fidic 1987 advance payment issue
fidic 1987 advance payment issue
(OP)
Dear all
I am doing a road project in africa, the general conditions of contrat is "the conditions of contract for works of civil engineering construction-Part 1, fourth edition, reprinted in 1988 with additional amendments, reprinted in 1992 with further amendments( FIDIC)".
In the particular conditions, the client amended the clause 60.12 -advance payment to :
“the employer MAY make an interest free advance payment to the contractor for the cost of mobilization in respect of the works, in a lump sum of any amount not exceeding ten percent of the contract price named in the letter of acceptance and award. Non-payment or delayed payment of the advance shall not be a cause for any claim whatsoever.The contractor is expected to have adequate financial resources to mobilise and execute the work with due diligence without the advance payment being made. Payment of such advance amount will be due under a separate certification by the engineer after:
1. Provision of Performance security
2. Provision of Advance payment guarantee(APG).
…”
The contractor submite the performance security and APG(10%-the max of contract sum) to request for advance payment, and after 200 days, the client made a payment less than 1% of the toal advance payment (10%). And then the client asks the contractor to source his own fund to execute the work.
My questions are including:
1, does the client commit himself to execute the project?
2, is the contractor entitled to ask for more advance payment to a maxiam of 10% of contract sum, or to the amount of advance payment guarantee limit?
3, if the client asks the contractor to finance the project, is that meaning change of contractual provisions? since in the bidding document, the client doesn’t indicate or mean to require the contractor to finance and execute the project, nor there’s any provisions for the settlement of such finance charges.
4, the client alleged that the financial capacity demonstrated in the tender document shall be the commitement that the contractor can finance the project, and such capacity shall demonstrate to the client of the same. Shall the contractor demonstrate his finance ability to the client due to the client’s default of non-payment (advance payment)?
5, the contractor mobilized fully to site already and commenced the earthwork with around 1million dollar, shall the contractor continue to input more cash to push the project?
Thanks for your prompt attention.
I am doing a road project in africa, the general conditions of contrat is "the conditions of contract for works of civil engineering construction-Part 1, fourth edition, reprinted in 1988 with additional amendments, reprinted in 1992 with further amendments( FIDIC)".
In the particular conditions, the client amended the clause 60.12 -advance payment to :
“the employer MAY make an interest free advance payment to the contractor for the cost of mobilization in respect of the works, in a lump sum of any amount not exceeding ten percent of the contract price named in the letter of acceptance and award. Non-payment or delayed payment of the advance shall not be a cause for any claim whatsoever.The contractor is expected to have adequate financial resources to mobilise and execute the work with due diligence without the advance payment being made. Payment of such advance amount will be due under a separate certification by the engineer after:
1. Provision of Performance security
2. Provision of Advance payment guarantee(APG).
…”
The contractor submite the performance security and APG(10%-the max of contract sum) to request for advance payment, and after 200 days, the client made a payment less than 1% of the toal advance payment (10%). And then the client asks the contractor to source his own fund to execute the work.
My questions are including:
1, does the client commit himself to execute the project?
2, is the contractor entitled to ask for more advance payment to a maxiam of 10% of contract sum, or to the amount of advance payment guarantee limit?
3, if the client asks the contractor to finance the project, is that meaning change of contractual provisions? since in the bidding document, the client doesn’t indicate or mean to require the contractor to finance and execute the project, nor there’s any provisions for the settlement of such finance charges.
4, the client alleged that the financial capacity demonstrated in the tender document shall be the commitement that the contractor can finance the project, and such capacity shall demonstrate to the client of the same. Shall the contractor demonstrate his finance ability to the client due to the client’s default of non-payment (advance payment)?
5, the contractor mobilized fully to site already and commenced the earthwork with around 1million dollar, shall the contractor continue to input more cash to push the project?
Thanks for your prompt attention.
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