16 FINANCIAL STEPS AFTER TAKING OVER
After Taking Over there are three main steps the parties will need to take to
conclude the financial aspects of their contract. These are:
●
the Contractor ’ s Statement at Completion (clause 14.10)
●
the Final Payment Application process and Discharge (14.11–14.12)
●
the Final Payment (14.13)
Contractor ’ s Statement at Completion
Within 84 days after receiving the Taking Over Certificate for the works,
the Contractor must submit to the Engineer or Employer a Statement at
Completion with supporting documents. These should show, in detail:
●
the value of all work done in accordance with the contract up to the date of
completion stated in the Certificate;
●
any further sums which the Contractor considers due;
●
an estimate of other amounts which the Contractor considers will become
due to him under the contract, with the estimated amounts shown separately.
In the Silver Book, the Employer is to notify the Contractor within 28 days
of any items in the Statement with which he disagrees, with supporting details,
and make payment within 56 days after receiving the Statement and support-
ing documents (in accordance with clause 14.7).
In the Yellow Book, following a similar timetable, the Contractor is entitled
to a certificate from the Engineer within 28 days and payment within 56 days
of the Statement and documents.
Final payment application process
Within 56 days after receiving the Performance Certificate, the Contractor
must submit a draft final statement with supporting documents showing:
●
the value of all work done in accordance with the contract;
●
any further sums which the Contractor considers to be due to him under
the contract or otherwise.
If the Engineer or Employer disagrees with or cannot verify any part of the
draft final statement then the Contractor is to submit such further informa-
tion as may reasonably be required, and shall make such changes in the draft
as may be agreed. The Contractor then prepares and submits the final state-
ment as agreed.
If there remains any disagreement following discussion then the Contractor
is entitled to a certificate or payment in respect of the agreed items. The dis-
pute as to the balance may be referred to a Dispute Adjudication Board.
The aim therefore is to arrive at an agreed final statement, with the matters
which cannot be agreed hived off to the decision of a DAB.
Discharge
When submitting the final statement the Contractor is to submit a written
discharge stating that the total of the final statement represents full and final
settlement of all moneys due to the Contractor under or in connection with
the contract. The discharge may state (and it would probably be wise for the
Contractor to make sure that it does) that the discharge takes effect only when
the Contractor has received the performance security and payment of the out-
standing balance of the total stated.
Final payment
In the Yellow Book, within 28 days after receipt of the Contractor ’ s final
statement and written discharge, the Engineer is to issue the final payment
certificate stating the amount that is finally due to the Contractor. This is after
giving credit for all amounts previously paid and for all sums to which the
Contractor is entitled under the contract and the balance(if any) due from the
Employer to the Contractor or vice versa. The Employer must then make
the final payment to the Contractor within 56 days after the date of his receipt
of the Engineer ’ s final payment certificate.
In the Silver Book the final payment is to be made within 42 days of receipt
of the final statement and written discharge.