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Construction Law/Schedule of Payment under FIDIC Yellow


Hello.  I am a Japanese Civil Servant dealing with international Works Contracts applying FIDIC conditions of Contract. I have a question concerning Payment under FIDIC Yellow book (1999).

FIDIC Contract Guide (2000) specifies as following;

“Under P&DD or EPCT, the Schedule of Payments could be in one of the following forms;


-The Schedule could be based on actual progress achieved in executing the Works, i.e., on completion of defined milestones.  This method is considered preferable, but it necessitates careful definition of the payment milestones.  Disagreements may arise when the work required for a payment milestones is nearly achieved but the balance cannot be completed until some month later.”

From the explanation above, may I understand that;

1)a payment milestones aren’t (necessarily) equal to “Sections” which are to be specified in the Appendix to Tender in accordance with GC
2)If 1) is correct, detailed milestones for payment are normally predetermined in a bid stage “by the Employer”, not proposed by bidders (the Contractor).

Hope that you kindly understand the points of my questions and answer as appropriate.  

With best regard

Dear Tom,

1) I try to arrange it so that payment milestones equate to about one month's work, such as, for a small building, foundations and ground floor slab, roof and watertight, internal fittings and finishes completed. Yes, there can be discussions if the payment is held over a month due to incomplete work, but this problem can be overcome if the Engineer and the Contractor are working as a team.
2) Correct, or at least they should be to avoid inconsistencies in the various bids.  

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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 . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
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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