Buying equipment directly can save owners money and time on construction projects. Those gains can disappear when delivery, storage, connection and warranty duties are left undefined between the owner, the manufacturer and the installing contractor.
Owners often buy equipment directly for a construction project to gain advantages in pricing, schedule and budgeting. Those gains can shrink or disappear once the equipment reaches the site if nobody wrote down how responsibilities divide among the owner, the manufacturer and the installer. Under this arrangement, known as owner furnished, contractor installed, or OFCI, the owner makes the purchase and the contractor keeps the work of setting, connecting and commissioning.
Direct procurement lets an owner negotiate with manufacturers or distributors, avoid contractor markup on the equipment itself and use existing purchasing agreements. Orders can go out during design, so fabrication moves forward while drawings are finalized and bids are collected. Equipment costs also stay outside the construction contract, where they can be tracked separately. In some states, owners with sales tax exemptions can buy materials directly without paying tax that would apply if a contractor made the purchase.
Delivery dates are among the first places where value can erode. An installing contractor builds its schedule around when owner furnished items will arrive, and a late shipment can idle crews and push back later trades. Contractors commonly respond with requests for time extensions and added compensation. Those costs fall to the owner when the delay traces back to owner procurement.
Handling after arrival raises separate questions. Someone has to receive the shipment, check it against the order, document visible damage, store it in suitable conditions and insure it until installation. When contracts leave these tasks unassigned, a dented cabinet or a missing component can stall work while the parties sort out who pays for the replacement.
Gaps at connection points present another risk. Owner purchase orders may not specify anchors, mounting hardware, control wiring, factory startup or training, while contractor scopes may assume the manufacturer is providing them. Items that fall between the two documents frequently come back as change orders, priced after the contract amount has already been set.
Warranties can divide along the same line. Manufacturers typically cover defects in the product, and installers cover the quality of their workmanship. When a unit fails after startup, which warranty applies can depend on inspection records, installation documentation and whether the installer followed the manufacturer’s requirements.
Contract forms and project specifications provide ways to assign these duties before construction starts. General conditions published by the American Institute of Architects include an article governing construction by the owner or by separate contractors. Many specifications add an equipment responsibility matrix that identifies which party furnishes, receives, stores, installs, connects and starts up each item. Owner purchase orders can also require manufacturers to deliver submittals, installation instructions and startup support to the installing contractor on a stated schedule.
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