FIDIC sub clause 14.2 – Advance payment.(explained)

Advance payment is an interest free mobilization loan from the Employer to the Contractor. Advance payment can either be paid in one installment or multiple installments to a Contractor. Where multiple installments are intended, it is mandatory to state it in the Appendix to Tender, and specifying the number of installments, and the time to pay the installment to the Contractor. Also the applicable currencies and proportions in case of multiple currencies must be stated in the Appendix to Tender.

For the Advance payment to be applicable to a contract, one of the following must be established;
1. The Employer must have received a guarantee covering the Advance payment from the Contractor, i.e. an APG (Advance Payment Guarantee) must be provided by the Contractor
2. The total Advance payment sum must be stated in the Appendix to Tender.

The Contractor cannot receive payment for Advance payment if he;
1. does not apply for the payment in accordance with sub –clause 14.3 (in six copies),
2. does not provide a performance security in accordance with sub-clause 4.2,
3. does not provide an APG,
These three criteria are mandatory before the Consultant Engineer can issue a payment certificate to cover the Advance payment.

The Advance payment can be recovered through percentage deductions in payment certificates due to the Contractor, or through other percentage forms as agreed and stated in the Appendix to Tender.

Advance payment recovery can only commence when the addition of all certified interim payments exceeds Ten percent (10%) of the Accepted Contract Amount (initial contract sum) less Provisional sums. The certified interim payments to be added together must be exclusive of the Advance payment, deductions and retention sums.

The rate of recovery or amortisation of Advance payment shall be 25% of each payment certificate sum less retention, deduction and Advance payment sums. The amortisation must be in applicable currencies or proportions (in case of multiple currencies) and continued to be carried out until the advance payment has been fully repaid.

Advance payment recovery or amortization is exclusive of retentions, statutory deductions and the Advance payment; hence they must be adjusted in valuations.

Where the advance payment has not been fully repaid and one of the following occurs;
A. The Employer terminates the contract,
B. The Contractor terminates the contract,
C. Force majeure,
D. Issuance of Taking over certificate,
the whole balance or outstanding advance payment must be paid by the Contractor to the Employer immediately.

It is important to note that the Contractor may gradually reduce the amount of APG as he repays the advance payment to the Employer, but must ensure that the APG is valid and enforceable until full repayment of the advance payment is carried out.

Where the APG has an expiry date, and the whole advance payment has not been fully recovered 28days to the expiration of the APG, the Contractor must extend the validity of the APG. The validity of the APG must always be maintained until the advance payment is fully amortised.

Note: There is no specific percentage or amount to be given to a Contractor as advance payment, but it is good practice not to give more than 40% of the contract sum. In Nigeria the Federal Government through the BPP act allows a maximum of 15% of contract sum as the amount to be given as advance payment on construction contracts.

coinloorke 06172012:2353

~ FIDIC form of contract for building and engineering works designed by the Employer.

Estimating common wire nails for building projects.(approx.)

There are Four (4) basic steps in calculating the quantity of common wire nails be procured for works.

1. Determine the nail points
2. Determine the size (length and diameter) of nails
3. Determine the weights of nails
4. Adjustments

Step 1
The estimator is expected to relatively know the joint sections that require nailing and the number of nails for each joint section, hence the number of nails can be determined.

Step2
The required nail size (length and diameter) for the nail points identified should be determined by the estimator in conjunction with the Carpenter. Where the carpenter is not available the estimator can guide himself/herself by ensuring that the nail is driven 3/4deep into the base member, i.e length of nail = (thickness of other members + 3/4 of base member thickness).

Step 3
Use the formula below to determine the approximate weight of nails for the different nail sizes.
Wn = (22/7)*(nail diameter/2)^2*length of nail*7850
The answer obtained is in kilogram (kg).

Step 4
A. Multiply the total number of nails by the their respective weights to obtain the total kilogram of nails
B. Apply the required factors for reuse and wastage (application, residual, theft etc) to obtain the actual quantity of nails to be purchased.

Note: It is good practice to carry out Steps 1 and 2 at the same time (simultaneously) in order to ease computations and to avoid omissions, especially in large and complex jobs.

