Clause 14.6 – Interim Payment Certificate Explained FIDIC

1️⃣ Purpose of Clause 14.6 [Issue of Interim Payment Certificate]

🤔 So, what’s this clause really about?

At its core, Clause 14.6 in both the 1999 and 2017 editions of the FIDIC Yellow Book is all about ensuring cash keeps flowing to the Contractor—but only in return for verifiable progress on the project.

Let’s imagine a real-world scenario: you’re running a multi-million dollar design-build project with phased deliverables over 24 months. The Contractor doesn’t get a lump sum at the end. Instead, they submit progress updates (called “Statements”), and in return, they get Interim Payment Certificates (IPCs)—these act like “official pay slips” for the job done so far.

That’s where Clause 14.6 steps in.

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🔍 What’s the role of this clause?

Clause 14.6 bridges two worlds:

• The Contractor, who needs timely payments to manage cash flow, pay suppliers, keep the workforce going.
• The Employer, who needs assurance that payments are only made for verified, contractually compliant progress.

📌 In short: It formalizes the review and certification of the Contractor’s claim for payment.

Let’s break this down by edition:

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📘 1999 Edition: Focus on Simplicity and Functionality

In FIDIC Yellow Book 1999, the clause says that the Engineer must issue an Interim Payment Certificate within 28 days of receiving a Statement from the Contractor under Sub-Clause 14.3.

But there’s a twist: that’s only if certain conditions are met:

1. The Performance Security must be in place.
2. The claimed amount must exceed the minimum threshold set out in the Appendix to Tender.
3. The works or Plant being claimed must meet contractual standards—if they don’t, payment can be withheld or reduced.

So, what’s the takeaway?

👉 The clause ensures the Employer only pays for real, measurable progress. But it also gives the Contractor reasonable certainty that, once their Statement is submitted, action will follow—ideally within four weeks.

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📙 2017 Edition: More Structured, Transparent, and Contractor-Friendly

The 2017 Edition takes this a few steps further—adding granularity and procedural fairness, especially in light of FIDIC’s broader move towards proactive contract administration.

Here’s how Clause 14.6 evolved:

• It’s now divided into three sub-clauses:
  • 14.6.1: Lays out what an IPC must include.
  • 14.6.2: Details when and how the Engineer can withhold parts of a payment.
  • 14.6.3: Allows corrections to past IPCs and introduces “identified amounts”—a key innovation!

Let’s unpack this.

📌 Clause 14.6.1 clarifies that the Engineer must issue the IPC:

• After verifying the Contractor’s Statement.
• Based on fair value and any agreed or determined changes.
• With written explanations for any discrepancies from the Contractor’s submitted amount.

📌 Clause 14.6.2 adds transparency:

• The Engineer can withhold amounts only in three clear cases:
  • Non-conformity in works or documentation.
  • Failure to perform obligations.
  • Errors in the Statement.
• Crucially, the Engineer must give a written notice explaining why and how much is being withheld. This wasn’t mandatory in the 1999 edition.

📌 Clause 14.6.3 is the Contractor’s safety net:

• If the Engineer misses something or under-certifies, the Contractor can flag this as an “identified amount” in the next Statement.
• That keeps the issue alive without the need for a formal claim right away—fostering smoother project administration.

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🕰️ Why the Evolution from 1999 to 2017?

Great question. The shift reflects FIDIC’s broader intent in the 2017 suite: make contracts more proactive, transparent, and less reliant on post-facto dispute resolution.

In practice:

• The 1999 edition left more discretion with the Engineer, which could sometimes lead to under-certification or payment disputes.
• The 2017 edition introduces clear duties, structured rights, and mechanisms for dispute mitigation (like Sub-Clause 3.7—Agreement or Determination).

It’s a move from “let’s sort it out later” to “let’s get it right now.”

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📊 Implications for the Parties

✅ For the Contractor:

• You gain better protection through mandatory reasoning for withheld payments.
• You can preserve disputes without immediately triggering formal claims.

✅ For the Engineer:

• You’re no longer just a certifier—you’re a communicator. You must justify deviations and enable early resolution.

✅ For the Employer:

• You get a disciplined process ensuring you only pay for contractually valid, performed work.

2️⃣ Breakdown of Clause 14.6 [Issue of Interim Payment Certificate]

✍️ Let’s Set the Scene

Imagine you’re the Contractor. You’ve been sweating it out on-site, hitting your milestones, and it’s payday—time to submit your monthly Statement for progress payments. Once you hit “send,” the clock starts ticking. Now the Engineer has to respond. That’s what Clause 14.6 is all about: what happens next, how it’s evaluated, and—importantly—under what circumstances payment might be adjusted or withheld.

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📘 FIDIC 1999 – The Classic Version

Here’s how it works under the 1999 edition.

