Clause 14.10 Statement at Completion

In the labyrinth of FIDIC Yellow Book 1999, Clause 14.10, the “Statement at Completion,” serves as a pivotal milestone for contractors. This clause mandates that within a timeframe of 84 days post the acquisition of the Taking-Over Certificate for the Works, the Contractor is obligated to furnish the Engineer with six copies of a comprehensive Statement at Completion along with supporting documents. This procedure aligns with the provisions set forth in Sub-Clause 14.3 [Application for Interim Payment Certificates].

When a building job is all done, the builder has to give a report to the person who asked for the job. This has to be done within 84 days after the job is officially marked as finished. This report should include:

After the builder gives this report, the person who asked for the job will then check and approve it. This is done according to a rule called “Sub-Clause 14.6”, which is about the “Issue of Interim Payment Certificates”.

In simple words, this rule makes sure that all the work and money involved in the project is recorded and any money that still needs to be paid is noted when the project is finished. It helps keep things clear and organized.

Think of it like this: Imagine you’re having a party and you hire a caterer. Once the party is over, the caterer gives you a bill. The bill includes the cost of food, any extra services they provided, and any other costs they think will come up later (maybe they rented some equipment and haven’t received the final bill yet). You check the bill and then pay them accordingly. This is similar to what’s happening here, but in a construction project context.

Purpose

Clause 14.10 in the FIDIC Yellow Book 1999 outlines the procedure for the Contractor to submit a comprehensive financial statement, known as the “Statement at Completion,” after receiving the Taking-Over Certificate for the Works. This statement is crucial for the financial reconciliation of the project at the point of completion.

Key Components

1. Submission Timeline: The Contractor must submit the Statement at Completion within 84 days of receiving the Taking-Over Certificate.
2. Content Requirements: The statement should include:
   • The value of all work done under the contract up to the date in the Taking-Over Certificate.
   • Any additional sums the Contractor considers due.
   • An estimate of any other amounts the Contractor anticipates will become due under the contract. These estimates must be shown separately.
3. Supporting Documents: The statement must be accompanied by supporting documents as per Sub-Clause 14.3.
4. Engineer’s Certification: Following the submission, the Engineer certifies the statement in accordance with Sub-Clause 14.6.

Implications

• Financial Clarity: This clause ensures that all financial aspects of the project are clearly documented and accounted for at the completion stage.
• Basis for Final Settlement: The Statement at Completion forms the basis for any final financial settlements, including the final payment.
• Dispute Minimization: By requiring detailed documentation, this clause helps in minimizing disputes related to financial claims at the project’s completion.

Interaction with Other Clauses

• Sub-Clause 14.3 [Application for Interim Payment Certificates]: The format and requirements for the Statement at Completion are aligned with those for interim payment applications.
• Sub-Clause 14.6 [Issue of Interim Payment Certificates]: The Engineer’s certification of the Statement at Completion is governed by the same principles as the issuance of interim payment certificates.

Practical Considerations

• Timely Submission: The Contractor must be vigilant about the 84-day submission deadline.
• Detailed Record-Keeping: Maintaining comprehensive records of all work and claims is essential for preparing an accurate Statement at Completion.
• Clear Segregation of Estimates: Any estimated future claims must be clearly separated from the actual work done and sums due.

Interaction of Clause 14.10 Statement at Completion with Other Clauses

Interaction with Sub-Clause 14.3 [Application for Interim Payment Certificates]

• Shared Effect: The Statement at Completion, as per Clause 14.10, follows the format and principles outlined in Sub-Clause 14.3 for interim payment applications. This ensures consistency in financial reporting throughout the project.
• Varied Phrasing: “Consistent Financial Reporting Framework” or “Harmonizing Completion Statement with Interim Payment Protocols.”

Interaction with Sub-Clause 14.6 [Issue of Interim Payment Certificates]

• Shared Effect: The Engineer’s role in certifying the Statement at Completion mirrors the process in Sub-Clause 14.6 for interim payments, ensuring a standardized approach to financial certification.
• Varied Phrasing: “Standardizing Certification Processes” or “Aligning Completion Certification with Interim Payment Approvals.”

Interaction with Clause 14.11 [Application for Final Payment Certificate]

• Shared Effect: The Statement at Completion sets the stage for the final payment process outlined in Clause 14.11. It provides a detailed account of all work and claims up to the completion stage, which is crucial for the final settlement.
• Varied Phrasing: “Laying the Groundwork for Final Payment” or “Bridging Completion Reporting with Final Settlement.”

