Civil Engineering Project Management (4th Edition)
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200 <strong>Civil</strong> <strong>Engineering</strong> <strong>Project</strong> <strong>Management</strong><br />
or if not, payment will be dependent on whether they are fixed or time-related.<br />
Fixed sums would be paid as mentioned above for ordinary lump sums, but<br />
problems can arise if the item description is imprecise. Thus if the contractor<br />
has added some method-related item for ‘scaffolding’ or ‘site transport’ as a<br />
fixed sum, it has to be further defined to relate to some specific scaffolding or<br />
specific transport; otherwise it is too vague to identify and cannot be paid until<br />
substantial completion.<br />
When method-related sums are time-related they are paid in monthly<br />
instalments, but the proportion paid will depend on when completion of the<br />
relevant task will be reached. Thus if an item is completed when substantial<br />
completion is achieved, and the programmed time for this is 18 months then,<br />
1/18th payment is added at the end of each month. But if it then appears that<br />
substantial completion will not be reached until month 20, the total payment<br />
due at month 7 is 7/20ths. This is irrespective of whether the delay in completion<br />
is due to the contractor’s tardiness or to an authorized extension of the<br />
contract period. The reason for this approach is that method-related items<br />
are defined as covering ‘costs not to be considered as proportional to the<br />
quantities of the other items’. If an extension of the contract period has been<br />
granted, then any claim for extra payment on that account is a separate matter<br />
to be decided by the terms of the contract. The lump sum payable under a<br />
method-related item remains unaltered.<br />
An adjustment item in the form of a lump sum (see Section 15.11) is paid<br />
in the same proportion as the total payment due under other items less retention,<br />
bears to the total contract sum, less the adjustment item. If a percentage<br />
adjustment has been quoted, this is applied to the total amount payable under<br />
bill items and variations. In both cases the retention money is deducted after<br />
adding in the adjustment item.<br />
16.5 Payment for materials on site<br />
The ICE conditions and similar permit payment to be made to cover part<br />
of the cost to the contractor of materials delivered to site but not yet built into<br />
the works. This can ease the contractor’s cash flow situation and is of advantage<br />
to the employer in encouraging early supply of materials so that unexpected<br />
shortages or late deliveries are less likely to hold up progress. In contracts that<br />
contain such a provision, tenderers can be expected to reduce their prices in<br />
anticipation of the expected financial benefit.<br />
Certifying payment for materials on site is left to the discretion of the engineer.<br />
Under ICE conditions Clause 60(2)(b) he has to certify such amounts (if<br />
any) as he may consider proper, not exceeding a percentage of the value as<br />
stated in the contract. In this he may need to act carefully because, even though<br />
material has been delivered to site, it might still remain the property of the<br />
supplier until he has been paid for it by the contractor. If the supplier falls