project management ch5

PROJECT MANAGEMENTTOPIC 5: SIA CONDITIONS OF CONTRACT

5.1 INTRODUCTION

The conditions of contract define the terms under which the works are to be executed and maintained and set forth the obligations and liabilities of the parties to the contract. The powers of the Architect, the terms of payment and the manner in which a dispute under the contract is to be settled are a few of the many aspects covered by these conditions.

Conditions of contract of various forms are used in the execution of building works. In Singapore the form used is the Singapore Institute of Architects (SIA) Conditions of Contract for private sector projects and the Public Sector Standard Conditions of Contract (PSSCOC) for public sector projects.

Other conditions of contract are:

(a) FIDIC (International Federation of Consulting Engineers) - widely used international forms of contract for large civil engineering projects.

(b) ICE (Institution of Civil Engineers) - used in large piling and civil engineering contracts

5.2 SIA CONDITIONS OF CONTRACT

The following forms have been issued by the SIA for use in Building Works:

1. Articles and Conditions of Building Contract (Measurement).

2. Articles and Conditions of Building Contract (Lump Sump Contract)

3. Articles and Conditions of Building Contract for Minor Works.

4. Conditions of Sub-Contract for use in conjunction with SIA main building contract.

The Articles and Conditions of Building Contract (Measurement) will be discussed in the following sections. They are grouped under:

i) Power of the Architect and Employerii) Obligations of the Architect and Employeriii) Obligations of the Contractoriv) Dispute

1


5.3 POWER OF THE ARCHITECT and EMPLOYER

5.3.1 DIRECTIONS AND INSTRUCTIONS (Clause 1)

5.3.1.1 Written or Verbal Directions and Instructions (Clause 1.1)The Contractor has to comply with all written Architect’s directions and instructions. If verbal orders are given then:

a) The Contractor can request the Architect to confirm the verbal orders in writing.

b) Such verbal orders are also deemed as written provided:

i) Contractor confirms such orders to the Architect in writing within 14 days of order, and

ii) the Architect does not dissent from or withdraw the order within 14 days from receipt of the Contractor's written confirmation.

However, if the Architect withdraws the order within 14 days from the receipt of written confirmation, the Contractor shall be compensated for any expense reasonably incurred.

5.3.1.2 Clerk-of-Works’ Directions and Instructions (Clause 1.1) A Clerk-of-Works’ directions and instructions have no legal effect unless:

a) confirmed in writing by the Architect, or

b) confirmed by the Contractor to the Architect and if not dissented from in writing within 14 days from receipt of the Contractor's confirmation.

Without such validation, the Contractor may not be entitled to compensation by such compliance.

5.3.1.3 Architect's Directions and Instructions (Clause 1.2)Orders given by the Architect shall be expressed as either Directions or Instructions.

The difference between an Architect's direction and Architect’s instruction is:

An Architect's direction does not entitle the Contractor to additional payment or compensation but may result in reduction in the Contract Sum.

Whereas, an Architect’s instruction can entitle the Contractor to additional payment or compensation but may also result in reduction in the Contract Sum as the case may be.

2


5.3.1.4 Principal Directions (Clause 1.3)Principal directions are issued under the following circumstances:

a) To secure compliance by Contractor with existing contract obligations.

b) To secure reasonably safe and proper methods of working or temporary works.

c) To ensure properly constructed permanent works.

d) To vary permanent work, temporary work or methods of working:

i) at Contractor's request – e.g. to overcome difficulties or avoid excessive costs

ii) as a consequence of defective work or other default or breach of contract.

e) To suspend or postpone work for investigations due to defective work or any other default or breach of contract where insistence upon removal and rebuilding would involve unreasonable expense or delay or prejudice permanent works.

f) To alter a previous direction.

