Meaning
International construction and procurement contracts of the FIDIC standard set out the procedures and requirements for progress payments and the submission of monthly statements by the contractor to the employer. This specific contractual provision, known as standard clause 14 3, outlines the detailed documentation and supporting evidence that must accompany each payment application to verify the completed work. It acts as the primary mechanism for managing cash flow and tracking progress on large-scale infrastructure and industrial projects.
Adhering to this provision ensures that payments are made on time and that disputes over completed quantities are minimized. It governs the administrative flow of payment requests between the contracting parties throughout the life of the project.
Application Procedure
Monthly statement submissions must follow the specific timing and format requirements set out in the contract documents. Under standard clause 14 3, the contractor compiles a detailed report of the work executed up to the end of the month, along with the corresponding monetary values. This statement must include supporting documents such as measurement sheets and progress photos.
The engineer then reviews this package before issuing a payment certificate.
Contractual Scope
Specific items must be included in each statement, such as the value of the permanent works and any variations. Standard clause 14 3 requires the contractor to list these amounts separately to ensure transparency in the payment process.
Administrative Compliance
Discrepancies in the submitted documents can cause the engineer to reject the payment application or reduce the certified amount. Ensuring compliance with standard clause 14 3 prevents delays in receiving progress payments, which is crucial for maintaining the contractor’s cash flow. If the submittal is incomplete, the review period may be reset, pushing the payment date further out.
Contract managers must ensure that all supporting evidence is compiled and double-checked before the monthly deadline.
