Construction Law/Application Date of Mob Advance
QUESTION: Dear Sir! We are working at a canal project in Tank with WAPDA PK. Contract is based on FIDIC 4th 1987. According to Clause 60.11, An interest free mobilization advance upto 10% of the Contract Price shall be paid by the Employer to the Contractor in 2 equal installments upon submission of Mobilization Advance Bank Guarantee for full amount.(1) First part within 21 days after signing of contract or date of receipt of Notice to Commence whichever is earlier. (2) Second part within 42 days from the date of payment of 1st part.......
Issue is that the Contractor could not get Bank Guarantee within 21 after signing of the Contract. Say, he submitted the application for Mob Advce + Bank Guarantee after 3 months of signing of the Contract. The Employer says Mob Advce Application is Time Bared as it was to be submitted in 21 days after signing of the Contract. Kindly guide us how to proceed.
ANSWER: Dear ISHAQ, Hope you will be fine.
For its detail answer,following info will be required:
Date of Commencement
Time for Completion of the Contract
Progress of Work after 3 month
In General practice, Mob Advance is not time barred, as there is nothing mentioned in the Contract, but for practical purpose,The Contractor may claim it during its mobilization period specified in his programme of Work(Baseline schedule).
The Contractor may prove that he has started the mobilization with his available financial sources after commencement date as per programme of Work but unluckily these were not enough to fully mobilize all resources and still he needed a substantial amount for equipment mobilization/ construction of Camp ,warehouse etc.;that is why he is requesting for Mob Advance.It may be an attempt but if the Contractor has fully mobilized and started the Work,then Employer stance may valid as the Contractor did not claim Mob advance and now the stage of Mob Advance has gone.Hope it will help you.
Engr Arshad Mahmood
---------- FOLLOW-UP ----------
QUESTION: Dear sir! Agreement was signed on 25 Mar. The commencement date started on 5 April. The contractor could not mobilized at site due to bad law and order situation, nor applied for Mob Advce till 9 June. He requested Mob advce on 9 June which was rejected on the plea that it was to be requested within 21 days of signing of contract.
Another developement is that the contractor applied for change of commencement date which has been accepted in Dec. New commencement date is now fixed by the Employer as 9 june. The project duration is 1 yr. (9 june 2015 to 8 june 2016).
The contractor is continously asking Mob Advce from June but being rejected again and again. My question is still same REQUEST OF MOB ADVANCE IS TIME BARRED if the contractor failed to apply within 21 days of siging of contract, due to any reason.
Although the Contractor should apply for Mob. Advance within the specified time-frame but it will be not fair to refuse the same. There is no such provision of its time bar as I have already said,particularly in the prevailing circumstances as the Contractor could not mobilize due to bad law and order situation.Admitting this fact the Employer has revised the commencement date.the Employer should consider the request of the Contractor that he need money to mobilize, for which such provision has been made in the Contract.
But, it is also a fact that the Contractor seems to be financial unsound that is why he could not manage the guarantee for Mob. Advance within three months from the date of signing of the Contract whereas the Contract duration is only one year. Now you may pursue the Employer.
Engr Arshad Mahmood