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BUSINESS AND TRAINING
• Monitor and submit all “ justified ” ‘ adjustments of the contract value ’ as claims within the period stated in the SfC used .
• Monitor ( unauthorised ) deduction of penalties / damages that should be ‘ highlighted ’ in the recovery statement and consolidated in the payment certificate .
Possible disputes Late , partial or non-payment :
• Issue a ( polite ) Notice immediately on expiry of the period for payment in the SfC that no payment has been received by the due date - please advise when payment may be expected .
• If , by expiry of this Notice no payment has been received , issue a stern Notice ( and copy the principal agent ) that you will suspend your works on expiry of this Notice if payment in full is not received , and issue a demand on the guarantor of a Payment Guarantee .
• Suspension is quite powerful … but not always successful !
Note : Suspension lasts until payment is received . When the Works is resumed the Principal Agent must compile a Status Report to record the state of completion of the Works at the date of suspension , any damage , construction equipment and / or materials on site , etc ., to determine the Preliminaries costs incurred during suspension . In the extreme case termination may be a desirable option .
Monitor actions / events outside your control :
• When working in existing structures and / or in excavations .
• Strikes by your staff , or staff of other contractors , exceptional weather conditions .
• Changes in law to be complied with .
• Submit a claim for the Revision of the date for Practical ( interim ) Completion resulting from damages and / or delay due to ‘ others ’ including the contractor , Subcontractors or Direct Contractors .
• Consider exercising a lien over your works by withholding the issue of the Certificate of Compliance until outstanding issues are resolved .
Documentation Where the JBCC Nominated / Selected Subcontract Agreement ( NSSA ) is used :
• The Principal Agent issues a Recovery Statement and a Payment Certificate for transactions between the Employer and the Contractor .
• The Principal Agent must simultaneously issue a Payment Notification to every ‘ nominated / selected subcontractor ’ reflecting the amount included in the amount certified for payment to the Contractor .
• The Contractor must issue to every ‘ nominated / selected subcontractor ’ a Subcontract Recovery Statement and a Payment Advice for transactions between the Contractor and the Subcontractor .
• The amount shown in the Payment Notification and the Payment Advice should match – but there may be transactions between the Contractor and the Subcontractor that the Principal Agent would have no knowledge of or interest in – including ‘ contracharges ,’ retention , damages , etc .
• This system was introduced some years ago for transparency to keep Subcontractors informed of certified payments to the Contractor – and when payments are due to them .
• The NSSA refers to ‘ Interim Completion ’ by the Subcontractor before Practical Completion for the whole works .
• In the relationship between the Employer and the Contractor the Employer may recover the penalty amount per calendar day from the Contractor if the ( revised ) Date for Practical completion is not achieved . In the relationship between the Contractor and the Subcontractor the Contractor may recover ( proven ) damages from subcontractors responsible for not achieving the ( revised ) Date for Practical Completion . This amount must be calculated for each “ guilty ” Subcontractor . It is common but not necessarily fair to share the penalty amount among subcontractors – without the Contractor paying his share !
www . plumbingafrica . co . za @ plumbingonline @ plumbingonline @ PlumbingAfricaOnline May 2022 Volume 28 I Number 3