Key Flow:

1. Contractor submits a Statement under Clause 14.3.
2. The Engineer has 28 days to review and issue an Interim Payment Certificate (IPC).

But wait—there are some conditions:

• No certificate will be issued until the Performance Security is received.
• The Engineer can withhold certification if:
  • The claimed amount is less than a specified minimum IPC value.
  • The work or goods claimed aren’t up to contractual standards.
  • The Contractor hasn’t met certain contractual obligations.

📌 One neat feature? The Engineer can correct previous Payment Certificates without the Contractor having to resubmit a claim.

🔍 Key nuance: The clause gives the Engineer flexibility but leaves some judgment calls vague. For example, what exactly counts as “non-conforming” work?

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📙 FIDIC 2017 – Let’s Level Up the Structure

The 2017 edition completely reshapes this clause into three sub-clauses. It’s clearer, fairer, and, frankly, more contractor-friendly. Here’s the lowdown:

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🧾 Clause 14.6.1 – The IPC

This sub-clause details how the Engineer should assess the Contractor’s Statement. Here’s the breakdown:

✅ Timeline: Still 28 days, just like 1999.

✅ Engineer’s Duties:

• Certify the amount that is “fairly due.”
• Include additions/deductions from:
  • Clause 3.7 (Agreement/Determination),
  • The Contract generally,
  • Any other legitimate source.
• Attach detailed explanations if there’s any discrepancy between the Contractor’s Statement and what the Engineer certifies.

📌 This is a significant step forward from 1999. It moves from discretionary silence to mandatory transparency.

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🛑 Clause 14.6.2 – Withholding Part of an IPC

Now we’re talking about situations where the Engineer can withhold payment.

🔹 Scenario 1:

If the certified IPC value falls below a minimum threshold, the Engineer can withhold it entirely—but must notify the Contractor.

🔹 Scenario 2:

The Engineer can withhold specific amounts only in three well-defined cases:

1. 🔧 Non-conforming work or supplies: Cost of rectification may be withheld.
2. ⏳ Unfulfilled obligations: If the Contractor hasn’t performed something they should have, the Engineer can withhold the value of that work—but must provide written notice and breakdowns.
3. 🧮 Errors in the Statement: If errors prevent proper evaluation, the affected amount can be withheld until it’s corrected in the next Statement.

📌 For each withheld item, the Engineer must detail the calculation and state the reason—no more vague deductions!

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🔁 Clause 14.6.3 – Correction or Modification

This is the catch-up clause—fixing what’s missing or wrong in earlier IPCs.

• The Engineer can correct any prior certificate if they realize it wasn’t quite right.
• If the Contractor believes an amount was wrongly left out, they can flag it as an “identified amount” in their next Statement.
• If still unresolved, the Contractor may escalate under Clause 3.7 [Agreement or Determination].

🧠 Smart feature: This lets both parties keep the dialogue open and dynamic without launching formal disputes too early.

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🔎 Comparing 1999 vs 2017 Clause Breakdown

Feature	1999	2017 (14.6.1–14.6.3)
Timeline to issue IPC	28 days	28 days
Preconditions	Performance Security	Performance Security + Contractor’s Rep
Engineer’s explanation required	No	Yes – mandatory supporting details
Withholding rules	Implied/discretionary	Explicit, limited to 3 clear grounds
Contractor recourse	Informal	“Identified amounts” + escalation via 3.7
Structure	Single clause	Broken down into three mini-clauses for clarity

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🎯 Real-World Implications

• For the Contractor: You now have clearer grounds to question an IPC and push back constructively.
• For the Engineer: Your certification duties now come with formal procedural obligations—no more arbitrary deductions.
• For the Employer: Better audit trail, fewer disputes, more transparency.

3️⃣ Key Interpretations and Implications of Clause 14.6

🎯 At its heart, Clause 14.6 is about:

• 💰 Cash flow security for the Contractor
• 📏 Verification safeguards for the Employer
• 🧑‍⚖️ Procedural duties for the Engineer

But it’s not just about ticking boxes. There’s a whole lot of legal nuance and contractual risk packed into this one clause. Let’s unpack that together.

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🔍 What does the clause not say directly, but strongly imply?

✅ Certification ≠ Approval

Even when the Engineer issues an IPC, the clause explicitly states that the certificate does not imply acceptance of the Works, Plant, Materials, or documentation. In both editions, this means:

The Employer is not legally bound to accept defective or non-conforming work just because it was paid for in an interim cycle.

So, payment can happen while still preserving the right to reject or remedy things later. Strategic, right?

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🚨 Withholding Payments – What’s Allowed?

In both versions, the Engineer may withhold payment, but there are clear conditions and consequences.