5.3.1.5 Principal Instructions (1.4)Principal instructions are issued under the following circumstances:

a) To vary permanent works where desired by Architect or Employer or required authorities or bye-laws

b) To vary temporary works or methods of working where desired by the Architect or Employer or authorities

c) To suspend or postpone to carry out investigations desired by Architect or Employer which is not at a consequence of any defective work or default of the Contractor.

d) To carry out work/supply goods by Nominated Sub-contractor provided for under the PC Sums or Items

e) To carry out work/supply goods by the Contractor or Nominated Sub-contractor provided for under the Contingency or Provisional Sums or Items

f) To alter or vary any previous instruction

3


5.3.1.6 Classification by Architect not Binding (Clause 1.5)If the Contractor does not agree with the classification of an order as a direction or instruction (written or confirmed in writing) by the Architect, within 28 days from receipt of the order or confirmation he can do the following:

i) Write to the Architect to dispute the classification or

ii) Write to claim extra payment or compensation or

iii) Give notice of arbitration

If the Contractor does not do the above within the 28 days, the Contractor is deemed to have undertaken to comply without increase in Contract Sum.

5.3.1.7 Remedy on Non-compliance by Contractor (Clause 1.7)If the Contractor fails to carry out a direction or instruction, the Architect can issue a written notice to instruct the Contractor to comply.

If the Contractor still fails to comply within 7 days of his notice, the Employer can employ others to do the work and

a) deduct costs from the Contractor based on Architect's "Certificate of Cost of Other Contractor's Work"

b) not deduct costs if the direction is unjustified or should have been an instruction.

5.3.1.8 Compensation to Contractor (Clause 1.8)

If an Architect's written direction or instruction is subsequently shown to be unjustified or not within his power to issue and the Contractor has complied, then the Contractor can claim compensation for costs and extension of time as appropriate.

5.3.2 METHODS OF WORKING & TEMPORARY WORKS (Clause 2)

5.3.2.1 Contractor's Principal Responsibility (Clause 2.1)

Unless specified otherwise, the Contractor has the sole right and responsibility on control of the site, choice of methods of workings and temporary works.

5.3.2.2 Architect's Power to Order Change (Clause 2.2)

The Architect can give directions requiring changes in methods of working and temporary works.

5.3.2.3 Indemnity to Contractor (Clause 2.3)

4


The Employer shall indemnify the Contractor against any accident, loss, damage, etc. which occurs due to methods of working or temporary works ordered by Architect except for those requested by the Contractor or due to Contractor's negligence or default or breach of contract.

5.3.3 PROGRAMME (Clause 4)

5.3.3.1 Submission (Clause 4.1)

The Contractor shall submit a sufficiently detailed programme of the works for approval by the Architect not later than 14 days before the date of commencement of work unless a different submission period is specified elsewhere in the document.

A programme should show:i) a detailed breakdown of the worksii) the sequence of carrying out the works andiii) the period for carrying out each piece of work.

If the Contractor fails to submit in the time stated, the Contractor is not permitted to start work until 14 days after submission even if the contract commencement date has passed with no extension of time.

5.3.3.2 Approval (Clause 4.2)

Approval of the programme by the Architect signifies that the Architect's agreement with the proposed sequence of work. The programme will be used for:

a) Timely supply of outstanding information or details to the Contractor by the Architect

b) Affording the possession of site

During the construction stage, the programme can be used by the Contractor to plan his resources and order materials and be used by the Architect/site staff to monitor the progress on site.

5.3.3.3 Disapproval (Clause 4.3)

If the Architect does not approve the programme, the Contractor shall not be prevented from starting work provided that the programme submitted is sufficiently detailed.

5


5.3.4 ADMINISTRATION (Clause 6)

5.3.4.1 Dismissal of Persons Employed (Clause 6.3)The Architect has the power to instruct the Contractor to remove from site any employee of the Contractor whose continued presence may be reasonably affect the satisfactory and expeditious completion of the Works.

