Progress Claims & Certificates Flashcards
Under the provisions of an ABIC contract who pays the contractor?
The owner
Describe the process as set out in the ABIC contract to be followed by the contractor when requesting payment
The contractor will issue a progress claim at particular stages in the building program (with a limit of one per month). The claim is not a tax invoice. The claim must include the contractor’s valuation of the necessary work completed and materials and equipment delivered to site for incorporation into the works. The claim must identify any GST and be accompanied by a declaration that all wages to subcontractors have been paid.
Under the provisions of an ABIC contract who checks the contractor’s request for payment and how?
The architect will then assess the claim by attending to site and assess the work completed to date and whether this equals whole or part of the claim. The architect then prepares and issues a progress certificate to the owner and contractor of the amount payable by the owner to the contractor. The contractor then issues the owner an invoice with this amount, which the owner must pay within 7 calendar days (unless otherwise stated).
Under the provisions of an ABIC contract what are the owner’s obligations with regard to payments?
The owner is obliged to pay the amount certified by the architect within 7 calendar days of receiving the contractor’s tax invoice for this amount.
What happens if there is a disagreement about how much to pay the contractor?
As the architect is the contract administrator, they decide how much the owner must pay to the contractor for each progress certificate. Under the contract, the owner is obliged to pay the certified amount. The owner can take legal proceedings against the contractor.
In the ABIC contract where are the payment terms described? What happens if the contractor does not get paid within in these terms?
The payment terms are described in Section N: Payment for the works. If the contractor does not receive payment the interest is charged as indicated in Schedule 1, Item 28.
Is it OK for an owner to pay for things that have been constructed off site but not yet delivered to the works?
Unless it is specifically stated in the schedules, no, the owner should not have to pay for items that are off‐site. Particular contracts may allow for this i.e. Major Works Contract.
Assume you have checked these items in the factory and confirmed they are all completed and ready for delivery. On the basis of your answer what risks are there to the contractor, to the owner +/or to the project?
Risks to Contractor: They are liable to replace the product if there is an error or issue even though it has been “checked” by the architect.
Risks to Owner/project: the items never get delivered to site and delay the progress of building.
How can these risks be minimised after checking something in the factory?
Proof of the item i.e. photographs
Guarantee – impartial 3rd party to certify
Proof of ownership
Insurances
Under the provisions of an ABIC contract when does the contractor get the last payment?
Final claim is made when the defects liability period has ended. The architect will receive a written request from the architect to submit the final claim. Once the claim has been submitted, the contractor cannot make any further claims.
What must you do when before making your assessment of the current value of the works?
Visit site and assess the work completed for that stage.