In the 1999 Edition, withholding is allowed:

• If the work is non-compliant, until it’s fixed.
• If the Contractor has been notified of failure to perform obligations.
• If the IPC value is less than a minimum (as per Appendix to Tender).

👉 Risk for the Contractor: If the Engineer exercises discretion without transparency, it could delay much-needed payments, causing cash flow strain.

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In the 2017 Edition, FIDIC raises the bar with structure and accountability:

The Engineer may only withhold payment if:

1. There is non-conforming work, and the estimated rectification cost is withheld.
2. The Contractor hasn’t fulfilled a duty, and a value can be assigned to that failure.
3. There are errors in the Statement that obstruct proper assessment.

And in each case:

• 📩 The Engineer must issue a Notice to the Contractor with detailed reasoning.
• 🧾 The IPC must clearly show what was withheld, how it was calculated, and why.

📌 This is a massive leap forward for fairness. No more mysterious deductions. Everything must be justified.

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⚠️ Obligations Embedded Within Clause 14.6

This clause subtly imposes duties on all parties:

👷 Contractor:

• Must appoint their Contractor’s Representative (2017 only) and provide supporting documentation accurately.
• Must flag omitted amounts in the next Statement to protect their position under 14.6.3.
• Risk: Failure to do this can waive future entitlement unless escalated through Clause 3.7.

🧑‍💼 Engineer:

• Has a strict 28-day timeline to assess and respond.
• Must act fairly and transparently—especially in the 2017 edition.
• Risk: Delays or omissions could lead to disputes, financing charges, or even claims against the Employer.

🏢 Employer:

• Relies on the IPC but remains liable under Clause 14.7 to pay on time—56 days is standard if not otherwise agreed.
• Risk: Late payment triggers financing charges under Clause 14.8—automatically, without a formal claim​.

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🧠 Exclusions & Risk Mitigation

There’s also what’s not included in the IPC:

• Prior overpayments can be adjusted silently by the Engineer.
• If a dispute exists but hasn’t gone through Clause 3.7, it can still live on via the “identified amounts” mechanism in Clause 14.6.3 (2017).

This gives the Contractor a strategic tool to preserve entitlements while avoiding escalation too early.

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💡 Practical Interpretations for Site-Level Scenarios

🔧 Example: Faulty cable installation

If the Contractor installs cable that doesn’t meet spec:

• The Engineer can estimate the cost of removal/replacement and withhold that amount in the IPC (both editions).
• In 2017, the Engineer must notify the Contractor with a breakdown.

📦 Example: Statement has mispriced items

• Engineer finds unit rates mismatched or quantities incorrect.
• The IPC may withhold part of the payment and explain why.
• In 2017, this must be corrected in the next Statement, or it can escalate to Clause 3.7.

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🔐 The “Identified Amounts” Trick – Only in 2017

Clause 14.6.3 gives the Contractor a clever move: if they think the IPC is unfairly low, they can:

1. Mark the shortfall as an “identified amount” in the next Statement.
2. If it’s ignored again, they can escalate using Clause 3.7.

🚀 This is a game-changer. It lets the Contractor keep the issue alive without disrupting the whole payment process.

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🔚 Bottom Line?

Clause 14.6 is far more than a billing mechanism—it’s a risk gate, a fairness framework, and a litmus test of how well the contract is being administered.

• In 1999, it’s efficient but vague. A lot rides on the Engineer’s discretion.
• In 2017, it’s structured, fairer, and built to reduce disputes.

4️⃣ Cross-Referencing with Other Clauses: How Clause 14.6 Connects the Dots 🧩

🤝 Think of Clause 14.6 as the middle link in a payment chain.

It doesn’t stand alone—it feeds into, and is fed by, several other clauses. Let’s walk through the most relevant ones and explore how they interact.

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🔗 A. Link to Clause 14.3 [Application for Interim Payment]

This is the trigger for Clause 14.6.

• The Contractor must first submit a Statement in line with Clause 14.3—this is like raising a hand to say, “Hey, I’ve done the work. Please pay me.”
• That Statement must include the value of work done, materials on site, and any claims or entitlements.
• Only after this is received can the Engineer begin the 28-day timer under Clause 14.6 to issue an Interim Payment Certificate (IPC).

📌 Practical Tip: If the Contractor’s submission under 14.3 is incomplete or ambiguous, the Engineer’s timeline under 14.6 can be disrupted—potentially delaying payment and causing project tension.

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🔗 B. Link to Clause 14.7 [Payment]

This is where the Employer’s payment obligation kicks in.

• Once the IPC is issued under Clause 14.6, the Employer must pay the certified amount within the time specified in the Contract Data—typically 56 days if not otherwise stated.
• Delay in payment? Well, now we transition to…

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🔗 C. Link to Clause 14.8 [Delayed Payment]

This clause protects the Contractor’s cash flow.