Interaction with Clause 14.12 [Discharge]

• Shared Effect: The financial details in the Statement at Completion contribute to the discharge process in Clause 14.12, where the Contractor confirms the settlement of all dues.
• Varied Phrasing: “Feeding into Full and Final Settlement” or “Integrating Completion Financials with Discharge Process.”

Interaction with Clause 14.13 [Issue of Final Payment Certificate]

• Shared Effect: The Statement at Completion indirectly influences the Final Payment Certificate issued under Clause 14.13, as it documents the financial status at project completion, which is a precursor to the final settlement.
• Varied Phrasing: “Precursor to Final Payment Certification” or “Completion Statement as Basis for Final Payment Assessment.”

Interaction with Clause 4.2 [Performance Security]

• Shared Effect: The Statement at Completion, while primarily financial, may be influenced by the status of the Performance Security under Clause 4.2. The release or retention of Performance Security can impact the final financial settlements documented in the Statement at Completion.
• Varied Phrasing: “Influence of Security Status on Completion Financials” or “Interplay Between Performance Security and Completion Settlements.”

Interaction with Clause 3.5 [Determinations by the Engineer]

• Shared Effect: The Engineer’s determinations under Clause 3.5 can significantly impact the contents of the Statement at Completion. Decisions made by the Engineer regarding variations, extensions of time, or cost adjustments are likely to be reflected in the financials of the Statement at Completion.
• Varied Phrasing: “Engineer’s Determinations Shaping Completion Statement” or “Incorporating Engineer’s Decisions in Completion Financials.”

Interaction with Clause 20 [Claims, Disputes, and Arbitration]

• Shared Effect: Any claims or disputes arising during the project, addressed under Clause 20, could directly affect the Statement at Completion. The resolution of these disputes or claims may lead to adjustments in the final financial statement.
• Varied Phrasing: “Impact of Dispute Resolutions on Completion Statement” or “Reflection of Arbitrated Claims in Completion Financials.”

Interaction with Clause 8.7 [Delay Damages]

• Shared Effect: If delay damages are applicable due to the Contractor’s failure to complete the works within the time frame specified in the contract, these damages would be reflected in the Statement at Completion. Delay damages, as determined under Clause 8.7, would typically be deducted from the amounts due to the Contractor.
• Varied Phrasing: “Incorporation of Delay Damages in Completion Financials” or “Adjustment of Completion Statement for Delay Penalties.”

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Explanation of the Interactions

1. With Sub-Clause 14.3: Clause 14.10 ensures that the financial reporting at the project completion stage is in line with the established procedures for interim payments, maintaining consistency and clarity in financial documentation.
2. With Sub-Clause 14.6: The certification process for the Statement at Completion aligns with the principles used for interim payment certificates, ensuring a standardized approach to financial validation by the Engineer.
3. With Clause 14.11: The detailed financial report provided in the Statement at Completion is essential for the final payment process, as it lays out all financial claims up to the project’s completion, serving as a foundation for the final settlement.
4. With Clause 14.12: The Statement at Completion feeds into the discharge process, where the Contractor confirms that all financial dues are settled, ensuring a comprehensive and final financial closure.
5. With Clause 14.13: The financial details documented in the Statement at Completion are critical for the issuance of the Final Payment Certificate, as they provide a clear picture of the financial status at the completion stage, which is necessary for the final financial settlement.
6. With Clause 4.2: The status of Performance Security, whether it’s due for release or retention, can influence the financial declarations in the Statement at Completion. For instance, if the Performance Security is being retained due to unresolved issues, this might be reflected in the financial claims made in the statement.
7. With Clause 3.5: The Engineer’s determinations throughout the project can significantly shape the financials of the Statement at Completion. For example, if the Engineer has approved additional costs due to unforeseen circumstances, these will be reflected in the statement.
8. With Clause 20: The outcome of any disputes or claims resolved under Clause 20 will directly impact the Statement at Completion. For instance, if a dispute resolution leads to additional compensation to the Contractor, this will be included in the statement.
9. Financial Adjustments for Delays: If the Contractor incurs delay damages as per Clause 8.7, these damages are likely to be accounted for in the Statement at Completion. This means that any financial penalties for late completion would be deducted from the total amount due to the Contractor.
10. Reflecting Contractual Compliance: The Statement at Completion serves as a comprehensive financial summary at the project’s completion stage. Including delay damages in this statement reflects the Contractor’s adherence (or lack thereof to the contractual timelines. It ensures that the financial implications of any delays are transparently and formally documented.
11. Final Reconciliation: The Statement at Completion is a key document for the final reconciliation of all amounts due under the contract. This includes adjustments for any delay damages imposed under Clause 8.7, ensuring that the final financial settlement accurately reflects all aspects of the contract performance, including penalties for delays.

