INTERIM PAYMENTS .1 General Principles

The Contractor is required to submit to the Engineer at the end of each monthly period (the first of such monthly periods to commence on the date for commencement of the Works) a statement showing:

(a) The estimated contract value of the work done in accordance with the Contract up to the end of such monthly period with sums payable in respect of Nominated Sub-contractors listed separately;

(b) A list of materials delivered to the Site for use in the permanent work and their estimated contract value; and

(c) All further estimated sums, which the Contractor considers to be due to him under the Contract.

The statement shall be prepared on a form supplied by and at the expense of the Contractor, and the style and number of copies shall be as determined by the Engineer. The Contractor shall complete the required number of copies of the statement and deliver them to the Engineer for checking and, if necessary, correction in accordance with GCC Clause 79.

To facilitate checking and correction, the Contractor shall also submit an electronic copy of his statement, in a format agreed by the Engineer. One corrected hard copy shall be returned to the Contractor.

According to GCC Clause 79(1), the Engineer shall value and certify Contractors’

interim payment within 21 days of receiving Contractor’s statement, and the Government shall effect payment to the Contractor within a further 21 days. Notwithstanding this contractual provision, SDEV (then S for W) gave directive in April 2000 and re-confirmed in January 2001 to achieve a 90% administrative target to effect payment of Contractors’

interim accounts within 25 calendar days, for helping Contractors’ cash flow in the “Helping Business Programme”.

The payment to the Contractor should be the sum, which in the opinion of the Engineer is due, based on the rates in the Contract where appropriate, in respect of the following:

(a) The estimated value of the permanent work executed,

(b) The estimated value of any Temporary Works or preliminary items for which a separate sum is provided in the Bills of Quantities,

(c) The estimated value of materials with proof of ownership from the Contractor for inclusion in the permanent work and not being prematurely delivered to and being properly stored on the Site,

(d) The estimated sums payable in respect of Nominated Sub-contractors, and (e) Any other estimated sum, which the Contractor is entitled in accordance with

the Contract.

Provided that the total certified sum should be adjusted by the Engineer to take into account the retention of the percentage stated in the Contract until the sum retained reaches the limit of Retention Money and any adjustment to be made for fluctuations in the cost of labour and materials.

The quantities ascertained and determined by the Engineer for valuing an interim payment may be given in fractions of a unit.

The assessment of quantities for interim payments should be based on the Interim Payment Abstract Sheets which record quantities abstracted from site measurements and surveys on as-constructed drawings. The Interim Payment Abstract Sheet should be prepared on a form as shown at Appendix 9.10 of Chapter 9 (Measurement Procedure). See Chapter 9, paragraph 3.3.2, for more details.

The method of assessing quantities may vary according to the nature of the work but every effort should be made to ensure neat and clear records, which are agreed, by both the ER and the Contractor.

Note: 1. When assessing quantities of earthworks by lorry loads or barge loads, check surveys should be carried out every three months and the quantity per lorry/barge load should be adjusted if necessary.

2. Any measurements or survey computations taken solely for interim payment purposes should be filed but should be clearly marked INTERIM ONLY.

7.2.2 Procedure

In order to meet the administrative target of effecting Contractor’s payment within 25 calendar days as described in paragraph 7.2.1, the following progress record sheet or similar workflow procedure should be adopted by departments. However, the procedure as shown is for illustrative purpose only and each department may have their internal procedure for processing interim payment to suit departmental situation and the relevant departmental instructions should be referred to.

Interim Payment Certification - Progress Record Date

To Action Action Deadline ¹

In Out

Signature

GR Account received and Progress Record Sheet passed to ER

D minus 16 WD ²

ER Account received and passed to Inspector

D minus 15 WD

Inspector Quantities checked and passed to ER

D minus 12 WD

ER Account checked and passed to SSO(Q)

D minus 10 WD

SSO(Q) Bill casting checked and passed to Accounts Section

ER Interim Payment Certificate signed

D minus 3 WD

SE Employer’s Statement for Payment and Payment Voucher signed and passed to Accounts Section

GR Accounts copied to Site Office and filed

-

Notes:

1. The exact calendar date of action deadline should be entered in the column, taking into account any intervening public holidays. The required action deadlines are for guidance only. Departments should work out their particular dates on its own merits.

