Equipment, like this pump, can be pre-purchased. Please click on the image above to see a larger version in a new window.

The owner didn't have a pumping station or a contractor to build one. In fact, design of the new facility was barely underway when the township ordered two giant pumps that were key ingredients for the project.

"These pumps aren't off-the-shelf items," said Tom Watt, Director of Buchart-Horn's Environmental Division." They're manufactured after you place an order so it could take six months or more to get what you want."

To keep a project on schedule, owners sometimes "pre-purchase" major components to improve the chances they'll be on site when it's time to put them in place. Specifications for pre-purchased equipment can be written from information developed early in the design before all the project details have been addressed.

An advantage to pre-purchase is shortening the overall project schedule. While component manufacturing is underway, engineers and architects can proceed with detailed design of buildings or other project components. In addition, pre-purchase gives the project owner direct control over equipment selection rather than assigning that responsibility to a contractor who will not be the one using the equipment for 20 years or more.

Another advantage is that equipment can be purchased at the manufacturer's price with no markup from the contractor. It's a good solution to several frequent challenges, but owners need to know that some of the risk shifts from the contractor to the owner. Normally the equipment and all project components are in the hands of, and legally owned by the contractor. That contractor is responsible for the entire project until owner acceptance. But the pre-purchased equipment is actually bought by the project owner, who assumes possession and responsibility for the components before he accepts the completed project.

Examples of potential problems with pre-purchase include:

• Who covers the cost of a crane for unloading if the pre-purchased equipment is not delivered on time?
• Who pays for modifying the pre-purchased equipment or a structure built by the contractor according to plans should the equipment not fit?
• Who is responsible for the equipment after delivery in the case of a natural disaster such as a flood or severe storm?

These problems are not insurmountable and can be resolved by language in the specifications prepared by the architect/engineer. But they can become major issues for an owner who is used to assigning all responsibility to the contractor and who doesn't expect to be involved in these problems.

"Virtual elimination of manufacturer inventories puts long delays in big projects," said Watt. "Pre-purchases can solve those problems as long as everybody understands the arrangements and the exposure to shifting responsibilities."

A growing number of large projects rely on pre-purchase of equipment. Items such as pumps, mixers, blowers, and computer control units are frequently purchased before design work is completed. The technique can trim months from a project schedule. Owners considering the pre-purchase approach must, however, recognize that the "normal" relationships between Owner, Contractor, Equipment Supplier and Design Professional will be changed. Generally, with pre-purchase the project's Owner will be assuming responsibility usually held by the Contractor. Owners should therefore carefully compare the benefits of pre-purchase against the increased responsibility before committing to the pre-purchase route.