Clause 14 deals with all aspects of payment. It also deals with the Statement at Completion, the Final Payment Certificate, Discharge and Cessation of the Employer’s Liability. The Clause provides that this is a re-measurement contract and that the quantities stated in the Bill of Quantities are estimated. There is provision for an advance payment to be made to the Contract. Applications for Interim Payment Certificates are made monthly and these must be supported by documents and a report on progress. Unless the amount assessed is less than the minimum amount set out in the Appendix to Tender, the Engineer has 28 days to issue an Interim Payment Certificate, which states the amount the Engineer fairly determines to be due. The Employer thereafter has an obligation to pay the amount certified, in the currencies named in the Appendix to Tender. In the event that payment is not received the Contractor can claim financing charges compounded monthly. Fifty per cent of the retention monies are paid when the Taking-Over Certificate is issued. Where there are Sections then a proportion is paid. The balance of retention is paid on the expiry of the latest Defects Notification Period or, where there are Sections, a proportion at the expiry of the Defects Notification Period for that Section. Within 84 days of receiving the Taking-Over Certificate the Contractor submits a Statement at Completion. This must include an estimate of all sums which the Contractor considers due. Within 56 days of receiving a Performance Certificate, the Contractor submits a Final Statement. The Contractor must also submit with the Final Statement a written discharge which confirms that the total of the Final Statement represents full and final settlement of all moneys due. The Engineer then issues to the Employer a Final Payment Certificate. The Contract states that the Employer shall have no liability to the Contractor except to the extent that the Contractor has included an amount expressly for that matter in the Final Statement and also the Statement at Completion.
Clause 12 deals with Tests after Completion. It is more
FIDIC 1999 is a re-measurement contract so that the Employer takes the risk of variations to the quantities and, in certain cases, to the rates and prices which may be applied for the work executed. If the Employer wishes to employ a Contractor on a lump-sum or cost plus basis then this clause needs to be deleted. Sub-Clause 12.1 deals with the measurement of the works. Sub-Clause 12.2 does not include a reference to any standard method of measurement but states that the works are to be measured in accordance with the Bill of Quantities or other applicable Schedules. The lack of reference to a particular standard method of measurement has been criticised. Sub-Clause 12.3 deals with evaluating the appropriate rate or price for the works. There are three methods of evaluating the works:- a) The rate or price specified for such item in the Contract; but if there is no such item b) The rate or price specified for similar work. c) However, in certain specified circumstances, a new rate or price shall be appropriate. Sub-Clause 12.4 deals with the valuation of omissions from the Work. As this is a re-measurement contract there is no warranty that the quantities measured in the Bill of Quantities are accurate. Nael Bunni suggests that when quantities within the Bill of Quantities are exceeded then payment should be at the rates set out in the Bill. There have been some cases where the courts have adopted differing approaches; however, in those cases the wording of the remeasurement clause differed to that within FIDIC. These decisions have been described by Dr. Bunni as being controversial.