Objectives of Presentation

• FIDIC and PCC Payment Process Flows

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• FIDIC and PCC Change Control Process Flows

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• Roles of Parties:
• MCA (Employer)
• Contractor
• Engineer
• PMU/PMC
• FA
• PA
• MCC
• MCA Board
• DAB

FIDIC PROCESS FLOWS

• 1. Performance Security�(Ref: CC 4.2, 8.1)
• 2. Advance Payment Request�(Ref CC 14.2, 14.3, 14.6, 14.7)
• 3. Interim Payment Certificates (IPC)�(Ref CC 14.3, 14.6, 14.7)
• 4. Treatment of Errors on IPCs�(Ref CC14.6)
• 5. Take Over and Payment at Completion�(Ref CC 10.1, 14.6, 14.7, 14.9, 14.10)
• 6. Final Acceptance and Final Payment�(Ref CC 4.2,11.1, 11.9, 14.9,14.11, 14.13, 14.7)
• 7. Variation Orders (V.O.)�(Ref CC13.1, 13.2, 13.3)
• 8. Claims �(Ref CC 20.1, 20.4)

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Glossary

• FIDIC : Fédération Internationale des Ingénieurs Conseils
• PCC : Particular Conditions of Contract
• Contractor
• Engineer
• PMU : Project Management Unit
• PMC : Project Management Consultant
• FA : Fiscal Agent
• PA : Procurement Agent
• DP/ PD : Director of Project
• CEO/DCEO: Chief Executive Officer/Deputy
• CFO: Chief Financial Officer
• DAB: Dispute and Arbitration Board

​

​

• PS : Performance Security
• APG : Advance Payment Guarantee
• IPC : Interim Payment Certificate
• S : Statement
• AL : Acceptance Letter
• VO : Variation Order
• VOP : Variation Order Proposal
• VOR :Variation Order Request
• TR : Technical Review
• AN : Acceptance Note
• RM : Retention Money
• BG : Bank Guarantee
• SAC : Statement at Completion
• DNP : Defects Notification Period
• FS : Final Statement

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1. Performance Security�(Ref: CC 4.2, 8.1)

Contractor

PMU/PMC

Engineer

MCA

FA

Start works

E

7

S

Issuance of Acceptance Letter

Acceptance Letter

Issuance of Performance Security

Perf.

Security

28

42 days

28 days

7 days

7 days

Issue commence-ment notice

Commen-cement Notice

CFO: quality & validity of PS OK?

No

Perf.

Security

Safekeeping

Yes

Contract signature

Yes

2. Advance Payment Request�(Ref CC 14.2, 14.3, 14.6, 14.7)

Contractor

PMU/PMC

S

28 days

Engineer

MCA

FA

Produce:

Statement (S)

DP: Approve IPC

CFO: Control

Conformity between APG and IPC

Payment

E

S

Issue: IPC

S + IPC

S + IPC

2

12

7

14 days

7 days

56 days (minus 7 days CPS cut-off)

Issue Advance Payment Guarantee (APG)

APG

CFO: quality & validity of APG OK?

No

APG

Yes

Safekeeping

Yes

3. Interim Payment Certificates (IPC)�(Ref CC 14.3, 14.6, 14.7)

Contractor

PMU/PMC

S

28 days

Engineer

MCA

FA

Issue Statements in 6 ex

• DP & DCEO: Approve Final AN
• CEO: Approves S

CFO: Control

• Retention Money (RM)
• Advance repayment
• Claims
• Liquidated damages
• Corrections of prev IPCs
• Budget verification, etc…

2^nd control & Payment

E

S

Issue: IPC

IPC + S + AN

IPC + S + AN

4

28

7

7 days

IPC + S

Issue: Acceptance Note (AN)

7

7 days

3

7 days

56 days (minus 7 days CPS cut-off)