• If the Employer doesn’t pay on time under Clause 14.7, the Contractor is entitled to financing charges, compounded monthly—no formal notice or claim needed.
• The delay period starts automatically after the payment due date, regardless of when the IPC was actually issued​.

🚨 This makes timely and accurate certification under 14.6 mission-critical for the Employer.

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🔗 D. Link to Clause 3.7 [Agreement or Determination] (2017 only)

This is where disputes get structured.

• If the Contractor believes the IPC is unfair or under-represents their entitlement, they can flag an “identified amount” under Clause 14.6.3.
• If the Engineer still doesn’t include it, the Contractor can escalate under Clause 3.7—kicking off a neutral process of consultation and determination.
• This is a significant evolution from the 1999 edition, where the Contractor had no such intermediate recourse mechanism.

🧠 The key message? Clause 14.6 doesn’t just end with the certificate—it can be the starting point of a formal resolution process if not handled properly.

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🔗 E. Link to Clause 16.1 [Suspension by Contractor] (both editions)

Clause 14.6 can also have serious consequences if misused.

• If the Engineer fails to issue a certificate under Clause 14.6, and the Contractor doesn’t receive payment within the timeframe in Clause 14.7, the Contractor can—after giving 21 days’ notice—suspend work under Clause 16.1.
• This is a big risk for the Employer. A delayed IPC can ripple through to site shutdown, loss of time, and even termination rights under Clause 16.2.

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🔗 F. Link to Clause 20.2 [Claims for Payment and/or EOT] (2017)

Suppose there’s a disagreement over the IPC content—perhaps the Engineer rejects a time-related cost. The Contractor doesn’t just have to accept it.

• Under Clause 14.6.3, the Contractor can log it as an “identified amount.”
• Then, they may proceed to a Claim under Clause 20.2—and the Engineer must either agree or determine it under Clause 3.7.2.

🛡️ This multi-stage escalation is designed to avoid courtroom battles and settle things contractually.

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🔗 G. Bonus Link: Clause 14.5 – Plant and Materials Off-site

Both editions allow the Contractor to claim for Plant and Materials that are:

• Off-site but destined for the Works,
• Properly documented and secured.

📌 These items must be included in the Statement under Clause 14.3, and once accepted by the Engineer, are reflected in the IPC issued under Clause 14.6.

Failing to follow proper storage or documentation can lead to these costs being withheld or delayed in payment.

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🧭 Why Does This Web of Clauses Matter?

• For the Contractor: Knowing how these clauses interplay allows you to time your Notices and Statements strategically, protect entitlements, and maintain leverage.
• For the Employer: It’s about risk management. A misstep in Clause 14.6 can expose you to interest claims, suspension, or even termination.
• For the Engineer: You’re the referee. Clause 14.6 links you to multiple others where neutrality, diligence, and communication are critical.

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🧩 Summary Map of Key Clause Interactions with 14.6

Clause	Relationship with 14.6	Risk/Opportunity
14.3	Triggers 14.6; Statement must be complete	Incomplete submission → delays
14.7	Employer’s duty to pay certified amount	Triggers payment timeline
14.8	Financing charges for delayed payment	Automatic penalty without formal claim
3.7 (2017)	Dispute mechanism for under-certified IPCs	Enables structured resolution
16.1	Suspension if IPC or payment is delayed	Operational disruption
20.2 (2017)	Formal claim route if IPC omits eligible items	Protects rights if “identified amounts” ignored
14.5	Covers off-site Plant/Materials included in IPC	IPC depends on proper proof & conditions

5️⃣ What If Scenarios – How Clause 14.6 Plays Out on the Ground 🏗️

We’re going to look at a series of real-life style situations and explore how Clause 14.6 would operate, based on whether you’re using the 1999 or 2017 Yellow Book edition. Let’s go scenario by scenario…

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🎬 Scenario 1: The Engineer Doesn’t Issue the IPC Within 28 Days ⏳

Situation: The Contractor submits a properly formatted Statement under Clause 14.3. It’s been 30 days—still no Interim Payment Certificate from the Engineer.

🔹 1999 Edition:

• There’s no hard consequence spelled out.
• But this may lead the Contractor to raise a formal notice, and possibly escalate under Clause 20 (Claims), or even proceed towards suspension under Clause 16.1 if payment is delayed beyond the limit.

🔹 2017 Edition:

• The same 28-day limit applies.
• But the Contractor is better armed: they can include the amount in their next Statement as an “identified amount” under Clause 14.6.3.
• If still unpaid or uncaptured, they may invoke Clause 3.7 [Agreement or Determination], turning this into a formal dispute path before escalation.

