60 Questions
What do 'Ln', 'En', 'Mn' represent in the context of cost indices?
Current cost indices or reference prices for period 'n'
When should the cost indices or reference prices stated in the table of adjustment data be used?
Always, without any exceptions
What should be done if the source of the cost indices is in doubt?
It should be determined by the Engineer
What do 'Lo', 'Eo', 'Mo' represent in the context of cost indices?
Base cost indices or reference prices for the Base Date
What is the purpose of referring to the values of the indices at stated dates?
For clarification of the source
What does the term 'Uncontrolled Copy' imply in the context of the document?
The document is not legally binding
What does the term 'Licensed copy' indicate about the document?
It is a verified and authorized version
What is the purpose of Sub-Clause 14.5?
To include amounts for Plant and Materials sent to the Site and a reduction when the contract value is included as part of the Permanent Works
Under what conditions will the Engineer determine and certify each addition of Plant and Materials?
If the Contractor has kept satisfactory records and submitted a statement of the Cost of acquiring and delivering the Plant and Materials to the Site, supported by satisfactory evidence
When will the Payment Certificate include the applicable reduction for the relevant Plant and Materials?
At the time when the contract value is included under sub-paragraph (a) of Sub-Clause 14.3
What is the equivalent amount of the Engineer’s determination of the cost of the Plant and Materials for the additional amount to be certified?
Eighty percent
When should the Contractor submit non-binding estimates of the payments which he expects to become due during each quarterly period?
At quarterly intervals, until the Taking-Over Certificate has been issued for the Works
Under what circumstances will the Engineer proceed to agree or determine revised instalments for the Contract Price?
If actual progress is found to be less than that on which the schedule of payments was based
What is the purpose of Sub-Clause 14.4?
To specify the instalments in which the Contract Price will be paid
What is the maximum period within which the Engineer must issue an Interim Payment Certificate after receiving a Statement and supporting documents?
28 days
Under what conditions can an Interim Payment Certificate be withheld?
If the Contractor was failing to perform any work or obligation in accordance with the Contract
When should the first instalment of the advance payment be made by the Employer?
Within 21 days after receiving the documents in accordance with Sub-Clause 4.2
What financing charges are applicable if the Contractor does not receive payment in accordance with Sub-Clause 14.7?
Calculated at the annual rate of three percentage points above the discount rate of the central bank
When can the first half of the Retention Money be certified by the Engineer for payment to the Contractor?
When the Taking-Over Certificate has been issued for the Works
What proportion of the Retention Money shall be certified and paid if a Taking-Over Certificate is issued for a Section or part of the Works?
Two-fifths (40%) of the proportion calculated by dividing the estimated contract value of the Section or part, by the estimated final Contract Price
What period triggers the calculation of financing charges if the Contractor does not receive payment?
The date for payment specified in Sub-Clause 14.7
What does a Payment Certificate indicate?
The Engineer’s acceptance, approval, consent or satisfaction
What is the maximum period within which the Employer must pay the amount certified in the Final Payment Certificate?
56 days
What is the method for converting the 'currency of index' into the relevant currency of payment?
Using the selling rate established by the central bank of the relevant currency on the required date
When is the provisional index for the issue of Interim Payment Certificates determined?
Until each current cost index is available
Under what circumstances will the adjustment of prices be made using each index or price applicable 49 days prior to the expiry of the Time for Completion of the Works?
If the Contractor fails to complete the Works within the Time for Completion
When does the Contractor submit a proposed breakdown of each lump sum price in the Schedules to the Engineer?
Within 28 days after the Commencement Date
When does the Engineer issue an Interim Payment Certificate for the first instalment of the advance payment?
After receiving a Statement and the Performance Security
When do deductions commence in the Payment Certificate for the advance payment?
When the total of all certified interim payments exceeds ten per cent (10%) of the Accepted Contract Amount
When does the whole balance outstanding for the advance payment become due and payable by the Contractor to the Employer?
If the advance payment has not been repaid prior to the issue of the Taking-Over Certificate for the Works
What is the maximum period within which the Employer must pay the amount certified in the Final Payment Certificate?
56 days
When can the first half of the Retention Money be certified by the Engineer for payment to the Contractor?
After the issuance of the Taking-Over Certificate
What financing charges are applicable if the Contractor does not receive payment in accordance with Sub-Clause 14.7?
3 percentage points above the discount rate of the central bank
What proportion of the Retention Money shall be certified and paid if a Taking-Over Certificate is issued for a Section or part of the Works?
Two-fifths (40%)
What does a Payment Certificate indicate?
Amount due to the Contractor
What is the method for converting the 'currency of index' into the relevant currency of payment?
Using the exchange rate on the date of the Payment Certificate
When does the Contractor submit a proposed breakdown of each lump sum price in the Schedules to the Engineer?
Within 28 days after receiving the Statement and supporting documents
What is the equivalent amount of the Engineer’s determination of the cost of the Plant and Materials for the additional amount to be certified?
20%
What should be done if the source of the cost indices is in doubt?
The Parties should agree on a new source
What is the method for converting the 'currency of index' into the relevant currency of payment?
Using the selling rate established by the central bank of the relevant currency on the required date
When is the provisional index for the issue of Interim Payment Certificates determined?
