Owner Furnished vs Contractor Furnished Equipment on a Low Voltage Package

What OFCI and CFCI actually mean#

Two acronyms describe who buys and who installs. CFCI is contractor furnished, contractor installed: the contractor purchases the equipment, marks it up, delivers it to the site and installs it. OFCI is owner furnished, contractor installed: the owner purchases the equipment on its own order and the contractor installs what arrives.

A third arrangement, OFOI, is owner furnished and owner installed. On low voltage work it usually appears at the configuration layer rather than the physical one. The contractor mounts the cameras, pulls the cable and terminates the drops; the owner’s IT staff configure the video management system, the switch stack and the wireless controller. The physical and logical scopes are split, and the split point needs to be written down as carefully as any material boundary.

On a Division 27 and Division 28 package the items that most often go OFCI are network switches, wireless access points and controllers, cameras, video management licenses, access control head end software, and occasionally the racks themselves. Cable, connectivity, pathway, terminations and labor are almost always contractor furnished, because there is no purchasing advantage in a spool of Cat6A and no owner wants to warehouse one.

Telelink Business Services is a licensed C-7 Low Voltage Systems Contractor, CSLB License #472017. Telelink installs both ways on California commercial and institutional projects. Neither arrangement is better in the abstract. What matters is whether the contract matches the arrangement the project actually needs.

Why owners choose to furnish#

Four reasons come up repeatedly, and all four are legitimate.

An existing purchasing agreement. Public agencies, school districts, health systems and large private owners often buy through a cooperative purchasing contract, a state master agreement or a manufacturer enterprise agreement. The pricing on those vehicles can be better than what a single contractor gets on a single project, and it is already competitively procured, which shortens the approval path.

Standardization across a portfolio. An owner running forty buildings on one camera platform and one switch family has a real interest in the forty-first building matching. Standardization drives spare parts, staff training, firmware management, license pooling and the ability to move equipment between sites. Letting each project’s contractor pick a comparable model erodes that quickly.

Budget and funding treatment. Equipment bought on the owner’s own purchase order sits in a different line than construction contract costs, and sometimes in a different funding source, a different grant or a different capital plan. That distinction can matter more to an owner than the price difference.

Markup. Contractors mark up material they furnish, which pays for the procurement labor, the carrying cost, the risk of a bad shipment and the warranty they take on. The rate is a contract term rather than a fixed industry figure. It moves with the contract form, the value of the order and how much of the procurement risk the contractor is being asked to carry, and like any other contract term it is negotiated before award rather than discovered afterward. Removing it is a genuine saving, and it is also the reason owners sometimes furnish equipment where none of the other three reasons apply.

What furnishing actually transfers#

Removing markup is the visible half. The invisible half is everything the markup was paying for.

Risk	Under CFCI	Under OFCI
Procurement	Contractor selects, orders, expedites and chases the vendor	Owner selects, orders, expedites and chases the vendor
Lead time	Contractor carries the exposure and schedules around it	Owner carries it; a slip becomes a schedule event on the project
Receiving and inspection	Contractor receives and counts against its own order	Must be assigned; often nobody until the day of installation
Storage and security	Contractor’s warehouse or a secured site area, at its cost	Owner’s problem, and site storage for cameras and switches is a theft target
Insurance while stored	Contractor’s inventory coverage	Owner’s builder’s risk or property policy, if the policy reaches it
Damage and shortage	Contractor replaces at its cost and its schedule risk	Owner replaces, and the contractor may claim remobilization
Warranty administration	Contractor is the purchaser and manages the claim	Owner is the purchaser and manages the claim
Spare parts	Priced in the bid if specified	Owner must remember to buy them; they are rarely on the first order
Delay	Contractor performance failure	Owner caused delay, with time and often cost consequences
Coordination	One party owns the delivery date and the install date	Two parties own halves of the same date

The last row is the one that does the damage. Under CFCI a single party is responsible for the equipment being on site the day the crew needs it. Under OFCI that responsibility is divided, and divided responsibility for a delivery date is how a rack sits empty while each party waits for the other to chase the same shipment.

The schedule problem and the delay clause#

A missed delivery on owner furnished equipment is not a contractor performance failure. It is an owner caused delay, and standard construction contract principles treat owner caused delay as grounds for an extension of time and, depending on the contract, for compensation.

