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Construction Law/Payment of Materials-On-Site (MOS)

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Question
Hi,

When evaluating interim payment applications, MOS is treated under a separate heading.

Now my question is: What if the payment for MOS is considered as part of the measured works (Main Bill), say for ex: contract amount for reinforcement is QAR 100,000 then someone certified 5% of that for MOS and assuming the Client agreed to this, are there risks in this arrangement that the Client should be aware of?

Thanks.

Bernie

Answer
Dear Bernie,

Thank you for your question.  I deeply apologies for the delay in replying. I was on a trip.

Now to your question,  MOS is usually calculated and stated under a separate heading in valuation or certificate statements. I think this is a good practice that has been laid down and standardized over years. Few advantages of this is that, some contracts may not allow for payment of materials on site while some may allow a discounted percentage of the MOS prices to be approved for payment in interim certificate. In such case, there will be complications in showing the calculations if not stated separately.  One of the risks to the client if lumped with work done is that,  there will not be distinction to separate these sums on certificate statements and as such for future references and analysis for any reconciliation at any time,  it becomes cumbersome to identify the whether what is being approved for payment for MOS is commensurate with the pricing trends demonstrated and agreed under the contract.  There may be chances of overpayment or underpayment as whatever percentages agreed will not have a realistic basis for the sum for the MOS. The process you have suggested could only work out if the rate or amount of each items under the BOQ has been carefully analyses and the percentage content for the materials have been identified and agreed under the contract,  then,  once all the materials for such specific items have been delivered on site,  the appropriate percentage analysed for the MOS could be included in certificate statement for payment but must still be stated separately.

Basically,  it is a good practice to show MOS separately as a good quantity surveyor.

Hope I am clear enough.

Thank you.

Femi

Construction Law

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Femi Alofe

Expertise

I can answer all questions relating to the followings: 1. Contract Administration - variations, contract clauses interpretation, all post contract procedures, valuations and certificates questions, extension of time issues and prolongation cost matters. 2. Contract Practice - Any questions regarding forms of contract like JCT, FIDIC & other Bespoke forms. 3. Quantification, measurements and Estimating questions 4. Contracts and construction law questions and dispute resolutions problems. 5. All FIDIC Conditions of contracts

Experience

Out of my 24 years experience in construction industry, i have the following specific experience: 1. Contract Administration - 15 years in contract administration with over 10yrs in Managerial positions covering africa and the middleeast. 2. Contract Practice - 15 years experience with over 10yrs in Managerial and expert positions covering africa, north america and the middleeast. 3. All pre-contract procedures, Tendering, Quantification, measurements and Estimating questions - 20 years experience. 4. Contracts and construction law questions and dispute resolutions problems - 15 years experience with over 10yrs in Managerial and expert positions and 5 years expert witness and active practice in arbitration proceedings covering africa and the middleeast.

Organizations
1. FAIQS - Fellow, Australian Institute of Quantity Surveyors, Australia 2. FRICS - Fellow, Royal Institution of Chartered Surveyors, UK 3. CCP - Certified Cost Professional AACEI, USA 4. PQS - CIQS, CANADA 5. ACIArb. - CIArb, UK 6. MNIQS - NIQS, NIGERIA 7. RQS - QSRBN, NIGERIA

Publications
1. AACEI RP on Estimating, 2010

Education/Credentials
1. B.Tech (QS) 2. RICS professional course, CEM - UK 3. MSc , UK NARIC 4. Professional Doctorate ( to commence 2016)

Past/Present Clients
1. Larsen & Toubro Ltd, Dubai UAE 2. Larsen & Toubro (oman) LLC 3. Archi + Web consortium, Abuja Nigeria 4. George Dike & Associates, Minna Nigeria 5. Public works Authority (Ashghal), Doha Qatar

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