App D - Payment Procedures.pdf

SECTION 012900- PAYMENT PROCEDURES

PART 1 - GENERAL

1.1 RELATED DOCUMENTS

A. Drawings and general provisions of the Contract, including General and Supplementary Conditions and other Division 01 Specification Sections, apply to this Section.

1.2 SUMMARY

A. This Section specifies administrative and procedural requirements governing the Contractor's Applications for Payment, including preparation and submittal of a Schedule of Values.

1.3 SCHEDULE OF VALUES

A. Coordinate preparation of the Schedule of Values with preparation of the Contractor's Detailed Trade Schedule.

B. Correlate line items in the Schedule of Values with other required administrative schedules and forms, including:

1. Construction Schedule.

2. Application for Payment form.

3. List of subcontractors.

4. Schedule of allowances.

5. Schedule of alternates.

6. List of products.

7. List of principal suppliers and fabricators.

8. Schedule of Submittals.

C. Submit a Preliminary Schedule of Values for review by the Owner's Representative within fourteen (14) days after issue of the Notice to Proceed.

Meet with the Owner's Representative to review and make any requested revisions to the Preliminary schedule of values.

D. Submit a final Schedule of Values, approved by the Owner's Representative, within twenty one (21) days after issue of the Notice to Proceed, but in no case later than seven (7) days before the date scheduled for submittal of the initial Application for Payment.

E. Sub-schedules: Where the Work is separated into phases that require separately phased payments, provide sub-schedules showing values correlated with each phase of payment.

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F. Format and Content: The Schedule of Values shall be submitted to the Owner's Representative on standard AIA Documents G702 Application for Payment I

G703 Continuation Sheet. Note: These forms are AIA copyrighted and must be purchased from AIA. See aia.org for additional information.

1. Identification: Include the following Project identification on the Schedule of Values:

a. Project name and location.

b. Name of the Owner's Representative and Engineer.

c. Bid, Contract and Project numbers.

d. Contractor's name and address.

e. Date of submittal.

f. Billing Period.

2. Arrange the Schedule of Values in a tabular form with separate columns to indicate the following for each item listed:

a. Generic name.

b. Related Specification Section.

c. Name of subcontractor.

d. Name of manufacturer or fabricator.

e. Name of supplier.

f. Change Orders (numbers) that have affected value.

g. Dollar Value.

h. Percentage of Contract Sum to the nearest one hundredth percent, adjusted to total 100 percent.

3. Provide a breakdown of the Contract Sum in sufficient detail to facilitate continued evaluation of Applications for Payment and progress reports.

Break principal sub-contract amounts down into several line items; in particular, but not limited to incorporated materials, labor, and indirect cost.

4. Round amounts off to the nearest whole dollar; the total shall equal the Contract Sum.

5. For each part of the Work where an Application for Payment may include materials or equipment, purchased or fabricated and stored, but not yet installed, provide separate line items on the Schedule of Values for initial cost of the materials, for each subsequent stage of completion, and for total installed value of that part of the Work.

G. Unit Cost Allowances: Show line item value of unit cost allowances as a product of unit cost times measured quantity as estimated from the best indication in the Contract Documents.

H. Margins of Cost: Show line items for indirect costs, and margins on actual costs, only to the extent that such items will be listed individually in Applications for Payment. Each item in the Schedule of Values and Applications for Payment shall be complete including its total cost and proportionate share of general overhead and profit margin.

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1. Temporary facilities and other major cost items that are not direct cost of actual Work in place will be shown as separate line items in the Schedule of Values only at the sole discretion of the Owner's Representative.

I. Schedule Updating: Update and resubmit the Schedule of Values when Change Orders or Work Directive Changes result in a Owner approved change in the Contract Price. Work Directive Changes shall not be included in Applications for Payment until the respective modification in Contract Sum has been included in an executed Change Order.

1.4 APPLICATIONS FOR PAYMENT

A. Each Application for Payment shall be consistent with previous applications and payments as certified by the Owner's Representative and paid for by the Owner.

1. The initial Application for Payment, the Application for Payment at time of Substantial Completion, and the final Application for Payment involve additional requirements.

B. Payment Application Times: The monthly cut-off date for each Contract will be defined by the Owner's Representative and must be followed by the Contractor throughout the course of construction. The period of construction Work covered by each Application for Payment is the Work completed as of the date of application.

C. Payment Application Forms: Payment Applications shall be submitted to the Owner's Representative only on the "AIA copyright forms" G702/G703.

D. Application Preparation: Complete every entry on the form, and execute by person authorized to sign legal documents on behalf of the Contractor.

Incomplete applications will be returned without action.

1. Entries shall match data on the Schedule of Values.

2. Include amounts of Change Orders (but not Construction Change

Directive) issued prior to the last day of the construction period covered by the application.

E. Transmittal: Submit 6 executed copies of each Application for Payment to the Owner's Representative by means ensuring receipt within twenty-four (24) hours; including waivers of lien and similar attachments, as specified in the Contract Documents or required by the Owner's Representative.

1. Transmit each copy with a transmittal form listing attachments, and recording appropriate information related to the application in a manner acceptable to the Owner's Representative.