🎯 Lesson: In 2017, there’s a built-in feedback loop. The Engineer can’t just ignore a Statement—there’s accountability, and the Contractor has recourse.

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🎬 Scenario 2: The IPC Is Issued for Less Than the Contractor Claimed 😮

Situation: Contractor claims $500,000. The Engineer certifies only $420,000 with no breakdown.

🔹 1999 Edition:

• The Engineer may offer no justification.
• The Contractor has to chase down explanations and possibly lodge a Clause 20.1 claim to seek the remainder.

🔹 2017 Edition:

• Under Clause 14.6.1, the Engineer is required to explain all deviations from the Contractor’s Statement.
• If the Contractor disagrees, they can tag the omitted $80,000 as an “identified amount” in the next Statement—and prepare for Clause 3.7 resolution if it’s ignored again.

📌 Practical Tip: Contractors should track all deviations and log omitted amounts immediately to keep their rights intact under Clause 14.6.3.

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🎬 Scenario 3: Part of the IPC Is Withheld Due to “Unfulfilled Obligations” 🚧

Situation: The Contractor didn’t yet submit an as-built drawing. The Engineer decides to withhold $25,000 from the IPC.

🔹 1999 Edition:

• Permitted under 14.6—but vague. The Engineer isn’t required to give a formal notice or breakdown. This opens the door to tension and even claims.

🔹 2017 Edition:

• Welcome structure! Under Clause 14.6.2, the Engineer must issue a written Notice, stating:
  • The obligation not fulfilled,
  • The value being withheld,
  • How it was calculated.
• The Contractor can resolve the issue by completing the obligation or flagging it for dispute resolution.

✅ Smart move: Engineers should use standard notice templates to fulfill 14.6.2 consistently. Contractors should log withheld amounts in the next IPC Statement.

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🎬 Scenario 4: The Employer Fails to Pay Even After the IPC Is Issued 💸

Situation: IPC is issued for $300,000. The Employer fails to pay after 56 days (or agreed payment term).

🔹 Both Editions:

• Under Clause 14.8, the Contractor is automatically entitled to financing charges for late payment—calculated from the due date.
• There’s no need for a claim notice—it’s an automatic right.

🚨 But here’s the twist:

• If delays persist, the Contractor can, under Clause 16.1, give a 21-day notice of suspension.
• Prolonged non-payment? That can trigger Clause 16.2—Contractor’s right to terminate.

🎯 Takeaway: The cash flow stakes are real. Delays under Clause 14.6 can snowball into major contractual consequences.

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🎬 Scenario 5: The Contractor Forgets to Appoint a Contractor’s Representative (2017 Only) 🙈

Situation: The Statement is submitted, and the Performance Security is in place. But the Contractor never formally appointed their Representative.

🔹 2017 Edition:

• Under Clause 14.6.1, the Engineer is not obligated to issue the IPC until:
  1. Performance Security is received ✅
  2. Contractor’s Representative is formally appointed ❌

📌 This gives the Engineer legitimate grounds to withhold the certificate—not maliciously, but by procedure.

📍 Contractor Risk: This is a self-inflicted delay. It halts cash flow and could delay the entire project.

✅ Best practice: Contractors should verify compliance with all administrative preconditions before submitting their first Statement.

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🎬 Scenario 6: Overpayment in a Previous IPC – What Happens Now?

Situation: The Engineer realizes that $40,000 was wrongly included in a past IPC.

🔹 1999 Edition:

• The Engineer may simply adjust the next IPC downward. There’s no express clause for “retroactive correction,” but it’s implied.

🔹 2017 Edition:

• Clause 14.6.3 allows corrections or modifications of previous certificates in any future IPC.
• This can include genuine errors or adjustments after Determinations under Clause 3.7.

📌 Contractors should be alert to adjustments and ask for detailed justification to avoid silent deductions.

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🤔 Final Reflection: Why These Scenarios Matter

These aren’t just technical hypotheticals—they reflect what happens all the time on design-build projects. By mapping the practical consequences of each version of Clause 14.6, you gain:

• ✅ Predictability in payments,
• ✅ Clarity in your project cash flow strategy,
• ✅ Tools to reduce payment disputes before they explode.

6️⃣ Suggestions for Clarity and Improvement 🔍✍️

🚦 Why Make Modifications?

Even though Clause 14.6 is solid in both the 1999 and 2017 editions, projects vary—and so should the contract. Sometimes the clause needs:

• More precision in how the Engineer should communicate deductions.
• Alignment with governing law, such as prompt payment rules.
• Clear procedures for repetitive issues, like delay in IPC issuance.

But here’s the catch: modifying Clause 14.6 poorly can violate FIDIC’s Golden Principles, especially GP2 and GP3.

