you the parts, you owe him nothing, except cancellation charges. Ordering materials is not a small part of any project.

 

[Ron]

You noted that you are the PM, and you refer to "your contractor. You then noted that the owner fired your utility contractor. What is the contractual relationship all around? Are you the PM for a GC? Are you the design engineer? Please clarify as that might make our comments more relevant.

 

[Brian_PE]

Thanks the the various inputs - all of your responses are very helpful.

Ron - to clarify - my company was awarded a project from the facility owner, Company A. I hired Company B to complete the mechanical (pipeline and pumping station) portion of the work. I am the designer and the PM

I have dealt with Company B on around 30 other projects, but they had, from my experience with them, little experience with mechanical plumbing and buried pipeline work. Company B insisted they had people capable of the completing the work. This project was relatively short, only 800 LF and a minimal plumbing to connect three withdrawal pumps. Ultimately, Company B was terminated from the project by Company A due to failure to perform work in a timely manner, among other things. Hope this helps.

 

[Ron]

If I follow your stream, you have a contract with Company A to provide design and PM duties. Company B has a contract with Company A to provide the construction of the line and pumps. Based on this, you have no contract with Company B and therefore Company B has no claim against you unless you directed their purchase of the non-returnable items, on behalf of Company A in your capacity as PM. In that case, you would only have a secondary tie to Company B. In either case Company A owns the non-returnable items if paid for. Otherwise, Company B owns the items and they have to try to recover from the supplier or sell them otherwise....after all, it was their lack of performance that caused the issue, otherwise it wouldn't exist.

I assume Company C that took over Company B's work was not interested in the non-returnable items?

Also, if you are a separate engineering design company, it is not advisable to subcontract construction work through your company for numerous reasons....this is one of them.

 

[SandCounter]

Brian,

If I read your OP right, it sounds like you have your own preferred vendor separate from whom Company B purchased the non-returnable parts. Would your preferred vendor be willing to take the parts off their hands since they stock them anyway as a favor for loyalty? Hopefully you could cut your losses.

I used to count sand. Now I don't count at all.