5.3.5 ACCESS FOR ARCHITECT (Clause 9)

The Architect and his representatives (Engineers, COWs) have the right of access to Contractor and Sub-contractors workshops or other places where work is being prepared for the Contract.

5.3.6 QUALITY OF MATERIALS AND WORKMANSHIP (Clause 11)

5.3.6.1 Quality of Work and Materials (Clause 11.1)The Architect shall entitle to give direction to removed materials & goods from site if the Contractor failed to provide information confirming that the materials & goods whether fixed or unfixed comply with the specifications and of good quality.

5.3.6.2 Investigation of Defects (Clause 11.2)The Architect may issue a direction or instruction for the opening up or inspection of any work covered up, or for carrying out tests of any materials or work. If such opening up or inspection or tests are the reasonable consequence of defective work, etc. by the Contractor the Architect may give a direction and the Contractor shall comply with the same at his own cost, but in other cases the Contractor shall be entitled to compensation for any additional expenditure unless defective works are disclosed thereby.

5.3.6.2 Removal of Defective Work (Clause 11.3)The Architect may give directions for the removal of any work or materials which are not in accordance with the Contract.

5.3.6.2 Reduction of Price (Clause 11.3)The Architect may accept any work containing defects, in which event the Contract Sum shall be reduced by any loss of value suffered by the Employer.

6


5.3.7 VARIATIONS AND VALUATION OF ADDITIONAL PAYMENTS (Clause 12)

5.3.7.1 Power to Order and Subsequent Sanction (Clause 12.1)The Architect shall have the power to give directions and instructions requiring a variation to be made to the original Contract work.The variation shall not entitle the Contractor any additional payment or extension of time unless it was due to the negligence or omission or default of the Architect or the Employer or was reasonably carried out in an emergency.The variation may involve a reduction of Contract Sum if any reduced value to the Employer or reduced cost to the Contractor.

5.3.7.2 Definition of Variation (Clause 12.2)The term variation shall mean any change in the original Works described in the Contract Documents. In particular, it shall include:

a) Addition of further work, materials or goods;b) Omission of work, materials or goods;c) Demolition of or removal of work, materials or goods no longer desired by

the Employer or Architect; d) Substitution of different work, materials or goods;e) Changes in the type, standard or quality of work, materials or goods;f) Changes in the plans, elevations, layout or dimensions of the works;g) Changes ordered in the Contractor’s temporary works or methods of

working;h) Changes, omissions or additions ordered to NSC’s work, goods or materials;i) Postponement of any part of the works, desired by the Employer.

5.3.8 EXTENTION OF TIME (Clause 23)

Request for Information (Clause 23.4)If the Contractor notifies the Architect that he is entitle for an extension of time. The Architect may in writing request the Contractor for information and materials that will enable him to estimate the period of extension of time to be granted.

5.3.9 DELAY IN COMPLETION & LIQUIDATED DAMAGES (Clause 24)

5.3.9.1 Delay Certificate (Clause 24.1)The Delay Certificate is issued by the Architect to the Employer whena) the latest date for completion has passed,b) the works remain incomplete andc) there are no other matters for which the Contractor is

entitled to extension of time.

The Delay Certificate is to include:a) the contract completion date (modified or recalculated as appropriate),b) the total period of extension granted (if any),c) the extended contract completion date (if any) andd) certification of non-completion.

7


5.3.9.2 Liquidated Damages (Clause 24.2)

Liquidated damages (LD) shall be a mean of compensating the Employer for any loss which may occur as a result of the Contractor’s failing to complete works on or before the completion date.

The LD starts to run upon the issue of the Delay Certificate if so desired by the Employer. It may be deducted from monies due under the contract up to issue of Final Certificate.

5.3.9.3 Completion (Clause 24.4)

It is the stage of the contract at which in the opinion of the Architect, the works are complete and have been carried out in accordance with the contract document and Architect’s directions and instructions.

