It is likely that, for these reasons, JCT has since 2005 removed the possibility for designated subcontractors to be included by default in the use of their terms. In fact, in the 2005 series of YCW contracts, the use of appointed subcontractors replaces appointment, although named subcontractors have been used in one form or another in YCW contracts since 1984. Appointment is still common for international projects, but some forms of contracts (e.B Mixed Contract Tribunal (JCT) contracts) no longer contain appointment provisions due to the complexity involved. The use of designated subcontractors or designated specialists is generally considered a simpler alternative. When it comes to named subcontractors, the customer is still able to influence the supply chain list, but it`s not absolutely like an appointment. The procuring entity may include subcontractors designated in a tender, but the contractor has the right to reject some of the names, although any dispute must be made before the contract is awarded. Ultimately, the designated subcontractor is still hired by the prime contractor, but it is imposed on him by the customer. This can be made possible in the contract by a principal cost sum, to which the contractor can add profit and presence. The court, on the other hand, disagreed. Although Nelson Tectonics was identified, it was not “named” because “the designation of a subcontractor does not simply mean the identification or proposal of a particular subcontractor, as was the case in Nelson`s case, but the designation of a subcontractor with a view to becoming a designated subcontractor.” The court concluded that while Structal was the only subcontractor capable of designing and manufacturing curtain walls for the Structal system, this was not enough to make Structal a designated subcontractor. In addition, the court found that the contract administrator did not require the contractor to enter into a subcontract with Nelson Tectonics alone; the contractor was free to propose or commission subcontractors other than Nelson Tectonics.
Since Nelson Tectonics was not designated as a subcontractor in the construction contract and the revised bid amount was not an instruction to the contractor to accept Nelson Tectonics` bid, Nelson Tectonics could not be a designated subcontractor. In some circumstances, the client may want to select (appoint) a subcontractor himself instead of allowing the contractor to select him. This is called a designated subcontractor. It is therefore important to consider not only what the construction contract says, but also how this construction contract came into being. “As a developer employing up to 20 subcontractors per project, it is important for our company to create high-quality subcontracting requests. We. The contractor may or may not be held liable for the non-performance of the designated subcontractor, depending on the exact wording of the specific contract used. However, since the subcontractor is imposed on them, the contractor usually has the right to oppose the subcontractor under certain conditions. If the customer still wishes to use the subcontractor, some contracts allow him to compensate the main contractor for the possible consequences. However, the recent Scottish case Mowlem v Inverclyde Council  suggests that employers may have the advantage of choosing a subcontractor without the disadvantages of an appointment in certain circumstances. In the present case, it was a subcontract for cladding, which “the supply and installation of curtain walls … with Structal (UK) Ltd systems everywhere. The employer stated that the curtain wall had to be completed by one of the four pre-selected subcontractors, although the specification of the Structal systems effectively meant that Structal was the only subcontractor capable of making bids, which was confirmed by the failure of the other three pre-selected subcontractors, to apply for the job.
NHS facilities, in their role as customers for construction projects, sometimes require a contractor to employ a subcontractor of their choice (called a `designated subcontractor`). Courts have held in the past that a contractor has no choice but to enter into a contract with a designated subcontractor and should therefore not be held liable for its actions. In some cases, this did not leave the customer with a right of recourse for defective work. Once appointed, the prime contractor must obtain bids for the package of said subcontractors (although they can reasonably oppose one of the designated subcontractors). Once the supervisor has selected and engaged a subcontractor, the provisional amount is replaced by the agreed effective price. The contractor may be wary of performance issues associated with named contractors and, for fear of being held liable for a perceived third party, he may reject his order or attempt to be compensated before agreeing to accept it. In any event, most court decisions agree that such matters relieve contractors of liability for problems caused by designated subcontractors. The main contractual difference between “named” and “domestic” subcontractors is that, together with domestic subcontractors, the contractor is free to choose which subcontractors he wishes to hire and under what conditions they are employed. The designated subcontractors are selected by the employer and the employer negotiates the terms of the subcontract with the subcontractors and asks the contractor to engage that particular subcontractor. However, employers should keep in mind that the appointment has significant drawbacks. For example, the appointment releases the contractor from any liability for design, compliance with performance specifications, subcontractor delays, and selection of types of goods and materials (however, the contractor reserves responsibility for poor workmanship and defects due to poor quality goods and materials). These disadvantages are explained in more detail below.
Assistance in resolving early technical issues and value engineering in the development budget is provided by a designated subcontractor, and the subcontractor in turn has preferential payment terms. In older versions of YCW contracts,. B e.g. JCT SBC 98, the customer even had the option of making a direct payment to the designated subcontractor in certain circumstances, i.e. where an additional payment was appropriate to speed up the programme and avoid the resulting delay costs charged by a prime contractor in the event of a failure of a designated subcontractor. However, the procedure was not followed in the present case. Instead, the engineer sought on behalf of St. Modwen Developments (“the Employer”) received offers from specialized subcontractors for the design, delivery and installation of the skilled work, and the contractor was ordered to award a contract to the selected subcontractor. The court concluded that this was an abuse of the procurement procedure and an appointment in all names except name. The judge did not really state that the subcontractor had been appointed, but for the purposes of the contractor`s final settlement, he treated the subcontractor as designated so that the contractor could claim attendance, overhead and profits. Designated subcontractors are less common in the UK than before, and some forms of contracts (e.g. B Joint Contracts Tribunal (JCT)) no longer contain provisions for the appointment of subcontractors.
Indeed, the contractual arrangements that allow for appointment are very complicated and, since the prime contractor has no choice to choose the designated subcontractor, the contract may or may not hold the contractor liable for the candidate`s non-performance (depending on the exact wording of the contract). However, the contractor is in principle granted the right to object to the subcontractor under certain conditions, and if the customer nevertheless wishes to use the subcontractor, some contracts provide for the release of the main contractor from the possible consequences. The appointment of subcontractors allows the client to influence the selection of subcontractors while leaving the responsibility for their execution to the prime contractor. The contractual arrangements that allow for appointment are very complicated and attempt to cover all possible contingencies both between the client and the prime contractor and between the prime contractor and the designated subcontractor. This may include: the main contractor`s objections to the appointment, the insolvency of the designated subcontractor, the need for a new appointment, etc. When developing your briefing, you may have already spoken to specialized supply chain subcontractors to discuss specific surfaces or products you prefer. Architects can also try to understand some fastening details when creating a fully detailed design. Subcontractors may request that they be referenced in subsequent contract documents in response to these design advice and comments, or they may be adopted directly by the proponent and then imposed on the prospective contractor through a process called appointment. .