Reference: www.conloorke.com

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Measurement of driven shell piles.(explained)

Driven shell piles are measured under work section D30:2 of SMM 7 and BESMM 2 or 3

Definition rule
Driven shell piles are piles in which casings are driven to depths, filled with concrete and the casings finally withdrawn. The design loads are expected to be carried by the concrete section and not the casing. 
It is wrong and unacceptable to measure these piles under work section D30:20.1(filling hollow piles)

Unit of measurement, and Work section code. 
There are three (3) major measurement items for every type/kind of driven shell pile to be measured, apart from other ancillary items. 
1. Total number, stating the commencing surface (nr) - D30:2.1.1.(1-4)
2. Total concreted length (m) - D30:2.1.2.(1-4)
3. Total driven length, stating the maximum length (m) - D30:2.1.3.(1-4)
It is mandatory to measure all these three items. 

Description in the BOQ 
For each of the measured items the following are expected to be given in the descriptions 
1. Nominal diameter of the piles
2. Kind and quality of materials 
3. Mix ratio details 
4. Kind of pile (preliminary piles, contiguous piles, raking piles etc)
For a more detailed and professional BOQ, further information such as tests, grout type, compacting details and the likes may be added to the description.

Measurement rule
The driven lengths must be measured along the axes of the piles from the commencing surface to the bottom of the casings. 

Coverage rule
Excess concrete within the total concreted length is deemed to be included in the measurement, and should not be measured again. The estimator is expected to take this into account during rate build-up. 

~ coinloorke 06122012.
www.coinloorke.com

Contractor's claims - FIDIC form of contract

FIDIC sub-clause 20.1 - Contractor's claims.(summarised)

The points below gives an overview of how Contractor's claims are addressed under the FIDIC form of contract for building and engineering works designed by the Employer.

1. The contractor must must give notice(s) within 28 days of the event or circumstance that could lead to an extension of time or need for additional payment, else he shall not be entitled to such claims. This notice shall describe the event or circumstance leading to the claims

2. Within 42 days, or agreed periods, of the event or circumstance leading to the claims, the contractor shall send to the engineer a fully detailed claim(extension of time and additional payment being claimed with supporting particulars)

3. The contractor shall keep contemporary records and relevant supporting particulars for the claims and shall permit the engineer to inspect records necessary to substantiate claims

4. The contractor shall also submit any other notices which are required by the contract, and supporting particulars for the claims. 

5. If the effect of the claim is continuous, then clauses 20.1(a-c) shall be applied.

6. The engineer shall approve or disapprove of the contractors claims within 42 days, after a which he will proceed; if claim is approved; to determine the required extension of time and additional payment in line with sub-clauses 3.5 and 8.4of the contract.

Note: Not all approved claims will lead to extension of time and/or additional payment.

Content of an interim certificate

In most contracts, valuations are carried out to ascertain the value of work that has been carried out by the contractor. This valuation is presented to the Client or Employer in form of a certificate, either interim or final. The Client or Employer is expected to honour the certificate within a specified period of time as agreed in the contract (usually reinforced in the "Appendix" sections). Below are some of the important cost items that must be captured by any Quantity surveyor in his valuation and to be included in the interim certificate.

• Total value of work properly executed
• Total value of materials and goods which are
1. approved for the work
2. delivered to the site for the works
3. adjacent to the site and meant for the work
4. stored in approved locations offsite. (approval by employer, project manager or lead consultant)
5. reasonably, properly and not prematurely brought to site or other locations
6. well protected from weather, damages and other casualities
• Retention amount
• Previously paid installments.
• Amount due to the contractor

The above bullets generally captures the overall picture of the interim certificate, although the bullets looks simple at a glance, it is a bit complex when it is applied in practice. It takes a lot of care and diligence on the part of the Quantity Surveyor in breaking down these items in other to capture relevant cost information on the project. Such breakdown will include advance payments, provisional sums and quantities, payments to nominated subcontractors, items of retention, variations and fluctuations.

Likewise the Quantity Surveyor must show a good level of  intelligence in other to identify materials that are brought to site prematurely and must be able to detect sharp practices of contractors.

The interim certificate is not a firm document, as errors that are made in it can be treated and adjusted accordingly in the next certificate, nonetheless, the type, amount and frequency of errors in the interim certificate will surely question the INTEGRITY of the professionals preparing and presenting them.