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Unit 5 - Coggle Diagram
Unit 5
Claim Management Procedures
Payment Claims
When to Claim?
Limitation Period in Making a Claim
More than 30 months ago are not allowed to claim
Payment Repsonse
When the payment response be served?
The client must serve payment responses on or before the date stated in the contract, subject to a maximum of 21 days from the contractor’s payment claims. (Construction Contracts only)
If the contract does not specify a date, the client must serve the payment response within 14 days from the date of payment claim
When to make payment?
Construction Contracts
Payment should be made by the due date stated in the contract, subject to a maximum of 35 days after the due date for payment response or the date of tax invoice
If the payment due date is not provided in the contract, payment must be made 14 days after the payment response due date or the date of the tax invoice
Supply Contracts
payment should be made by the payment due date stated in the contract, subject to a maximum of 60 days after the payment claim (e.g. invoice) is served.
If the payment is not provided to date, it must be made 30 days after the payment claim is served
Payment Certificate
What is to be certified?
90% of the value of work completed
80% of the value of unfixed material and goods delivered to site.
Retention Monies
10% value of total value of work done
20% value of unfixed goods and material delivered to site
Max. 5% of contract sum (Limit of Retention)
When to issue?
In construction contracts, the contract administrator is required to issue payment certificates within 14 days from the date of payment claims
Final Account Claim and Final Payment
Variation
What is Variation?
Why are Variations Clauses Included in Contracts?
How are Variation Costs Determined?
a) Schedule of Rates (Contract of Rates)
These rate are used for works that are similar in nature and carried out in similar manner. They are listed in SOR.
b) Extrapolation
The SOR rates (or contract rates) will be used for deriving the rates for variation work items that are similar in nature.
c) Fair Market
Obtain three quotes to find the average quote
d) Star Rate
Build up a realistic rate for work item based on the cost of materials, labour, plant and equipment. A factor of Y% (usually 15%) is added as profit and overheads to compensate the service provider.
Instructions and Directions
Instructions: Can result in an increase or
reduction of the contract sum
Directions: There is neither additional payment nor
an increase in the contract sum. It may result in a reduction of the contract sum
Adjudication
What is Adjudication?
Adjudication Process