Payment Applications

The bane of any Contractor or Subcontractor is getting paid.

One has to have undertaken work to begin with - in accordance with the Contract - before one can expect to receive anything, however, to receive, one must first ask.

Whilst a process may be determined from reading the Contract, it needs to be established between the Parties' counterparts as to how this is achieved.

For example, saying that payment for an item will be made upon "completion" of said item can be interpreted very differently between the Parties.

One may presume this means physical "installation" the other may mean it to entail installation, testing, commissioning, certification etc.

So, it is better to go the "hard yards" at the beginning of the Project and establish the step-by-step process required by the other side before certification.

If this means collating dockets and the like, then do so, but also find out how these are to be presented - their format - to the other Party (i.e., find out from the other Party what they will/will not accept), formally acknowledge it and then adopt it.

So many times, especially on Projects with numerous payment periods to come, there is a tendency for the Contractor applying to say to themselves, they will adopt a more streamlined methodology next time, only to relish having made the application successfully, await payment, and forget to prepare for the next application period.

Rinse-wash-repeat.

Unfortunately, whilst rinse-wash-repeat is a good idea in itself, repeating a known methodology over-and-over again, causing undue stress and pressure especially when knowing that time needs to be taken to address the issue once and for all so that going forward, the pressure is eased but such time is never taken to implement same, is a very bad idea.

Look for simple fixes and/or wins when preparing and also note, in most cases, interim payments are, by definition provisional, and can be corrected very easily at the next interim application.

Whilst not advocating that not everything need be checked and re-checked before submission (also with the use of ones peers so that glaring mistakes are not overlooked), one shouldn't get stifled into thinking that the mould has been set and errors/anomalies cannot be changed.

The process can be fluid even though one should aim for as homogenous a process as one can arrive at quickly and early but also one which can be changed out if/when the needs arise without jeopardy to the process of payment itself.