The Architect may at his discretion issue the Completion Certificate if any outstanding minor works can be completed without unreasonable disturbance of the Employer’s full enjoyment and occupation. The certificate shall attach a record of such outstanding works for the Contractor to complete within a specified time.

8

LD Amount = ($_____/day for the LD) x period of delay

The rate for the LD should :a) be a reasonable estimate,b) represent damages which the Employer will actually suffer by way of loss

of rental income, increased costs of financing the project, etc. anda) not meant as a penalty.

If the rate for the L D is unrealistically high:a) the courts may set aside the amount stated in the contract andb) decide in favour of a realistic assessment of the damages actually

suffered.


5.3.10 DESIGNATED AND NOMINATED SUB-CONTRACTORS AND SUPPLIERS (Clause 28)

Designated and Nominated Subcontractors are those selected by the Architect on behalf of the Employer but employed by and under the control of the Contractor.

5.3.11 NOMINATION AND RIGHT OF OBJECTION (Clause 29)

After the selection of a Subcontractor/Supplier, the Architect issues a Nomination Instruction to the Contractor. The Contractor will then enter into a subcontract with the selected Subcontractor.

The Contractor has the right to object to a Nomination Instruction on certain grounds:

a) Doubts on the financial standing or technical competence or reliability of the selected Sub-contractor;

b) Sub-contractor who is not prepared to undertake towards the Contractor such obligations and liabilities as will enable the Contractor to discharge his duties to the Employer under the terms of the Contract.

If the Contractor is not obliged to enter into a sub-contract on the above grounds it is open to the Architect to act as follows:

a) Nominate an alternative Sub-contractor.b) Instruct the Contractor himself to carry out the work and/or supply the materials

or goods.c) Instruct the Contractor to enter into the sub-contract in which event the employer

will guarantee the Contractor against any loss incurred by the Contractor arising as a direct result of the matters validly objected by him.

d) Direct the Contractor to enter into a sub-contract and at the same time, among other things relieve the Contractor from the discharge of his obligations and liabilities to the extent the sub-contract terms specified by the Architect are inconsistent with the discharge of the Contract.

9


5.3.12 TERMINATION BY EMPLOYER (Clause 32)

This section deals with termination of the employment of the Contractor under the contract.

5.3.12.1 Termination Without Default (Clause 32.1)a) The Employer may issue Notice of Termination at any time and for

any reason.b) The Contractor is entitled to compensation.c) The Architect has no certifying powers as to amount of

compensation.

5.3.12.2 Termination for Default (Clause 32.2)

a) The Architect is to issue Termination Certificateb) Employer may within one month of receipt of Termination Certificate

give Notice of Termination

5.3.12.3 Grounds of Termination for Default (Clause 32.3)

The Contractor's employment can be terminated on the following grounds:

The Contractora) failed or refused to submit sufficiently detailed

programme or Make-up Prices (1 month).b) assigned principal functions or right to receive monies

without consentc) failed or refused to remove a Subcontractor who has been

objected to from site (1 month)d) suspended work without justification or fail to proceed with diligence (1

month)e) failed to comply with instructions to remove or replace any works/goods (14

days)f) removed plant, goods, materials from site without consent and failed to

return them after notice (14 days)g) complied with an earlier instruction to resume work and again suspended

work or failed to proceed with due diligence.h) failed or refused to comply written directions /instructions (1 month)

5.3.12.4 Termination on Insolvency etc. (Clause 32.7)

Automatic termination when the Contractor becomes a bankrupt or insolvent or any winding up order is made or receiver is appointed, etc. Contractor has to vacate site within 14 days of notice.

10


5.4 OBLIGATIONS OF THE ARCHITECT and EMPLOYER

5.4.1 DESIGN RESPONSIBILITIES (Clause 3)

5.3.3.1 Responsibilities (Clause 3.1)

If the design and specification of the Works is provided by the Architect, the Contractor's responsibility is to complete the Works satisfactorily complying with all requirements. He is not responsible for the design or suitability for the purpose.

