What is the purpose of Clause 14.5 in the FIDIC Yellow Book 1999?

Clause 14.5 addresses the handling and valuation of Plant and Materials intended for incorporation into the Permanent Works. Its purpose is to establish a systematic and transparent process for certifying payments associated with these critical project components.

When does Clause 14.5 apply?

Clause 14.5 applies when the lists of Plant and Materials are included in the Appendix to Tender. If these lists are not included, Clause 14.5 does not apply.

What role does the Engineer play in Clause 14.5?

The Engineer is responsible for determining and certifying the additional amount related to Plant and Materials. Their role is pivotal in evaluating the Contractor's records and ensuring compliance with contractual conditions.

What are the conditions for applying Clause 14.5?

The conditions include the presence of lists of Plant and Materials in the Appendix to Tender. Additionally, satisfactory records must be maintained by the Contractor, and compliance with shipment conditions is required when applicable.

How does Clause 14.5 handle compliance with shipment conditions?

If Plant and Materials are shipped, compliance involves providing evidence of shipment, payment of freight and insurance, and a bank guarantee. Compliance is checked through a decision point in the flowchart.

What happens if records are not available for inspection under Clause 14.5?

If records, including orders, receipts, costs, and usage of Plant and Materials, are not available for inspection, Clause 14.5 is not applicable, and the process ends.

How does Clause 14.5 address reduction in contract value?

Clause 14.5 triggers a reduction in the contract value under Sub-Clause 14.3(c) when relevant Plant and Materials are included in the Permanent Works. This reduction avoids double-counting in subsequent payment certificates.

What currencies are considered in the certification process under Clause 14.5?

The currencies for the additional amount certified under Clause 14.5 should align with those in which payment will become due when the contract value is included under Sub-Clause 14.3(a).

What steps are involved in the certification process under Clause 14.5?

The certification process includes submission of satisfactory records, a statement of the cost of acquiring and delivering Plant and Materials, compliance with shipment conditions, reduction in contract value, and alignment of currencies.

How often should monitoring activities be conducted according to the flowchart?

Monitoring activities, such as Engineer's determination progress, compliance audits, and reviews of currency alignment, should be conducted regularly to ensure ongoing compliance with Clause 14.5.

Deep Dive into Clause 14.5 Plant and Materials intended for the Works

wisdomwaveshub.com

2 years ago

In the intricate web of FIDIC Yellow Book 1999, Clause 14.5 – Plant and Materials intended for the Works unveils a nuanced mechanism for handling materials destined for incorporation into the Permanent Works. This clause introduces a structured process within the payment certification framework, ensuring transparency and accountability in managing these crucial elements.

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