Construction Law/Lump sum


Dear Sir
I would like you advice on the following issue:

We, the Supervision consultant for the project based On FIDIC 2005 have been since the beginning of Project began in late 2010 withholding some percentage, 20% from the lump sum specified in Bill 100, e.g Pay item Provision of Laboratory equipment and etc because the engineer's field lab is still not fully furnished.
1. Are we right to withhold certain amount from lump sum, even the contractor failed to deliver required equipment.
2. And what is the difference with paying lump sum and paying monthly, as the contract says, does it mean that the contractor has to deliver a receit or something to be paid at month rate?
Tahnk you

Dear Murod,

Without sight of the Contract documents, my advice will be general in nature.  

1. You are not withholding payment; you are paying for what has been done.  If part of the equipment has not be delivered, then you cannot certify payment for it.  I cannot say whether 20% is a reasonable amount of not.  It could be that the preambles to the schedule of rates forbids payment of a lump sum item until that item is complete.  There is something wrong if the Contractor has not delivered all items in two years.  I suggest that it is more important to resolve the problem of non-delivery, because it is obvious that non-payment is not persuading the Contractor to complete delivery.  

2. Some items, such as maintenance of vehicles, offices or laboratories, are paid as a monthly rate as the quantity is uncertain.  The Contractor submits his monthly statement of account including these items and you certify payment if the work has been done.  The Contractor does not have to submit any justification of his costs.

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
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Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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