Payment For Preliminaries Items

[Meridith]

Dear Jonathan,

Wishing you a nice weekend and I have a question as follows:

Normally, in BOQ we have Bill No1 for preliminaries works indicated cost for all preliminary items such as site office, site hoarding, water, electric, cleaning rubbish, etc. Based on our standard, we often pay for these items throughout the contract period and adjust when delay happen. Based on the above method, we have paid to the contractor up to 65% of this Bill, however, the workdone value of the contractor only achieve 30%.

The Employer now request us(as a project consultant)  to adjust payment of this bill according to value of workdone 30%

Please advise if Employer request is reasonable?

In your opinion, what should we paid?

Please note that we use Fidic 99 redbook for this contract and the contract not clearly mentioned payment method for this Bill. It only mentioned “If in the opinion of the Engineer, after reference to the programme and the actual progress of the Works, delay has occurred in the progress of the Works, the Engineer may adjust the cash flow of and any payments included for Preliminaries in Interim Payment Certificates to reflect the revised anticipated duration”

Many thanks

David

[Boase]

Hi David,

The Preliminaries is intended for the whole of the Works.

There are items under Preliminaries that are time-based, fixed or based on progress.

For example, Access to Site can be measured pro-rata to the actual progress of the Works. While Rental of Site Office, Utilities etc. can be measured and paid on a monthly basis. It is obvious that payment for rental of site office does not relate to the Contractor’s actual progress; regardless of the progress of the Contractor you need to pay monthly thus need to get paid by the Client in a monthly basis.

If there is over payment of the Prelims while progress is still on-going there must be a delay(either by the Client or Contractor) but not all the time.

Hope the above helps and Good Luck!

Regards,

Jonathan L. Peralta