However, if the Contract requires some design to be carried out by the Contractor and/or Sub-contractors, the Contractor will be responsible for these designs.

5.3.3.2 Architect to Supply Information (Clause 3.2)

If any additional drawings, details or amendments to the drawings need to be supplied to the Contractor, the Architect has to supply them within a reasonable time taking into account:

a) Contractor's programme which the Architect has approvedb) Actual rate of progress of the Contractorc) Contract Date for Completion or Extended dated) Reasonable pre-planning period for the Contractore) Request from Contractor

For variations, information must be provided to the Contractor within reasonable time.

5.4.2 ADMINISTRATION (Clause 6)

5.4.2.1 Documents (Clauses 6.4 to 6.9)Upon award of contract, the Architect has to issue without charge to the Contractor:

a) One copy of the certified Articles of Agreement, of the Conditions of Contract and of the Contract Documents

b) Two copies of the Specificationc) Two sets of contract drawingsd) Two copies of the unpaired Bills of Quantities and (if requested by the

Contractor) one copy of priced Bills.

During the contract period, if the Architect is required to issue additional information or drawings to the Contractor, two copies are to be issued.

Where two copies of documents are issued the Contractor shall keep on site one copy. These documents must be available to the Architect or his representative for reference at all times.

11


When all outstanding matters between Employer and Contractor are settled, all drawings, details, etc. bearing Architect's name should be returned to the Architect if requested and similarly the breakdown of makeup prices to the Contractor. The information is to be use for the contract only.

5.4.3 STATUTORY OBLIGATIONS (Clause 7)

Fees and Charges (7.2)The Contractor may also be compensated for any fees, charges or other expenditure incurred as a result of any statutory obligations which may have been allowed in the contract document unless otherwise specified in the documents.

5.4.4 SETTING OUT (Clause 8)

The Architect shall furnish to the Contractor with accurate dimensioned drawings such information as shall enable the Contractor to set out the Works. Any errors arising from inaccurate setting out by the Contractor shall be amended at his own cost.

5.4.5 POSSESSION OF SITE AND COMMENCEMENT OF WORK

5.4.5.1 Time of Commencement (Clause 10.1)Commencement Date is normally stipulated in the Appendix. If this date should become invalid for some reasons, then the Commencement Date will be that agreed to by both parties. This revision in Commencement Date will need to be formalised by the issue of "Certificate of Revised Commencement Date" by the Architect.

5.4.5.2 Possession of Site (Clause 10.2)Unless otherwise stated, the Contractor is entitled to on the Commencement Date:a) free and uninterrupted possession of site as definedb) any special access stated in the Appendix

If no special access is mentioned then the Contractor has to obtain his own access.

5.4.6 EXTENSION OF TIME (Clause 23)

The Contractor shall be entitled to extension of time under relevant grounds. He is required to give written notice to the Architect of the material circumstances. Including the causes of the delay, upon it becoming reasonably apparent that the progress of the works is being or is likely to be delayed for one or more grounds listed in this clause.

If the Architect is of the opinion that any of the grounds stated by the Contractor is a relevant ground and that completion of the works is likely to be delayed beyond the completion date, he shall in writing to the Contractor give an extension of time.

Examples of relevant grounds are:

12


a) Force Majeure – being an act of God.b) Exceptionally adverse weather conditions as distinct from normal weather

condition.c) Loss or damage from fire, storm, lightning, high winds, earthquake, etc.d) War, hostilities, insurgency, terrorism, civil commotion or riots.e) Industrial action by workmen, strikes, lock-outs or embargoes affecting any of

the trades employed upon the works, etc.f) Architect’s Instructions, such as to vary permanent work; to postpone or suspend

work to carry out investigations not through the fault of the Contractor but desired by the Architect; to comply with statutory requirements, etc.

g) Architect’s instructions in relation to P.C. or Provisional Sums items.h) Architect’s instruction in regard to Contingency Sums.i) Failure of the Employer to afford possession of site to the Contractor.j) Architect’s delay in supplying necessary drawings, instructions within a

reasonable time.k) Acts of omissions of other contractors engaged by the Employer.l) Shortage of labour or materials resulting from government action.m) Any act of prevention or breach of contract by the Employer.