Key Points to Consider When Employing Clause 14.10 Statement at Completion

1. Timely Submission: Ensure the Statement at Completion is submitted within 84 days of receiving the Taking-Over Certificate. Adhering to this timeline is crucial to avoid contractual complications.
2. Comprehensive Documentation: The statement should include:
   • The value of all completed work as per the contract up to the date in the Taking-Over Certificate.
   • Any additional sums the Contractor considers due.
   • Separate estimates of any other amounts anticipated to become due.
3. Alignment with Sub-Clause 14.3: The format and detail required in the Statement at Completion should align with the requirements set out in Sub-Clause 14.3 for interim payment applications. This ensures consistency in financial reporting.
4. Engineer’s Certification: Be prepared for the Engineer’s review and certification as per Sub-Clause 14.6. The Engineer’s role is pivotal in validating the financial claims made in the statement.
5. Inclusion of Delay Damages: If applicable, include adjustments for any delay damages as per Clause 8.7. This ensures that the statement accurately reflects all financial aspects of the project, including penalties for delays.
6. Anticipate Dispute Resolution: Be aware of the potential for disputes and the role of Clause 20 in resolving them. Any disputes that arise and are resolved will have a direct impact on the final figures in the Statement at Completion.
7. Final Financial Reconciliation: Understand that the Statement at Completion is a key document for the final financial reconciliation of the project. It should accurately reflect all financial transactions and claims up to the completion stage.
8. Clear Segregation of Estimates: Ensure that any estimated future claims are clearly separated from actual work done and sums due. This clarity is essential for the Engineer’s review and for the final settlement process.

Flowchart

Detailed Explanation of the Flowchart with Durations

1. Start: Receipt of Taking-Over Certificate
   • Process Initiation: The entire process is triggered when the Contractor receives the Taking-Over Certificate. This certificate is a formal acknowledgment that the works or a section of the works have been completed.
2. Prepare Statement at Completion (Within 84 days)
   • Time-Bound Preparation: The Contractor has a strict timeframe of 84 days from receiving the Taking-Over Certificate to prepare the Statement at Completion. This statement is a comprehensive document that includes the value of all work done in accordance with the Contract, any additional sums due, and an estimate of future amounts that might become due under the Contract.
   • Importance of Timeliness: Adhering to this 84-day period is crucial as it ensures compliance with the contractual obligations and avoids potential disputes or delays in final payments.
3. Include: Work Value, Additional Sums, Estimated Amounts
   • Detailed Financial Breakdown: This step requires the Contractor to meticulously detail all financial aspects related to the project. It includes the actual value of the work completed, any additional sums that the Contractor believes are owed, and estimates of future claims or amounts due.
   • Accuracy and Completeness: The accuracy and completeness of this information are vital for a fair assessment by the Engineer and for the final financial reconciliation of the project.
4. Submit Statement to Engineer (Immediately)
   • Prompt Submission: Once the statement is prepared, it should be submitted to the Engineer without delay. This prompt submission is essential to keep the process moving and to meet the contractual timelines.
5. Engineer Reviews Statement (Upon Receipt)
   • Critical Review: The Engineer’s review is a pivotal decision point. Upon receiving the statement, the Engineer must assess its accuracy and completeness.
     • Approval Path: If the statement is satisfactory, the Engineer will proceed to certify it.
     • Revision Path: If the Engineer finds discrepancies or requires more information, they will ask the Contractor to revise and resubmit the statement.
6. Engineer Certifies Statement – Sub-Clause 14.6
   • Certification of Compliance: The Engineer’s certification signifies that the statement complies with the contractual requirements and that the financial claims made by the Contractor are fair and reasonable.
7. Adjustments for Delay Damages – Clause 8.7 (Consider)
   • Consideration of Penalties: This step involves adjusting the final amounts for any delay damages as per Clause 8.7. It’s a critical step to ensure that any penalties for delays are accurately reflected in the final settlement.
8. Impact of Dispute Resolutions – Clause 20 (Consider)
   • Resolving Disputes: The impact of any dispute resolutions, as outlined in Clause 20, is considered here. This ensures that the final statement reflects the outcomes of any adjudications or settlements.
9. Final Financial Reconciliation (Finalize)
   • Closing the Financials: The final financial reconciliation is where all the financial aspects of the project are settled. This step ensures that all payments, deductions, and adjustments are accounted for, leading to the accurate closure of the project’s financials.
10. End: Financial Closure of Project
    • Conclusion: The process concludes with the financial closure of the project, where all financial matters related to the project are settled and closed.