4. Treatment of Errors on IPCs�(Ref CC14.6)

Contractor

PMU/PMC

Engineer

MCA

FA

Discover error in IPC

Discover error in IPC

Discover error in IPC

Inform MCA CFO about the error

Request for correction

Inform MCA DP about the error

CEO: Issue Request for correction

Apply correction on subsequent IPC

7 days

7 days

14 days

Discover error in IPC

5. Take Over and Payment at Completion�(Ref CC 10.1, 14.6, 14.7, 14.9, 14.10)

Contractor

PMU/PMC

Engineer

MCA

FA

DP/CFO/CEO: Approve

Issue:

• Take over certificate
• IPC for release of 50% of RM (or 100% if contractor provides BG for remaining 50% of RM) or amount of PS exceeds 50% of RM

IPC for release RM

Take over cert.

Issue: Statement at completion (SAC)

SAC

Issue: IPC

• PD & DCEO: Approve AN
• CEO: Approves S

CFO: Control

• Advance repayment
• Claims
• Liquidated damages
• Corrections of prev IPCs
• Etc…

2^nd control & Payment

IPC + SAC + AN

4

28

7

IPC + SAC

Issue: Acceptance Note (AN)

7

3

IPC + SAC + AN

Payment

IPC for release RM

84

84 days

56 days (minus 7 days CPS cut-off)

Joint inspection

S

E

6. Final Acceptance and Final Payment�(Ref CC 4.2,11.1, 11.9, 14.9,14.11, 14.13, 14.7)

Contractor

PMU/PMC

Engineer

MCA

FA

Review Draft Final Statement

Issue Draft Final statement

FS + D

Issue Final statement and Discharge

(FS + D)

After DNP:

Rectification of defects

Issue: Performance Certificate

Perf. certificate

Joint inspection after rectification of defects

56

S

C.

After DNP Release RMG

RMG

PS

Release PS

21

�6. Final Acceptance and Final Payment (continued)�(Ref CC 11.1, 11.9, 14.11, 14.13, 14.7)

Contractor

PMU/PMC

28 days

Engineer

MCA

FA

2^nd control

& Payment

E

FPC + FS + D+ AN

4

14

14 days

FPC + FS + D

Issue: Acceptance Note (AN)

14

16 days

4

19 days

Issue: Final Payment Certificate (FPC)

• PD & DCEO: Approve AN
• CEO: Approve S

CFO: Control

• Claims
• Additional works

FPC + FS + D+ AN

If errors

If errors

Request correction of FPC

C.

56 days (minus 7 days CPS cut-off)

28

FS + D

7. Variation Orders (V.O.)�(Ref CC13.1, 13.2, 13.3)

Contractor

PMU/PMC

Engineer

MCA

DPM / PA

S

E

Issue VO proposal (VOP)

VOP

Cumul VO s > 10%?

No

Yes

MCC & MCA Board

Prepare VO Request

(VOR)

• VOP
• VOR

Issue Technical Review (TR)

• VOP
• VOR
• TR

PD & DCEO/CEO:

Approve

CFO:

Clear budget

Approve

• VOP
• VOR
• TR

Request VO Proposal

Sign VO

VO

Issue VO

8. Claims �(Ref CC 20.1, 20.4)

Contractor

PMU/PMC

Engineer

MCA

Issue Detailed claim (interim)

PD: Technical Review

Interim detailed claim

Technical Review of claim

• Claim
• Engineer’s TR
• PMU/PMC’s TR

5

42

• Claim
• Engineer’s TR

Technical Review

5

5

Event

Issue Final claim

Final claim

CFO:

Information on budget availability

CEO/DCEO: Final approval

Cumul amendments > 10%?

MCC & MCA Board

Approval or rejection

• Claim
• Engineer’s TR
• PMU/PMC’s TR

PD: Notification of approval or rejection

Notification of approval or rejection

End of resulting effects

28

20

2

3

Refer to the DAB if rejection

Issue Notice of claim

Notice of claim

28

If budget not available

MCA

to find solution (other projects, govt)