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The document outlines Sub-Clause 14.5 regarding early payment for specified Plant and Materials, emphasizing the necessity of listing these items in the Contract Data for eligibility. It details the conditions for payment when items are shipped or delivered, including the need for documentation and guarantees. Additionally, it introduces Sub-Clause 14.6, which governs the Engineer's process for issuing Interim Payment Certificates and the preconditions for certification and payment.

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14 views3 pages

Before

The document outlines Sub-Clause 14.5 regarding early payment for specified Plant and Materials, emphasizing the necessity of listing these items in the Contract Data for eligibility. It details the conditions for payment when items are shipped or delivered, including the need for documentation and guarantees. Additionally, it introduces Sub-Clause 14.6, which governs the Engineer's process for issuing Interim Payment Certificates and the preconditions for certification and payment.

Uploaded by

Donz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Slide 43: Module 5 - Sub-Clause 14.

5: Plant and Materials (Introduction)

• Title: Early Payment for Key Items: Plant & Materials (14.5)

• Content: Allows interim payment for specified Plant/Materials shipped or delivered


before incorporation. Crucial for cash flow on high-value/long-lead items.

Slide 44: Sub-Clause 14.5 - Applicability Condition (Contract Data)

• Title: Condition Precedent: MUST Be Listed!

• Content: This Sub-Clause shall not apply if no Plant and/or Materials are listed in
the Contract Data for payment when shipped and/or delivered. Listing is
mandatory.

Slide 45: Sub-Clause 14.5 - Statement Inclusion (Add & Deduct)

• Title: How 14.5 Appears in Statements

• Content: Contractor includes under 14.3(v):

o An amount to be added for eligible Plant/Materials shipped or delivered.

o An amount to be deducted when the contract value of that Plant/Material is


later included as part of the Permanent Works under 14.3(i).

Slide 46: Sub-Clause 14.5 - Conditions for Engineer's Agreement (General)

• Title: Engineer's Approval: General Conditions (14.5(a))

• Content: Engineer agrees/determines added amount under 3.7 IF Contractor


submits [cite: 2, 227-230(a)]:

o (i) Satisfactory records (orders, receipts, Costs, usage) available for


inspection [cite: 2, 228(a)(i)].

o (ii) Evidence demonstrating compliance with Contract (e.g., test certs 7.4,
compliance verification 4.9.2) [cite: 2, 229(a)(ii)].

o (iii) Statement of Cost (acquisition & shipping/delivery) with evidence [cite: 2,


230(a)(iii)].

o AND conditions under (b) OR (c) are met...

Slide 47: Sub-Clause 14.5(b) - Conditions for Payment WHEN SHIPPED


• Title: Specific Conditions: Payment When Shipped (14.5(b))

• Content: Requires ALL [cite: 2, 231-235(b)]:

o (i) Item listed in Contract Data for payment when shipped [cite: 2, 231(b)(i)].

o (ii) Shipped to the Country, en route to Site, per Contract [cite: 2, 232(b)(ii)].

o (iii) Described in clean shipped bill of lading (or similar) submitted with:
evidence of paid freight/insurance, other required docs, AND a written
undertaking for a Bank Guarantee [cite: 2, 233-235(b)(iii)].

o Guarantee: Form/issuer consented by Employer, valid until items properly


stored on Site.

Slide 48: Sub-Clause 14.5(c) - Conditions for Payment WHEN DELIVERED

• Title: Specific Conditions: Payment When Delivered (14.5(c))

• Content: Requires ALL [cite: 2, 236(c)]:

o (i) Item listed in Contract Data for payment when delivered [cite: 2, 236(c)(i)].

o (ii) Delivered to AND properly stored on Site, protected, and appear


compliant with Contract [cite: 2, 236(c)(ii)].

Slide 49: Sub-Clause 14.5 - Certification Amount & Guarantee Link

• Title: Payment Details: Amount & Security Link

• Content:

o Guarantee Prerequisite: Engineer has NO obligation to certify payment for


shipped items (under 14.5(b)) until Employer receives the Bank Guarantee.

o Amount Certified: 80% of the amount agreed or determined by the


Engineer.

o Currency: Certified sum in same currencies/proportions as eventual


payment under 14.3(i).

o Deduction: When item valued under 14.3(i), equivalent amount deducted in


same currencies/proportions.

Slide 50: Sub-Clause 14.5 - Key Takeaways & Links

• Title: Module 5 Recap: Plant & Materials Payments


• Content:

o Aids cash flow for listed items only.

o Strict conditions: Listing, documentation (records, compliance, cost),


storage [cite: 2, 227-236].

o Guarantee required for "when shipped" payment.

o Payment = 80% of determined value; deducted later.

• Related Clauses: 14.3(v), 3.7, 14.2.1 (Guarantee form), 7.4, 4.9.2.

Part 4: Certification and Payment Execution Process

Slide 51: Module 6 - Sub-Clause 14.6: Issue of Interim Payment Certificate (IPC)
(Introduction)

• Title: Engineer's Assessment: Issuing the IPC (14.6)

• Content: Defines the Engineer's process for reviewing the Contractor's Statement
(14.3) and issuing the Interim Payment Certificate (IPC). Governs timing, content,
and withholding rights.

Slide 52: Sub-Clause 14.6.1 - Preconditions to ANY Certification

• Title: Gates to Payment: Certification Preconditions (14.6.1)

• Content: NO amount will be certified or paid until:

o (a) Employer has received the Performance Security (per 4.2.1 requirements)
[cite: 2, 243(a)].

o (b) Contractor has appointed the Contractor's Representative (per 4.3) [cite:
2, 244(b)].

Slide 53: Sub-Clause 14.6.1 - IPC Issuance: Timeline & Content

• Title: The IPC: Timing and Mandatory Content (14.6.1)

• Content: Engineer issues IPC to Employer (copy Contractor) within 28 days after
receiving Statement + supporting docs. IPC MUST:

o (a) State amount Engineer fairly considers due [cite: 2, 245(a)].

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