Interim Payment Certificates under FIDIC in the UAE

Payment on a FIDIC contract in the United Arab Emirates runs on the Interim Payment Certificate. The contractor does not send an invoice and wait for it to be paid. Each month a Statement goes to the Engineer, the Engineer certifies what is fairly due, and the Employer pays against that certificate. Getting the Statement right is what turns work done into cash received.

What the monthly Statement contains

Under Sub-Clause 14.3 of the Red Book, the Statement sets out the amounts the contractor considers due at the valuation date. In practice that means the value of the permanent work executed, the measured variations instructed under Clause 13, any plant and materials to be paid for, and the additions and deductions the contract requires.

• Value of work done. Measured against the bill of quantities or the activity schedule, to the valuation date and no further.
• Variations. Only instructed variations, valued under the Clause 13 rules, belong in the interim figure. An unpriced claim is not a certified sum.
• Retention. Deducted at the percentage in the Appendix to Tender, up to the stated limit.
• Advance payment. The repayment instalment recovered under Sub-Clause 14.2, taken off the gross.
• Amounts previously certified. The Statement is cumulative, so the last step is to subtract everything already certified and arrive at the sum for this certificate.

The Engineer's certificate

Within twenty-eight days of receiving the Statement, the Engineer issues the Interim Payment Certificate under Sub-Clause 14.6, stating the amount the Engineer fairly determines to be due. The Engineer can correct or modify any previous certificate, so an interim valuation is never final. It is a running account, revised each month against the measured position.

There is also a floor. The Engineer is not bound to issue a certificate for less than the minimum amount stated in the Appendix to Tender, which is why very early or very late valuations, where the monthly movement is small, sometimes wait a cycle.

Where margin is won or lost

A Statement that understates the measured work leaves money on site that has to be chased next month, or in the final account a year later. One that overstates it invites the Engineer to cut the certificate and sets up a dispute the contractor will usually lose, because the measured record does not support the number. The discipline is to certify to the measurement, every month, and to keep the record that proves it.