Detailed Explanation:

1. Contractor Submits Draft Statement to Engineer:
   • The Contractor prepares and submits the draft Statement at Completion to the Engineer.
2. Engineer’s Review (within 28 days):
   • The Engineer reviews the draft statement and must complete this review within 28 days.
3. Engineer Requests Additional Information/Revisions:
   • If necessary, the Engineer requests additional information or revisions from the Contractor.
4. Contractor Responds Promptly:
   • The Contractor is expected to respond promptly to the Engineer’s requests.
5. Contractor Provides Required Information/Revised Statement:
   • The Contractor submits the required information or a revised statement to the Engineer.
6. Agreement on Final Statement (within 28 days):
   • The Engineer and Contractor agree on the final Statement at Completion, typically within 28 days of the Contractor’s response.
7. Contractor Submits Final Statement:
   • The Contractor submits the agreed-upon final Statement to the Engineer.
8. Engineer Issues Interim Payment Certificate (within 28 days, if dispute exists):
   • If there is a dispute, the Engineer issues an Interim Payment Certificate for the agreed parts within 28 days.
9. Engineer Certifies Statement at Completion:
   • The Engineer certifies the Statement at Completion, confirming it meets the contractual requirements.
10. Employer Makes Final Payment (within 56 days):

• The Employer is required to make the final payment based on the certified Statement within 56 days.

Detailed Guide to Preparing the Statement at Completion

Step 1: Understand the Requirements

• Deep Dive: Clause 14.10 outlines the necessity of submitting a detailed financial statement after receiving the Taking-Over Certificate. This step is crucial for ensuring that all work and additional sums due are accounted for in the contract’s final stages.
• Key Focus: Pay special attention to the specific elements that must be included in the Statement, as outlined in the clause.

Step 2: Gather Necessary Documents

• Deep Dive: This involves compiling all contractual documents, progress reports, invoices, receipts, and records of variations or additional works. Accurate and comprehensive record-keeping throughout the project lifecycle is vital for this step.
• Key Focus: Ensure completeness and accuracy in the documentation to support your claims in the Statement.

Step 3: Calculate the Work Value

• Deep Dive: Assess the total value of all works completed under the contract. This includes the base contract work and any variations or additional works authorized during the project.
• Key Focus: Accuracy in valuation is critical. It’s advisable to cross-reference with previous payment certificates and contract amendments.

Step 4: Identify Additional Sums

• Deep Dive: This step involves identifying any extra costs incurred that are recoverable under the contract. These could include costs due to unforeseen circumstances, additional works, or delays not attributable to the contractor.
• Key Focus: Justification and documentation for each additional sum claimed are essential.

Step 5: Estimate Future Amounts

• Deep Dive: Future amounts might include pending claims or anticipated costs related to warranty work or unsettled variations. This requires a forward-looking assessment based on the contract’s terms and project circumstances.
• Key Focus: Provide a clear rationale for each estimated future amount, distinguishing them from completed works.

Step 6: Prepare the Draft Statement

• Deep Dive: The draft Statement at Completion should be comprehensive, well-organized, and in the format prescribed by the Engineer. It should reflect all the financial aspects of the project up to the Taking-Over Certificate.
• Key Focus: Clarity and thoroughness in the presentation of the draft are crucial for smooth approval.

Step 7: Review and Revise

• Deep Dive: Conduct a thorough review of the draft to ensure it is free from errors and omissions. This might involve cross-referencing with project records and contractual documents.
• Key Focus: Pay attention to detail and be prepared to make revisions based on internal reviews or feedback from stakeholders.

Step 8: Engineer’s Review

• Deep Dive: The Engineer’s review is a critical step where they assess the accuracy and completeness of the Statement. The Engineer may request additional information or clarifications.
• Key Focus: Be responsive to the Engineer’s inquiries and provide any additional information promptly.

Step 9: Address Engineer’s Feedback

• Deep Dive: This involves addressing any concerns or discrepancies raised by the Engineer. It may require negotiation or clarification meetings to reach an agreement.
• Key Focus: Maintain open communication with the Engineer and be flexible in making necessary adjustments.

Step 10: Finalize the Statement

• Deep Dive: After addressing all feedback, finalize the Statement at Completion. This final version should reflect all agreed-upon values and claims.
• Key Focus: Ensure that the final Statement is a true and accurate representation of all works and claims.

Step 11: Submission

• Deep Dive: The finalized Statement must be submitted within the specified 84-day period. This is a strict deadline and is crucial for contract compliance.
• Key Focus: Adhere to the deadline and ensure that all necessary copies are submitted as required.