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F. Conditional/Unconditional Waivers and Releases: With each Application for Payment, submit a Waiver and Release form from every entity who may lawfully be entitled to file a Stop Notice arising out of the Contract, and related to the Work covered by the Application for Payment.

1. Submit a "Conditional Waiver and Release Upon Progress Payment" on each item for the amount requested in the current application, prior to deduction for retainage. Submit an "Unconditional Waiver and Release Upon Progress Payment" on each item for the amount paid in the previous application, prior to deduction for retainage.

2. When an application shows completion of an item, submit a "Conditional Waiver and Release Upon Final Payment" for that item.

3. Within ten (1 O) days of receipt of the Owner's payment that includes the final payment of an item, submit an "Unconditional Waiver and Release Upon Final Payment" for that item.

4. The Owner reserves the right to designate which entities involved in the Work must submit such waivers.

5. Waiver Forms: Submit Conditional and Unconditional waivers of lien forms.

G. Initial Application for Payment: Administrative actions and submittals that must precede or coincide with submittal of the first Application for Payment include the following:

1. List of principal suppliers and fabricators.

2. Approved Schedule of Values.

3. Contractor's Detailed Trade Schedule.

4. Schedule of principal products.

5. Schedule of unit prices.

6. Submittal Schedule.

7. Copies of all permits required by Contractor for the Work.

8. Copies of authorizations and licenses from governing authorities for performance of the Work.

9. Certificates of Insurance and Insurance Policies.

10. Performance and Payment Bonds.

11. Any further data required by the Owner for insurance or other purposes.

12. Initial settlement survey and damage report, if required.

13. Application for Payment.

14. Conditional Waiver and Release Upon Progress Payment.

15. Waiver and Releases from subcontractors, if requested by the Owner.

H. Application for Progress Payments: Once the initial payment process has been made, additional progress payment applications should include:

1. Application for Payment.

2. Updated Schedule of Values.

3. Conditional Waiver and Release for current progress payment.

4. Unconditional Waiver and Release for prior progress payments.

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5. Waiver and Releases from subcontractors, if requested by the Owner.

I. Application for Payment at Substantial Completion: Following issuance of the Certificate of Substantial Completion, submit an Application for Payment; this application shall reflect any Certificates of Partial Substantial Completion issued previously for Owner occupancy of designated portions of the Work.

Administrative actions and submittals that shall precede or coincide with this application include:

1. Warranties and maintenance agreements.

2. Test records and as-builts.

3. Meter readings (if required).

4. Advice on shifting insurance coverages.

5. Operation and Maintenance Manuals.

6. List of incomplete Work, recognized as exceptions to Engineer's

Certificate of Substantial Completion.

7. Application for Payment.

8. Updated Schedule of Values.

9. Conditional Waiver and Release for current progress payment.

10. Unconditional Waiver and Release for prior progress payment.

11. Waiver and Releases from subcontractors, if requested by the Owner.

II. Final Payment Application: Administrative actions and submittals which must precede or coincide with submittal of the final Application for Payment include the following:

1. Completion of Project closeout requirements.

2. Completion of items specified for completion after Substantial Completion.

3. Assurance that unsettled claims will be settled.

4. Transmittal of required Project construction records to Owner.

5. Proof that taxes, fees and similar obligations have been paid.

6. Removal of temporary facilities and services.

7. Removal of surplus materials, rubbish and similar elements.

8. Final Application for Payment

9. Final updated Schedule of Values

10. Conditional Waiver and Release for final payment

11. Unconditional Waiver and Release for prior progress payments

12. Waiver and Releases from subcontractors, if requested by the Owner

13. Guarantee form

14. DVBE documentation

15. Owner sign-off for return of keys.

III. Certified Payroll Records: All Certified Payroll Records for the period for which a payment is requested must be received by the Labor Compliance Officer prior to approval of the Application for Payment.

IV. The Architect and Owner's Representative will review and sign the payment application and forward it to the Owner, indicating they have reviewed the

01 29 00 - 5 application and recommend payment in the amount specified. These reviews by the Owner's consultants are for the quality and quantity of work in place and its compliance with the Contract Documents and codes. Inspector shall verify As built drawings prior to payment application is approved.

M. The Owner will process the application for payment in a timely manner.

Payment will normally be made within thirty (30) calendar days of the Owner's receipt of the Contractor's approvable Application for Payment approved by the Architect and Owner's Representative.

N. Payment for materials and equipment delivered to the project site but not yet incorporated in the Work may be made at the discretion of the Owner. Such materials and equipment must be stored at the project site, properly stacked, crated or boxed and, if necessary, covered or protected from the weather.

Documentation of cost of the materials and equipment must be provided with the Application for Payment. Payment for stored materials or equipment will be made in compliance with General Conditions.

0. The cut-off dates for progress payments during the course of construction will be specified by the Owner's Representative. If the cut-off date occurs on a weekend/holiday, the next business day will be considered as the cut-off date.

The Contractor must follow the established cut-off date to ensure the timely processing of its payments.

P. Delay in processing of payment applications will occur when the above procedures are not followed.

PART 2 - PRODUCTS (Not Used)

PART 3 - EXECUTION (Not Used)

END OF SECTION

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