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Progress Billing

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Progress Billing

Post by Philip A. on Wed Jun 27, 2018 4:46 pm

What is the maximum percentage of accomplishment that can be paid to the contractor prior to final billing?

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Re: Progress Billing

Post by Mark Lopez on Thu Jul 05, 2018 11:47 am

Philip A. wrote:What is the maximum percentage of accomplishment that can be paid to the contractor prior to final billing?


You may refer to ANNEX “E” CONTRACT IMPLEMENTATION GUIDELINES FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS

5. PROGRESS PAYMENT
5.1. Once a month, the contractor may submit a statement of work accomplished (SWA) or progress billing and corresponding request for progress payment for work accomplished. The SWA should show the amounts which the contractor considers itself to be entitled to up to the end of the month, to cover (a) the cumulative value of the works it executed to date, based on the items in the Bill of Quantities, and (b) adjustments made for approved variation orders executed.

5.2. The procuring entity’s representative/project engineer shall check the contractor’s monthly SWA and certify the amount to be paid to the contractor as progress payment. Except as otherwise stipulated in the Instruction to Bidders, materials and equipment delivered on the site but not completely put in place shall not be included for payment.

5.3. The procuring entity shall deduct the following from the certified gross amounts to be paid to the contractor as progress payment:
a) Cumulative value of the work previously certified and paid for.
b) Portion of the advance payment to be recouped for the month.
c) Retention money in accordance with the condition of contract.
d) Amount to cover third party liabilities.
e) Amount to cover uncorrected discovered defects in the works.
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Re: Progress Billing

Post by engrjhez® on Mon Jul 09, 2018 8:05 pm

Philip A. wrote:What is the maximum percentage of accomplishment that can be paid to the contractor prior to final billing?

The answer to the question is technically the highest possible percentage without reaching 100% (say 99.99999999999999999999999999999999999999%)

However, you may want to check Item 7 of Annex E of the 2016 Revised IRR:

Once the project reaches an accomplishment of ninety five (95%) of the total contract amount, the procuring entity may create an inspectorate team to make preliminary inspection and submit a punch-list to the contractor in preparation for the final turnover of the project. Said punch-list will contain, among others, the remaining works, work deficiencies for necessary corrections, and the specific duration/time to fully complete the project considering the approved remaining contract time. This, however, shall not preclude the procuring entity's claim for liquidated damages.

This is not mandatory. But the procuring entity may choose to limit the billing up to 90-95% to provide a legroom for possible correction of deficiencies and variation orders. Yet, if the contractor would like to be paid only after 100% accomplishment, the first billing could also be their last. Smile
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