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Procurement and logistics

When a supplier fails: recovering from a late or wrong delivery

By Review.LivePublished 3 min readHow we write

At 16:30 on a Thursday, the window supplier's dispatcher calls. Friday's truck will not come, and the new date is "probably the week after next". The glazing crew is booked, the scaffold is up, and the drywall crew was due to start behind the windows on Monday.

Three construction workers in hard hats and high-visibility clothing wait at a closed site gate marked Gate One B on a city street.
Photo: Sebastien LE DEROUT on Unsplash

A supplier's failure lands on the site first and on the contract later: the first hours decide how much time is lost, and the first written messages can decide who recovers it. Contracts differ. The default clause in US federal fixed-price construction contracts, for example, lists a supplier's delay as excusable when it arises from unforeseeable causes beyond the control and without the fault or negligence of both the contractor and the supplier, and requires written notice of the causes within 10 days of the delay beginning. Read your own contract's delay and notice clauses before you promise the owner anything.

The first 24 hours

  1. Get the facts in writing: what is late or wrong, why, the confirmed new date and what could ship now. Ask the supplier to confirm by email the same day.
  2. Keep the crews working: move them to work that is ready, and tell every trade scheduled behind the late item before the end of the day.
  3. Stop a wrong product at the gate, or tag it and set it aside, and do not install it. A different product goes through the specification's substitution procedure before anyone installs it.
  4. List the recovery options, each with a cost and a decision owner: a partial shipment, stock from another supplier, faster freight, resequencing or temporary works.
  5. Record the impact as it happens: crews moved or idle, equipment standing, and the supplier's messages, in the daily report and the delay record.
  6. Give written notice both ways: to the owner or consultant under your contract's notice clause, and to the supplier as the purchase order requires, stating the facts and that you are recording the costs.

Common mistakes

  • Waiting for the new date before telling anyone.
  • Installing a wrong product "to keep going" without approval.
  • Giving the owner a verbal heads-up and no written notice.
  • Rebuilding the record of idle crews from memory a month later.

Action list

Within 24 hours of the call

  1. Confirm the supplier's facts and new date in writing
  2. Move crews to ready work and tell the affected trades
  3. Tag and set aside any wrong product
  4. Price the recovery options and name who decides
  5. Record the impact in the daily report
  6. Send written notice under the contract and the purchase order

Check your understanding

Why give the owner notice when the supplier's delay may turn out to be your own risk?

Show the answer
Because notice costs little and protects options you cannot yet judge. If the delay proves excusable, notice may be a condition of getting the time, as it is in the US federal clause. If it is your risk, the owner still needs to plan around it.

Sources

  1. FAR 52.249-10 Default (Fixed-Price Construction), paragraph (b)Acquisition.gov, US General Services Administration · United States (federal government construction contracts; shown as an example) · accessed

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