Schedule of Cost Components: Plant and Materials

NEC Plant and Materials are the items that end up in the finished works, and section 3 of the Schedule of Cost Components sets what can be charged for them. It's a short section with two items, 31 and 32, but wastage and disposal credits catch people out.

Don't be misled by the word "plant". In ordinary site talk it means machines. Under NEC, machines used to build the job are Equipment, while a plant item such as a pump that stays in the finished works is Plant and Materials. See the definition of Plant and Materials and the guide to NEC payment and Defined Cost.

What is covered

Item	Covers	Practical notes
31	Buying the items	Net of recoverable discounts and tax, under clause 52.1
31	Delivery to the Working Areas, and removal	Delivery to a storage yard outside the Working Areas needs a closer look
31	Providing and removing packaging	Pallet returns and refunds reduce the cost
31	Samples and tests	Repeat tests after a Defect is found are affected by Option-specific rules
32	A credit for payments received on disposal	Credited unless the cost was itself disallowed

The NEC3 Schedule and the NEC4 subcontract schedule use the same numbering for these items. The Short Schedule uses the same two items too, so this section reads the same under Options A and B when pricing a compensation event.

Plant and Materials or Equipment?

The test is what the Scope requires, not what the item is. Ask this: does the Scope require this item to be included in the works?

Item	Likely treatment	Why
Reinforcement in a slab	Plant and Materials	It stays in the works
Formwork reused across pours	Equipment	It is used to build but isn't part of the works
Permanent formwork left in place because the Scope requires it	Plant and Materials	The Scope includes it in the works
Temporary sheet piles left in the ground by the Contractor's choice	Equipment, consumed	The Scope didn't require them, so they fall under Equipment item 25
A generator supplied and installed as a permanent backup	Plant and Materials	It's in the works

Worked example: wastage and a disposal credit

A fictional Option C contract with illustrative figures. The Contractor buys 1,000 tonnes of stone at £30 per tonne, including delivery. Of this, 900 tonnes go into the works, reasonable wastage is 30 tonnes, and the remaining 70 tonnes are surplus and sold for £600.

Line	Amount
Purchase and delivery: 1,000 t × £30	£30,000
Surplus beyond reasonable wastage: 70 t × £30, disallowed	(£2,100)
Sale receipt on the surplus	Not credited
Defined Cost	£27,900

Item 32 credits disposal receipts "unless the cost is disallowed", because the Contractor has already borne that cost. If the surplus had resulted from a change to the Scope, its cost wouldn't be disallowed, so the Contractor would recover the £2,100 and the £600 receipt would be credited.

Records to keep

• Purchase orders, delivery tickets and invoices that tie together.
• A record of how you've measured wastage for main materials. "Reasonable" is judged against something, so note the basis early.
• Stock or surplus records, including transfers to other jobs. A transfer out should reduce the cost on this contract.
• Payment proof, as required by clause 52.2.

What people get wrong

• Forgetting retrospective rebates. A supplier's year-end rebate is still a rebate, and clause 52.1 takes recoverable ones off.
• Treating materials on site as automatically paid. On C, D and E the test is what has been or will be paid before the next assessment date. On A and B, value only comes through completed activities or quantities, so buying early doesn't help cash flow unless the Activity Schedule or a Z clause provides for it.
• Charging off-site fabrication twice. Standard items bought are here. Items specifically designed for the works and made by the Contractor outside the Working Areas fall under the manufacture and fabrication section.

Related guides

• NEC Payment and Defined Cost: The Complete Guide
• Schedule of Cost Components: Charges and Overheads
• Subcontractors and Defined Cost
• Disallowed Cost Explained
• Schedule of Cost Components: People
• Schedule of Cost Components: Equipment

This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.