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Financial

Stored Materials

In Plain English

Purchased materials that are on site or in secure storage but not yet installed, for which the contractor can bill.

Definition

Stored materials are materials that have been purchased and delivered to the project site or a secure off-site storage location, but not yet incorporated into the work, for which the contractor may request payment in a progress billing. To bill for stored materials, contractors must provide documentation of title, insurance, and location. Owners and lenders carefully verify stored material claims to prevent overbilling.

Why It Matters in Bidding

Billing for stored materials lets a contractor recover cash for major purchases before installation, which is vital for long-lead items that tie up working capital. On the owner's side, verifying title, insurance, and secure storage protects against paying for goods that could be lost, diverted, or never installed, so the documentation requirements directly shape draw approvals and project cash flow.

Example

A contractor delivers $80,000 of switchgear to a bonded off-site warehouse and submits a stored-materials line on the pay application with the paid invoice, a bill of sale, and a certificate of insurance naming the owner.

Related Terms

Payment ApplicationSchedule of ValuesOverbillingBilling

Frequently Asked Questions

Owners typically require proof of payment or invoice, evidence of title transfer such as a bill of sale, insurance covering the materials, and verification of a secure storage location. Off-site storage often demands additional safeguards like bonded warehouses, segregation from other goods, and inspection access before the draw is approved.
Often yes, but contracts and lenders impose stricter terms than for on-site storage. Expect requirements for a bonded or insured warehouse, materials clearly identified to the project, owner inspection rights, and sometimes a UCC filing or separate agreement. Some contracts simply prohibit off-site stored-material billing altogether, so check the terms first.
Stored materials are usually subject to the same retainage percentage as installed work, so the contractor receives the billed amount less retention. Because the goods are not yet incorporated, owners scrutinize these line items closely and may release retainage on them only after the materials are installed and accepted.

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