Step 12: Await Engineer’s Certification

• Deep Dive: The Engineer’s certification is the formal acknowledgment of the Statement’s compliance with the contract terms. It is a key step towards the final financial settlement of the project.
• Key Focus: Understand that the Engineer’s certification is not an endorsement of all claims but a confirmation of the Statement’s procedural compliance.

Structured Checklists for Clause 14.10 – Statement at Completion:

1. Checklist for Proficient Execution and Deployment of Clause 14.10

Task	Description	Deadline	Status (Done/Pending)
Receipt of Taking-Over Certificate	Confirm receipt of the certificate to initiate the process.	–	[ ]
Preparation of Statement	Compile the value of work done, additional sums, and estimated future amounts.	Within 84 days of receipt	[ ]
Accuracy Check	Ensure all financial details are accurate and complete.	Prior to submission	[ ]
Submission to Engineer	Submit the completed statement to the Engineer.	Immediately after preparation	[ ]
Follow-up	Regularly follow up with the Engineer for feedback or certification.	Post-submission	[ ]

2. Checklist for Applying and Overseeing Clause 14.10

Task	Action Required	Responsible Party	Completion Indicator
Initiate Process	Ensure receipt of Taking-Over Certificate.	Contractor	Certificate Received
Prepare Statement	Detail all relevant financial aspects as per contract.	Contractor	Statement Prepared
Review and Submission	Review for accuracy and submit to Engineer.	Contractor	Statement Submitted
Engineer’s Assessment	Engineer to review and certify or request revision.	Engineer	Certification/Feedback Provided
Final Reconciliation	Conduct final financial reconciliation based on Engineer’s certification.	Contractor & Engineer	Reconciliation Completed

3. Checklist to Guide and Monitor Execution of Clause 14.10

Step	Key Considerations	Verification	Notes
Receipt of Certificate	– Date of receipt<br> – Official documentation	Certificate on file	–
Statement Preparation	– Inclusion of all contractually required details<br> – Adherence to 84-day deadline	Draft and final statement	Keep records of drafts and revisions
Submission	– Timeliness of submission<br> – Completeness of documentation	Submission record	Log date and time of submission
Engineer Review	– Timely review by Engineer<br> – Open communication for revisions	Review confirmation	Document any requests for revision
Certification and Reconciliation	– Engineer’s certification<br> – Accurate financial closure	Certification document	Ensure all financial aspects are settled

FAQs on Clause 14.10 Statement at Completion

Common misunderstandings associated with Clause 14.10 Statement at Completion

1. Deadline for Submission

• Misunderstanding: There’s often confusion about the 84-day deadline for submitting the Statement at Completion after receiving the Taking-Over Certificate.
• Clarification: The 84-day period is strict and must be adhered to for compliance with the contract terms.

2. Content of the Statement

• Misunderstanding: Contractors sometimes misunderstand the level of detail and the types of financial information required in the Statement.
• Clarification: The Statement must include a detailed value of all work done, additional sums due, and estimates of future amounts that might become due under the Contract.

3. Role of the Engineer in Review

• Misunderstanding: There can be misconceptions about the Engineer’s role and the extent of their authority in reviewing and certifying the Statement.
• Clarification: The Engineer reviews the Statement for accuracy and completeness and may request further information or revisions before certifying it.

4. Finality of the Statement

• Misunderstanding: Some parties might assume that the submission of the Statement at Completion finalizes all financial aspects of the project.
• Clarification: While it is a significant step towards final settlement, the Statement at Completion may be subject to revisions, especially if there are disputes or disagreements.

5. Impact of Disputes

• Misunderstanding: The impact of disputes on the Statement at Completion process is often overlooked.
• Clarification: Any disputes, especially those resolved under Clause 20, can affect the final Statement at Completion, necessitating adjustments or revisions.

6. Interactions with Other Clauses

• Misunderstanding: The way Clause 14.10 interacts with other clauses like Clause 8.7 (Delay Damages) and Clause 20 (Claims, Disputes, and Arbitration) is sometimes misunderstood.
• Clarification: Understanding these interactions is crucial for accurately reflecting all financial aspects in the Statement.

7. Estimates of Future Amounts

• Misunderstanding: Contractors may not fully grasp the importance of including estimates of future amounts in the Statement.
• Clarification: These estimates are essential for a comprehensive financial closure and should be included in the Statement.

8. Engineer’s Certification

• Misunderstanding: The meaning and implications of the Engineer’s certification of the Statement are sometimes misconstrued.
• Clarification: The Engineer’s certification does not imply acceptance of all claims but indicates compliance with contractual requirements.