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🧭 GP2 Recap: What FIDIC Says

📌 “The Particular Conditions must be drafted clearly and unambiguously.”

Any modification must:

• Refer to the exact sub-clause number.
• Clearly state if it adds to, replaces, or deletes part of the GCs.
• Avoid ambiguity in how it interacts with other clauses.
• Not leave any obligations or rights undefined.

👉 Vague edits or saying “not used” without replacing the clause are major no-nos under GP2​.

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🧪 Examples of Ambiguities in Unmodified Clause 14.6

1. “Fairly due”: What if parties interpret “fair” differently?
2. No requirement to provide calculation method for deductions (especially in 1999).
3. No default process if the Engineer fails to issue the IPC within 28 days.

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🛠️ Suggested Enhancements + Model Wording (GP2-Compliant)

✅ 1. Clarify Engineer’s Duty to Justify Deductions (14.6.1 / 14.6.2)

Problem: Contractors often receive IPCs with deductions but no full calculation or audit trail.

Modification Suggestion (GP2-aligned, ADDITION to GC):

Sub-Clause 14.6.2 – Additional Text:

“Where the Engineer determines to withhold part of the Interim Payment Certificate, the Notice issued shall include:

• a detailed breakdown of each deduction made;
• the applicable Sub-Clause under which the deduction was made;
• supporting documents or records justifying the deduction.

This Sub-Clause adds to, and shall be read with, the existing GCs Sub-Clause 14.6.2.”

🎯 Why this works: It complies with GP2 by stating it’s an addition and clarifies a procedural step that avoids disputes.

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✅ 2. Define a Backup Mechanism if Engineer Misses 28-Day Deadline

Problem: There’s no “Plan B” if the Engineer forgets or refuses to issue the IPC.

Modification Suggestion (GP2-aligned, AMENDMENT):

Sub-Clause 14.6.1 – Amended Final Paragraph:

“If the Engineer fails to issue an Interim Payment Certificate within 28 days after receiving the Statement in accordance with Sub-Clause 14.3, and without having provided Notice under Sub-Clause 14.6.2, the amount claimed by the Contractor shall be deemed to have been certified, and the Employer shall be obligated to pay the full amount of the Statement.”

“This replaces the final sentence of GCs Sub-Clause 14.6.1.”

🚨 This clause introduces a deemed certification mechanism—a safeguard used in public infrastructure contracts in some jurisdictions. Use cautiously, especially when the legal system requires express certification.

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✅ 3. Introduce a Threshold for Withholding Based on Contract Value

Problem: Minor omissions may delay major payments, leading to administrative bottlenecks.

Modification Suggestion (GP2-aligned, ADDITION):

Sub-Clause 14.6.2 – Additional Paragraph:

“The Engineer shall not withhold amounts that individually or collectively account for less than 2% of the value of the Statement unless the Engineer has reason to believe that such amounts relate to non-conformities of safety-critical systems or statutory compliance.”

✅ Why it works: Adds a proportionate test, encourages full payment where deductions are marginal, while preserving discretion for safety.

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📝 Example: How NOT to Modify Clause 14.6

❌ “Clause 14.6 – Not Used.”

This violates GP2 and GP3 because:

• It deletes the clause entirely without replacing its substance.
• It creates a vacuum in payment processing.
• It shifts power unfairly (likely to Employer), violating risk-balance principles.

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🔎 Examples of Real-Life Triggers for Amendment

Trigger Situation	Smart Amendment Tactic
Engineer routinely misses deadlines	Add deemed-certification rule
Payments often disputed due to unclear deductions	Require detailed justifications
Project in a country with strict late-payment laws	Modify Sub-Clause 14.7 or 14.8 alongside 14.6
Multi-phase payment schedule by milestones	Tailor Clause 14.4 Schedule of Payments and link to IPC issue timeline

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🧩 Final Thoughts: Keep the Golden Principles Front & Centre

🔐 Use GP2 to safeguard consistency and clarity.

🛠 Use GP3 to ensure fair risk-sharing: Don’t let IPC clauses unfairly place financing burdens on the Contractor without corresponding control.

💡 When modifying Clause 14.6:

• Label each change clearly: This is an addition to… or This replaces…
• Add only what’s needed for clarity or to align with local law or project-specific conditions.
• Never leave obligations vague or procedures undefined.

7️⃣ Final Takeaways – Making the Most of Clause 14.6

🧩 What is Clause 14.6 Really About?

At a high level, Clause 14.6 is the engine room of project cash flow. It ensures that work done by the Contractor is reviewed, assessed, and paid for—on time and based on actual, measurable progress.

But here’s the twist:

💬 “Clause 14.6 is about trust—but verify. It’s not just about money; it’s about structure, transparency, and momentum.”