5.4.8 PAYMENT OF CONTRACTOR AND INTERIM CERTIFICATES (Clause 31)

The Contractor shall be entitled to progress payment for the Work carried out. The Contractor shall serve on the Employer a payment claim based on periodic valuation.

Within 14 days after receipt of payment claim, the Architect shall issue an Interim Certificate for payment to Contractor.

Within 21 days after the payment claim is served on the Employer by the contractor, the Employer shall respond to the payment claim, a payment response to the Contractor who shall be entitled to payment of any sum stated.

The Contractor will be paid progress payment on the date immediately upon the expiry of 35 days after the date the tax invoice is submitted to the Employer or the date on which the payment response is required.

Before the end of the Maintenance Period the Contractor is to submit the Final Claims Documents. The submission shall contain details of:

- Quantities- Rates- Prices- Any adjustment to Contract Sum - Additional payment or compensation claimed

13


Together with:- Explanations - Supporting vouchers- Documents- Calculations- Documents relating to accounts of

Designated/Nominated Subcontractors

The Architect is to issue the Final Certificate within 3 months of receipt of Final Claim Documents or Maintenance Certificate whichever is later.

5.4.90 TERMINATION BY CONTRACTOR (Clause 33)

Grounds (Clause 33.1)The Contractor can terminate the employment when:

a) Employer fails to employ a successor Architect or Quantity Surveyor within 14 days of notice

b) Employer interferes improperly or fraudulently or obstructs the issue of a certificate or fraudulent collusion between Architect and Employer.

e) Employer becomes bankrupt, etc.

5.5 OBLIGATIONS OF THE CONTRACTOR

5.5.1 DESIGN AND COMPLETION RESPONSIBILITIES (Clause 3)

5.5.1.1 Responsibilities (Clause 3.1)

If the design and specification of the Works is provided by the Architect, the Contractor's responsibility is to complete the Works satisfactorily complying with all requirements. He is not responsible for the design or suitability for the purpose.

However, if the Contract requires some design to be carried out by the Contractor and/or Sub-contractors, the Contractor will be responsible for these designs.

5.5.5.2 Care of Works (Clause 3.3)

Contractor has to make good at his own cost any accidental or other loss or damage or theft unless such damage is due to any act or neglect of the Employer or Architect. Where it is due to acts of the Employer or Architect, Architect will issue appropriate instruction and give extension of time if due.

14


5.5.2 STATUTORY OBLIGATIONS (Clause 7)

5.5.2.1 Bye-Laws and Regulations (Clause 7.1)

The Contractor shall comply with any regulation or bye-law of any Government authority having jurisdiction with regard to the Works.

If any variation is required, the Contractor has to inform the Architect in writing giving details and reasons for the variation. The Architect should then issue a direction or instruction as the case may be.

If the Contractor does not receive any direction or instruction after seven days of his notice, he can proceed with the works as required by the authority. If any variation is in the parts designed by the Architect or Engineers (not by the Contractor or Sub-contractor or is due to negligence or breach of contract of the Contractor or Sub-contractor) then a variation is in order with extension of time if appropriate.

5.5.3 DISCREPANCY OR DIVERGENCE (Clause 14)If there is any discrepancy between required work and the Contract Document, the following applies:

a) The Contractor is to inform the Architect of any such discrepancy.b) If it can be resolved by interpretation of the Contract Document, then the

Architect may issue direction or instruction as appropriate.c) If there is total ambiguity that cannot be resolved, the Architect shall issue an

instruction. In this instance, the Contract sum may be increased or decreased with extension of time given if appropriate.

