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Construction Law/Payment and fines for delay

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Question
Dear Florin,
Here I come back to you with this enquiry with full confidence of satisfied answer and thank you a lot for tremendous job you are doing here in this forum.
I have a project following FIDIC 1987 reprinted 1992 fourth edition. My duty is just to review and check the payment and certify the due amount (I am not the Engineer, the client played as The engineer).
The question is about final payment.
As we finished the project and expecting to receive final payment from the contractor, my question is that;
If according to the taking over certificate which has been issued to the contractor we found there is a duration between ;
Project ending date (as per the contract) and the substantial completion date approved by the employer  there is about 30 days i.e. there is a delay and before there is no letter from the client approving any EOT.
In this case do I have to hold the payment and asked both parties (contractor and employer) to sort out this issue ?
Or I will go ahead and certify the payment?
Contractually does the employer have right to deduct for delay as per the contract from the payment or it should be a separated claim by the employer and the submitted payment should not be in such dispute?

Answer
Hello M.Dzaie,


Glad to have you back and glad I can help - thank you for your new query.

I understand you are doing a sort of technical assistance for the Employer - yes many employers love playing the Engineer.

I also understand you are awaiting the final Statement from the Contractor, not the "final payment".

Mind you, I do not have at hand that FIDIC Book, as I am currently abroad, will only return home at the end of this week, hence, I will base my answer on common sense and general knowledge, rather than on specific provisions. Suggest thus you check related Sub-Clauses, prior taking my answer on board.

First question you should look at, is what is your task: are you to deal with delays too, or just process payment documents? Are you to deal with the contractual aspects, or just with the arithmetic?

As a general approach, I'll assume you have to cover everything, so will draft my answer from that perspective.

Firstly, if no EoT granted, then obviously damages have can be applied. Question is, can they be applied straight forward, or a procedure must be fulfilled in that respect.

Please check if for applying delay/ liquidated damages, the Employer must issue first a claim notice, or simply apply them - that's your basic question and answer should be fully covered in the Contract.

As for holding the payment, that is very dangerous. You rather certify a payment by deducting due delay/ liquidated damages - again, I am uncertain of what exactly is your position, but for the Employer, failure to issue a Certificate is not good, regardless the reason.

The answer might become more and more complicated and unclear, as I try to answer various options, so I better stop here.

Please thus go and check exactly what the Contract says, then come back to me with some details, so we can iteratively develop a proper answer. Or wait for a week, till I'll get back home and lay my hands on that FIDIC Book.

Is that approach OK with you? Look forward getting the details, so we can move forward.  

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Florin NICULESCU

Expertise

Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.

Experience

Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Organizations
Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers www.aric.org Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List www.drb.org and of DRBF Chapter for Eastern Europe http://dabdrb.googlepages.com Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List http://www.sidir.pl/sidir/index.php?action=czlonkowie&a2=r Member of “AllExperts.com” volunteers pool http://www.allexperts.com/user.cgi?m=4&expID=85358&catID=914 Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States www.constructiondisputes-cdrs.com

Education/Credentials
- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme (http://www1.fidic.org/resources/adjudicators/pupilage.html) - FIDIC Accredited Adjudicator

Past/Present Clients
- Several State organisations/Ministries , such as Ministry of Transport, National Admistration of Roads, Ministry of Regional Development (former Ministry of European Integration), Public Works and Housing, Central Contracting and Financing Unit in Romania and also in Turkey, Croatia and Macedonia - Numerous Western based private consultancy companies - full CV and other relevant information available at www.abinitio.ro

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