ABSTRACT
Payments from Owner to Contractor: Payments take place as per the Invoicing Procedure. Contractor submits advance bank guarantee and Performance bank guarantee to get its first advance payment and progress payment respectively. A Monthly Progress payment has two components of sum: one for the achievement of payment milestone and the other for physical progress measured. In general, 25% of Contract Price is put under Milestone and 75% under physical progress. Progress is measured based on approved WBS.
Payments from Contractor to Vendor: As work progress is sometimes impacted by poor cash flow, the payment to Vendor should be based on a fair breakdown. A widely accepted payment breakdown is as follows: 10% on PO issuance, 20% on the evidence of sub-orders issuance, 20% on receipt of sub-ordered materials, 40% on delivery to Site, and 10% on Close out.
