If a Contractor submits an Application for Payment late (for example, 6 days after the Due Date for Payment), is it just a case of extending all other ‘payment milestones’ such as the Payment Notice and Final Date for Payment by the equivalent number of days that it was submitted late (in this example, 6 days)? I assume it isn’t a case of treating the late Application for Payment as an early Application for Payment for the next month?
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Tim, from the way you have phrased it, I assuming that
- you are a Project Manager
- the contract is an ECC contract with the standard option Y(UK)2 amendments made to comply with the Housing Grants, Construction & Regeneration Act (1996) as amended by the Local Democracy, Economic Development & Contraction Contract (2009)
- you haven’t given the Contractor a certificate for the amount due / notice of payment.
If these assumptions are wrong, please say.
Under the Acts, there is an obligation on the Employer or their agent to certify the amound due regardless of whether the Contractor submits an application or not. Given my assumption that you have not made that assessment, if the payment is made late i.e. after the Final Date for Payment which runs from the date due, then under the middle sentence of clause 51.2, the Contractor will be entitled to interest on that late payment.
So if my assumptions are true and I was you, then I would turn round that certificate / payment notice fast (which make include stating deductions and reasons why from the Contractor’s application) before the start of the prescribed period and get on to the Employer’s accounts department to turn the payment over fast before the Final Date for Payment !
Do get back to me if any of my assumptions are wrong or you want clarification.