5.5.4 ASSIGNMENT AND SUB-CONTRACTING (Clause 15)5.5.4.1 Assignment by Contractor (Clause 15.1)Contractor shall not assign to others nor shall receivers and liquidators be entitled to carry out their functions without prior consent of the Employer with regards to the following:a) Principal functions of controlling site, his staff, co-ordination of

Subcontractors, ordering of materials.b) Right to receive monies due under the Contract.

5.5.4.2 Sub-contractors (Clause 15. 2) If a Contractor wants to engage a sub-contractor which is not provided for in the Contract, he must obtain the consent of the Architect. The Architect shall not withhold consent if sub-contractor is suitably qualified for the relevant works

5.5.4.3 Responsibility of Sub-contractors (Clause 15.3)Unless otherwise stated in the contract, the Contractor shall be responsible for the actions and works of all sub-contractors (designated or nominated).

5.5.5 PLANT AND MATERIALS (Clause 16)

15


All plant, temporary buildings and materials brought onto the Site by the Contractor shall, until completion of the Works, be deemed to be the property of the Employer and shall not be removed without the consent in writing of the Architect.

5.5.6 INDEMNITIES TO EMPLOYER (Clause 18)Contractor is liable for and shall indemnify the Employer against damage, expense, liability, loss, claim or proceedings in respect of the following:a) Personal Injuriesb) Property

5.5.7 INSURANCE AGAINST INJURY TO PERSONS AND PROPERTY ANDWORKMEN'S COMPENSATION (Clause 19)The Contractor and Subcontractors are to maintain insurances to cover liability in respect of personal injuries or death and injury or damage to property.

5.5.8 INSURANCE OF WORKS (Clause 20)Risks to Be Insured (Clause 20.1)Apart from the Public Liability and Workmen Compensation insurances, the Contractor has also to take insurance for:a) All completed worksb) All properly protected unfixed goods and materials on site

5.5.9 DUE DILIGENCE BY CONTRACTOR (Clause 21)Following commencement of work the Contractor shall proceed with the Works diligently and with due expedition at all times until completion.

5.5.10 TIME FOR COMPLETION (Clause 22)The Contractor is to complete works on or before:a) Date of completion orb) Modified date of completion

5.5.11 MAINTENANCE FOLLOWING COMPLETION (Clause 27)

5.3.24.1 Maintenance Period (Clause 27.1)The Maintenance Period is stated in the Appendix (normally 12 months).It commences upon issue of "Completion Certificate".

5.3.24.2 Maintenance Certificate (Clause 27.5)The Architect issues the Maintenance Certificate when the Contractor has completed all the defects notified to him.

5.5.12 PAYMENT OF NOMINATED SUB-CONTRACTORS AND SUPPLIERS

16


(Clause 30)

5.3.27.1 Certification and Payment (Clause 30.1 & 30.2)Interim Certificate:Interim certificates are issued by the Architect to the Employer and must indicate the amount due to the Contractor including amounts due to the Subcontractors. The certificate must also state separately the amounts due to each Nominated/Designated Subcontractor/Supplier.

The Contractor must pay Nominated Subcontractor/Supplier within 14 days of receipt of payment from the Employer.

5.5.12 Certificate of Non-Payment/Payment Direct (Clause 30.3 & 30.4)If the Contractor fails to make payment to any Designated/Nominated Subcontractor the Architect may issue a "Certificate of Non-Payment" of amount due but not paid to Subcontractor.

Upon the receipt of the "Certificate of Non-Payment", the Employer may pay some or all of any sums certified directly to Subcontractor.

5.6 DISPUTE

5.6.1 ARBITRATION (Clause 37)Any dispute between the Employer and the Contractor shall be referred for arbitration and final decision of a person to be agreed by the parties.

5.6.2 MEDIATION CLAUSE (Clause 38)Upon the agreement of both the Employer and the Contractor, they may be referred their dispute for mediation under the Mediation Rules of the SIA.

17