2. WD = Working Days (including Saturday). The numbers of working days shown are for a typical cycle and indicative only. Action period of certain activities may have to be reduced due to extra public holidays in some circumstances e.g. Easter Holidays.

3. D = Deadline for WPOCS online authorisation which should be within 20 calendar days on receipt of IP from the Contractor.

Contractor’s accounts, including the electronic copy, must be submitted in their final form with an accompanying dated letter, so that the date of receipt of the account is recorded.

The General Registry should stamp the account and prepare the Interim Payment Certificate Progress Record Sheet with the action dates filled in the appropriate columns. These, including the electronic copy, should then be passed in a loose jacket by hand to the ER. The Contractor’s covering letter should be inserted into the main file and should be passed to the appropriate Senior Engineer for information.

The ER should check and sign the account, making such alterations as he considers necessary on the electronic copy and print out a hard copy of the corrected account. The ER should at least retain a copy of the uncorrected account in electronic form. His check should comprise checking the correctness of all quantities, that the work is being paid for under the appropriate items, the extension of quantities and rates, and the summation of the amounts shown against each item. He may request assistance from his Quantity Surveyors, Assistant Engineers, Inspectors of Works, SSO(Q) and SO(Q) as appropriate, but should be responsible for ensuring that all such checks have been carried out within the stipulated periods.

If, for any reason, the ER finds that the account is invalid or cannot be certified, he should advise the Contractor accordingly in writing explaining the reasons and should return the account.

The ER should pass the corrected account both in hard and electronic copies to the Accounts Section, dating and signing the appropriate columns of the Interim Certificate Progress Record. The corrected account should not be returned to the Contractor for re-typing before passing to the Accounts Section.

The standard form at Appendix 7.19, which is based on Form EDD 27 or other relevant forms used in each individual department, on Engineer’s Certificate shall be used. If the Engineer has not delegated authority to certify interim payment under GCC Clause 79(1) to the ER, the Certificate shall be signed by the Engineer.

The Employer’s statement for Payment should be signed by an officer appointed by the Project Controller and such person should not be the Engineer nor the Engineer's Representative. After the account is authorised online by the Accounts Section, the Treasury will arrange for payment to the Contractor by direct bank credit and will also notify the Contractor accordingly. The Treasury normally takes three working days (excluding Saturday) to effect payment with an aim to achieve the administrative target of payment within 25 calendar days of receipt of accounts from the Contractor. A copy of the Payment Voucher and Engineer’s Certificate shall be sent simultaneously to the Contractor and DEVB.

7.2.3 Minimum Amount

The minimum payment to be made in an interim certificate is given in the Appendix to the Form of Tender. Minimum payments are specified to avoid the unproductive administrative effort necessary to prepare an interim certificate and may give an incentive to the Contractor to proceed with due diligence. It is recognised that in some circumstances a low value of completed work may be the result of the type and timing of the work being undertaken, extensive adverse weather or delays in making part of the Site available for work to proceed etc, and, is not due to any failure by the Contractor to make diligent progress.

When there are circumstances of this nature, consideration should be given to exercising the discretionary powers under the Contract in favour of certifying payment for an amount less than that shown in the Appendix to the Form of Tender. See also LWBTC No. 7/87.

Should the ER consider that there are grounds for issuing a certificate in a sum less than the specified minimum amount then before any detailed checking is carried out these grounds are to be stated in the payment file for consideration by the Engineer who will decide if a certificate is to be issued or not.

7.2.4 Contract Price Fluctuation

The operation of Contract Price Fluctuation (CPF) procedure is contained in ETWB TCW No. 21/2003. Index numbers for civil engineering contracts, entitled “Index Numbers of the Costs of Labour and Materials used in Public Sector Construction Projects (April 2003=100)” compiled by the Census and Statistics Department shall be used for calculating the CPF.

7.2.5 Deductions

In preparing the “Employer’s Statement for Payment” on the standard form at Appendix 7.19, deductions shall be made in respect of the following, where appropriate:

(a) Previous payments - Since the Engineer’s Certificate is based on the total and hence cumulative value to which the Contractor is entitled (adjusted for Retention Money and price fluctuations), deductions will have to be made on all except the first certificate, in respect of previous payments.

(b) Liquidated damages - refer to paragraph 8.2.

(c) Value of materials supplied by the Employer.

(d) Other deductions - the contractual grounds for such deductions shall be stated.