Contract Price And Payment [clause 14] Of Fidic

Blog / 1 Oct, 2023

Clause 14 of the contract encompasses various facets related to payment and financial transactions. It not only addresses matters concerning payment but also delves into the Statement at Completion, the Final Payment Certificate, Discharge, and the Cessation of the Employer's Liability.

This particular clause stipulates that the contract follows a re-measurement approach, and the quantities specified in the Bill of Quantities are regarded as estimates. Notably, there is a provision for an initial advance payment to the contractor. The submission of applications for Interim Payment Certificates is a monthly occurrence, contingent upon the presentation of corroborating documentation and a progress report. It is crucial to note that, unless the amount assessed falls below the predefined minimum specified in the Appendix to Tender, the Engineer holds a 28-day window for the issuance of an Interim Payment Certificate, which states the amount that the Engineer deems to be fair and due. Subsequently, the Employer bears the obligation to remit the certified amount in the currencies designated in the Appendix to Tender. In the event of non-receipt of payment, the Contractor reserves the right to claim compounded financing charges on a monthly basis.

Moreover, half of the retention monies are disbursed upon the issuance of the Taking-Over Certificate. In cases involving multiple Sections, a proportional distribution applies. The remaining retention amount is disbursed either upon the expiration of the latest Defects Notification Period or, if Sections are involved, a proportion is released upon the expiration of the Defects Notification Period pertaining to that specific Section. Within a timeframe of 84 days from the receipt of the Taking-Over Certificate, the Contractor is obligated to submit a Statement at Completion, which must encompass an estimation of all sums that the Contractor believes are owed.

Within a span of 56 days following the reception of a Performance Certificate, the Contractor is mandated to submit a Final Statement. This Final Statement must be accompanied by a written discharge, affirming that the total amount specified in the Final Statement represents the comprehensive and definitive settlement of all outstanding monetary obligations. Subsequently, the Engineer is tasked with issuing a Final Payment Certificate to the Employer. Importantly, the contract establishes that the Employer holds no liability towards the Contractor, except in cases where the Contractor has expressly included an amount pertaining to that particular matter in both the Final Statement and the Statement at Completion.