CONTRACT PAYMENTS

&
VARIATIONS

Advance payment(clause 51)

The Employer shall make advance payment to the
contractor in an amount to 20% of the Initial
Contract Price excluding provisional sums and
contingencies, within 14 Days after furnishing of an
unconditional guarantee in a form and by a bank or
company acceptable to the Employer. The
guarantee shall remain effective until the advance
payment
has
been
repaid(clause
51.1,
ICTAD/SBD/01).
The Contractor is used the advance payment only to
pay for Equipment, Plant, Materials and Mobilization
expenses required specially for execution of
Contract(Clause51.2 ICTAD/SBD/01).
The advance payment shall be repaid by deducting
proportions and repaid in full when total certified

clause 42
- Reasonable Valuation
-The Contractor shall submit to the
Engineer monthly
statements of the
estimated value of the work
executed.
- The Engineer shall check and certify monthly
statement within 21 days of the receipt of
the
contractors statement
The Employer shall pay the amount certified
within 14 Days

Final Certificate(clause 55)

Upon completion of the Defects Liability Period the
Contractor shall request the Engineer to issue a Final
Certificate and the Engineer shall issue the Final
Certificate upon being satisfied that the Contractor has
rectified the Defects(clause 55.1, ICTAD/SBD/01).

Retention
Retention money is warranty for hidden
defects during construction, including the 1year defects liability period after project
completion. Retention money is therefore
released after the end of the 1-year defects
liability period and when the certificate of
acceptance is already issued. If the
contractor wants the release of the retention
money before the lapse of the 1-year defects
liability period, replacement by the surety
bond may be allowed.

Retention(clause 48)
The Employer shall retain from each payment due to the
Contractor the proportion stated in the Contract Data
subject to the limit of retention stated in the Contract
data(clause 48.1, ICTAD/SBD/01).

When to release?
On Completion of the whole of the Works, first half the
total amount retained shall be repaid to the contractor
and second half when the Defects liability Period has
passed(clause 48.2 ,ICTAD/SBD/01).

Releasing against a Bond at the time

of completion
Reserving money to pay after D/L
period

What happens when the quantity in the BOQ is

not sufficient or no provision in the BOQ
Work needed to complete the entire scope(Remeasurements)
Things that are nice to accompany( Variations)
Things that improves the long-term
sustainability(Variations)
Price Escalation & others
There is BOQ provision but needs engineers approval to
proceed
Provisional sums
Remember to refer contractual provisions

Definition of Variation
A Variation may be an addition, omission
or

substitution

to

the

design

or

specifications, discrepancy between any

two or more contract documents or any
statutory requirements, an error in or
omission in the contract bills etc.