Whether you’re a Contractor needing regular payments to keep operations running, or an Employer needing certainty that you’re paying for value, Clause 14.6 is where this balance gets tested—every month.

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🔍 1999 vs 2017: What’s the Evolution?

Feature	1999 Edition	2017 Edition
Engineer’s timeline	28 days	28 days
Grounds for withholding	Vague and discretionary	Explicit (14.6.2), with required notice and explanation
Engineer’s obligation to explain	Optional	Mandatory (14.6.1)
Contractor’s dispute recourse	Informal (via Clause 20)	Structured – “identified amounts” + Clause 3.7
Integration with dispute process	Loose	Tight integration with Clause 3.7 and Clause 20

🎯 Bottom Line: The 2017 edition upgrades Clause 14.6 from a functional payment mechanism to a full-fledged, accountable contract administration process.

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💡 Key Best Practices for Each Party

✅ Contractors – Stay Proactive:

• Submit complete Statements under Clause 14.3 with detailed backup.
• Immediately log underpayments as “identified amounts” in the next IPC cycle (2017).
• Track the 28-day timeline and escalate early if IPCs are delayed.

✅ Engineers – Document Everything:

• Always issue written notices for withheld amounts with precise reasoning and references to Sub-Clauses.
• Maintain logs of previous corrections and anticipated future deductions.
• Use Clause 3.7 consultation steps when values are disputed—don’t stall.

✅ Employers – Know the Ripple Effects:

• A delayed IPC doesn’t just delay cash—it can lead to:
  • Financing claims (14.8),
  • Suspension of Works (16.1),
  • Even termination rights (16.2).
• Make sure the Engineer has the support to administer this clause efficiently.

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🧠 Key Interpretive Insights Worth Remembering

📌 “Fairly due” doesn’t mean “what feels right”—it means what can be supported with evidence and logic.

📌 “Identified amounts” (2017 only) are a pressure release valve—they preserve rights without litigation. Use them smartly!

📌 The IPC is not an acceptance certificate. You can still reject or require corrections even after payment is made.

📌 Clause 14.6 sits in the center of a web of critical clauses: 14.3 (Statement), 14.7 (Employer payment), 14.8 (delays), 3.7 (Engineer’s Determination), and 20 (Claims). Always look at the full ecosystem.

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🔧 Modify With Purpose – And the Golden Principles

Want to tweak Clause 14.6 for your project? Great. Just remember:

• Follow GP2: Be clear, precise, and state whether you’re adding, replacing, or deleting.
• Respect GP3: Maintain the FIDIC balance of risk—don’t let one party dominate the payment process.
• Align with local legal requirements (e.g., Construction Acts, prompt payment legislation).
• Provide thresholds, timelines, and formatting standards in the Particular Conditions to ensure clarity.

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🔮 Final Word: What Clause 14.6 Tells Us About a Project

If you want to understand how well a project is managed, don’t start with the specs—start with the IPC process.

• Are IPCs issued on time?
• Are deductions explained clearly?
• Are disputes resolved in the Statement cycle or allowed to fester?

The answers will reveal the health of the entire contract.

✅ Clause 14.6 – Contractor’s Checklist

#	Task	Reference	✔️ Completed
1	Have you submitted your Statement in accordance with Clause 14.3?	14.3	☐
2	Is the Statement properly supported by measurements, materials data, and claim references?	14.3	☐
3	Have you appointed your Contractor’s Representative (2017 only)?	4.3, 14.6.1	☐
4	Is the Performance Security valid and submitted?	4.2, 14.6.1	☐
5	Have you reviewed the IPC for under-certification?	14.6.1	☐
6	Are you logging “identified amounts” in your next Statement (if needed)?	14.6.3	☐
7	Have you prepared to escalate unresolved deductions via Clause 3.7?	3.7, 14.6.3	☐

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✅ Clause 14.6 – Engineer’s Checklist

#	Task	Reference	✔️ Completed
1	Was the Statement received in proper format with all required documentation?	14.3	☐
2	Has the IPC been issued within 28 days of receiving the Statement?	14.6.1	☐
3	Have all deductions been justified with written Notices to the Contractor?	14.6.2	☐
4	Do the Notices include a breakdown and reference to specific Sub-Clauses?	14.6.2	☐
5	Have prior Payment Certificates been checked for corrections?	14.6.3	☐
6	Are all modifications recorded and logged for audit purposes?	14.6.3	☐

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✅ Clause 14.6 – Employer’s Checklist

#	Task	Reference	✔️ Completed
1	Have you confirmed the Engineer has all resources needed to review Statements on time?	General	☐
2	Have you verified that the Performance Security has been received and is valid?	4.2, 14.6.1	☐
3	Have you scheduled payments according to the IPC and Clause 14.7 timelines?	14.7	☐
4	Are there procedures in place to handle late payment and avoid 14.8 financing charges?	14.8	☐
5	Are any disputes from IPCs being escalated through Clause 3.7 or Clause 20 when needed?	3.7, 20	☐
6	Is the payment process monitored regularly for compliance and performance?	General	☐

📄 1. Contractor’s Letter – Notice of Omitted Amount in IPC (2017 Edition)

Subject: Notification of Identified Amount Omitted from Interim Payment Certificate – Clause 14.6.3

To: The Engineer
Date: [Insert Date]
Project: [Project Name / Contract No.]