That has two consequences worth being explicit about. First, an owner who furnishes equipment has taken on a critical path item and needs to manage it like one, with a tracked delivery date, a named person chasing the vendor, and visibility on the construction schedule rather than on a purchasing spreadsheet. Second, the contract should say what happens when the date slips: how notice is given, whether the contractor is entitled to time, cost or both, and how remobilization is priced. Leaving it unstated does not eliminate the exposure. It just moves the argument to the end of the project.

The practical version is a delivery schedule attached to the contract listing every owner furnished item, its model number, its quantity, its required on-site date and the milestone it feeds. Update it at every schedule meeting. The pre-signature question list covers how many mobilizations a low voltage price assumes, which is the number that changes when a delivery slips.

The warranty seam#

This is the failure mode owners underestimate.

Under CFCI, when a camera fails, one company is responsible for finding out why and fixing it. It bought the camera, installed it, and warranted both. Under OFCI, the manufacturer warrants hardware to the owner and the contractor warrants only its own workmanship, expressly excluding the performance of equipment it did not furnish. Neither position is unreasonable and neither party owns the problem.

The result is a diagnostic gap. An intermittent fault on a camera could be the camera, the cable, the connector, the switch port, the power injector, the firmware, the network path or the recording configuration. Under one contract, whoever finds out is the same party who pays for the fix. Under two, whoever finds out is arguing about who pays for the finding.

The clause that closes this is short. Name one party responsible for first diagnosis on a fault in an OFCI system, set an hourly rate for that diagnosis, and state that if the fault is traced to installation workmanship the diagnosis is at the contractor’s cost, and if it is traced to the equipment the diagnosis is billable to the owner, who then pursues the manufacturer. Both parties then know in advance who pays for the diagnostic time, so the fault gets investigated rather than debated.

What a workable OFCI clause has to specify#

The clause must state	Why
A complete equipment list with manufacturer, model, quantity and options	A bid against an incomplete list is a bid against a guess
Required on-site date for each item, tied to a construction milestone	Turns a purchasing date into a schedule obligation
Delivery location, receiving hours and access requirements	Prevents a truck arriving at a locked gate on a Friday
Who signs for the shipment, inspects it and counts it	The most commonly unassigned duty on an OFCI job
A period to report shortage or concealed damage, and who files the carrier claim	Concealed damage found at installation is unrecoverable without a claim window
Who stores the equipment, where, and who secures it	Cameras and switches on an open site are a theft target
Who insures the equipment before installation and until acceptance	Builder’s risk does not automatically cover owner property in a contractor’s care
Consequences of late delivery: time, cost, remobilization pricing	Makes the delay exposure explicit before it happens
How the installer’s warranty is limited on furnished equipment	Prevents an assumed warranty that does not exist
Who performs first diagnosis on a fault and at what rate	Closes the seam between manufacturer and installer
Spare parts quantity and who holds them	Spares are never on the first purchase order
Configuration responsibility, item by item	Distinguishes OFCI from OFOI at the layer where it actually matters

Attach that list as an exhibit rather than burying it in a specification paragraph, and require the contractor to acknowledge it in the scope letter. Our Division 27 and 28 specification checklist treats a missing owner furnished equipment schedule as one of the standard gaps that turns into a change order.

Where OFCI works, where it fails, and where it splits#

Where it works. A multi site rollout of standardized equipment: the same camera model in thirty stores, the same access point in every classroom, the same switch in every telecom room. The owner already has the purchasing agreement, already knows the lead time, already holds spares, and is ordering enough volume for the markup saving to be real. Delivery is a repeated process rather than a one time event, and if one site’s shipment slips the crew works another site. Our security camera systems and access control systems pages describe what the installed scope looks like on those programs.

Where it fails. A single project on a compressed schedule with mixed equipment. There is one delivery, one crew, one window, and no slack to absorb a slip. The owner is buying items it does not buy routinely, from vendors it has no leverage with, on lead times it cannot verify. The markup saving on a single project’s equipment is often smaller than the cost of one extra mobilization and a two week schedule extension.

Where it splits. Furnish the equipment where the owner has a genuine purchasing or standardization advantage, typically switches, access points and sometimes cameras, and let the contractor furnish everything else. Mixed arrangements are common and work fine as long as the boundary is written down item by item, and as long as the closeout package documents both halves the same way. The closeout documentation checklist lists what the package should contain regardless of who bought the equipment.

Next step#

If you are deciding how to split furnishing on a California commercial or institutional project, send the equipment list and the schedule through request a bid and ask for the scope priced both ways, with the OFCI version showing the receiving, storage and coordination labor as a separate line. General contractors managing an owner furnished list can find our submittal and coordination process on the for general contractors page.