Until each current cost index is available
Under what circumstances will the adjustment of prices be made using each index or price applicable 49 days prior to the expiry of the Time for Completion of the Works?
If the Contractor fails to complete the Works within the Time for Completion
When does the Contractor submit a proposed breakdown of each lump sum price in the Schedules to the Engineer?
Within 28 days after the Commencement Date
When does the Engineer issue an Interim Payment Certificate for the first instalment of the advance payment?
After receiving a Statement and the Performance Security
When do deductions commence in the Payment Certificate for the advance payment?
When the total of all certified interim payments exceeds ten per cent (10%) of the Accepted Contract Amount
When does the whole balance outstanding for the advance payment become due and payable by the Contractor to the Employer?
If the advance payment has not been repaid prior to the issue of the Taking-Over Certificate for the Works
Which statement accurately describes the conditions under which the Engineer will determine and certify each addition of Plant and Materials?
The Contractor must keep satisfactory records and submit a statement of the Cost of acquiring and delivering the Plant and Materials to the Site, supported by satisfactory evidence.
Under what circumstances will the adjustment of prices be made using each index or price applicable 49 days prior to the expiry of the Time for Completion of the Works?
When the cost indices or reference prices stated in the table of adjustment data are not published 49 days prior to the expiry of the Time for Completion of the Works.
When can the first half of the Retention Money be certified by the Engineer for payment to the Contractor?
After the issuance of the Taking-Over Certificate for the Works.
What is the purpose of Sub-Clause 14.5?
To address the payment for Plant and Materials intended for the Works.
What does the term 'Uncontrolled Copy' imply in the context of the document?
The document is not authorized for official use and may not reflect the latest updates or changes.
What is the equivalent amount of the Engineer’s determination of the cost of the Plant and Materials for the additional amount to be certified?
80% of the Engineer's determination of the cost of the Plant and Materials.
When should the Contractor submit non-binding estimates of the payments which he expects to become due during each quarterly period?
Within 42 days after the Commencement Date and at quarterly intervals until the Taking-Over Certificate has been issued for the Works.
What does the Schedule of Payments in the Contract specify?
The estimated contract values for interim payments and may require the submission of non-binding estimates at quarterly intervals
When can the Engineer certify the addition of Plant and Materials?
When the Contractor submits a statement of the cost and meets conditions such as shipping or delivery to the site, supported by evidence
What should be done if the source of the cost indices is in doubt?
The Contractor should notify the Employer and seek clarification on the source of the cost indices
When does the Payment Certificate include the applicable reduction for the relevant Plant and Materials?
When the Plant and Materials are delivered to the site
What is the equivalent amount certified for Plant and Materials?
Eighty percent of the Engineer’s determination of their cost
What is the purpose of Sub-Clause 14.5?
To address the addition and reduction of Plant and Materials in Interim Payment Certificates
What does the Statement for Interim Payment Certificates include?
Estimated contract value of Works executed, deductions for retention, changes in legislation and cost, advance payment, and other additions or deductions due under the Contract
Study Notes
Interim Payment Certificates and Schedule of Payments in Construction Contracts
- The Statement for Interim Payment Certificates in construction contracts includes several items expressed in the currencies of the Contract Price.
- The items include estimated contract value of Works executed, deductions for retention, changes in legislation and cost, advance payment, and other additions or deductions due under the Contract.
- The Schedule of Payments in the Contract specifies the estimated contract values for interim payments and may require the submission of non-binding estimates at quarterly intervals if not defined.
- Sub-Clause 14.5 addresses Plant and Materials intended for the Works, where Interim Payment Certificates should include amounts for such items sent to the site and reductions when their contract value is included in the Permanent Works.
- The Engineer certifies the addition of Plant and Materials if the Contractor maintains satisfactory records, submits a statement of the cost, and meets conditions such as shipping or delivery to the site, supported by evidence.
- Plant and Materials listed in the Appendix to Tender for payment when shipped should be en route to the site, described in a clean shipped bill of lading, and protected against loss, damage, or deterioration.
- For Plant and Materials listed in the Appendix for payment when delivered to the site, they should be properly stored on the site, protected, and appear to be in accordance with the Contract.
- The additional amount certified for Plant and Materials is equivalent to eighty percent of the Engineer’s determination of their cost, considering relevant documents and the contract value.
- This additional amount for Plant and Materials should be in the same currencies in which payment will become due when their contract value is included in the Interim Payment Certificates.
- The Payment Certificate at that time should include the applicable reduction equivalent to the additional amount for the relevant Plant and Materials.
- The Contract Price is payable in various currencies, and the sequence of items in the Statement for Interim Payment Certificates is specified, including deductions, additions, and certified amounts from previous Payment Certificates.
- The Schedule of Payments in the Contract may define the estimated contract values for interim payments, with provisions for adjustments if actual progress is less than that on which the schedule was based.
This quiz examines the components of Interim Payment Certificates and Schedule of Payments in construction contracts, including estimated contract values, deductions, additions, and conditions for the certification of Plant and Materials. It also covers the currencies in which the Contract Price is payable and the specified sequence of items in the Statement for Interim Payment Certificates.
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