Dear [Engineer’s Name],

We refer to our Statement submitted on [Date] and the subsequent Interim Payment Certificate No. [#], issued on [Date].

We note that the certified amount excludes a sum of [Amount], which was part of our original Statement and remains unpaid. As per Clause 14.6.3 [Correction or Modification], we hereby identify this amount as an “identified amount”, and will include it again in our forthcoming Statement.

We respectfully request that this matter be addressed promptly or determined under Clause 3.7, if necessary.

Yours sincerely,
[Contractor’s Representative Name]
[Title]
[Contractor Name]

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📄 2. Engineer’s Letter – Notice of Withholding Under Clause 14.6.2

Subject: Notice of Withholding from Interim Payment Certificate – Clause 14.6.2

To: [Contractor Name]
Date: [Insert Date]
Project: [Project Name / Contract No.]

Dear [Contractor’s Representative],

We refer to your Statement dated [Date] and wish to inform you that part of the claimed amount has been withheld from Interim Payment Certificate No. [#], in accordance with Clause 14.6.2.

The following amount(s) have been withheld:

Item	Amount Withheld	Reason	Relevant Sub-Clause
[Example: Incomplete site fencing]	[USD XXX]	Non-performance	4.1

Supporting documents and calculations are enclosed.

Please rectify the identified issues or submit a justification by [Date], to enable reassessment in the next IPC cycle.

Yours faithfully,
[Engineer’s Name]
[Title]
[Employer’s Representative or Engineer’s Firm]

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📄 3. Contractor’s Letter – Reminder for Delayed IPC Issuance (After 28 Days)

Subject: Delay in Issuance of Interim Payment Certificate – Clause 14.6

To: The Engineer
Date: [Insert Date]
Project: [Project Name / Contract No.]

Dear [Engineer’s Name],

We refer to our Statement submitted on [Date], in accordance with Clause 14.3. We have not yet received the corresponding Interim Payment Certificate, despite the lapse of the 28-day period stipulated in Clause 14.6.

We respectfully request confirmation of the status of the certification process and ask that the IPC be issued without further delay. If not issued by [Date], we may be required to consider invoking our rights under Clause 14.6.3 and, if needed, escalate under Clause 3.7.

Thank you for your prompt attention.

Yours sincerely,
[Contractor’s Representative Name]
[Title]
[Contractor Name]

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📄 4. Employer’s Letter – Payment Confirmation Following IPC

Subject: Confirmation of Payment Based on Interim Payment Certificate No. [#]

To: [Contractor Name]
Date: [Insert Date]
Project: [Project Name / Contract No.]

Dear [Contractor’s Representative],

We acknowledge receipt of the Interim Payment Certificate No. [#] dated [Date] from the Engineer, certifying an amount of [USD Amount].

We confirm that payment in the certified amount has been processed in accordance with Clause 14.7 and transferred to your designated account on [Payment Date].

Please contact us should you have any queries.

Yours sincerely,
[Employer Representative Name]
[Title]
[Employer’s Name]

Flowchart

Detailed Explanation

1. Contractor Submits Statement and Supporting Documents: The Contractor initiates the process by submitting a detailed statement and supporting documents to the Engineer. This statement includes all the work done and amounts the Contractor believes are due.
2. Engineer Reviews Statement: The Engineer has a 28-day period to review the submitted statement. This review is crucial to ensure that all claims and work done are in line with the contract terms.
3. Employer Checks Performance Security Approval: Before any payment certificate can be issued, the Employer must have approved the Performance Security. This step is a safeguard to ensure that the contractual obligations regarding security are met.
4. Issue of Payment Certificate: If the Performance Security is approved, the Engineer proceeds to issue the Interim Payment Certificate. This certificate states the amount determined to be due to the Contractor.
5. Consideration of Deductions and Adjustments: The Engineer may consider any necessary deductions or adjustments. This could include costs for rectification or replacement of work not in accordance with the contract, or withholding the value of work or obligations not performed as per the contract.
6. Completion of Payment Process: Once the Interim Payment Certificate is issued, the payment process is completed, and the Contractor receives the certified amount.