(a) if any thing supplied or work done by the Contractor is not in accordance with the Contract, the cost of rectification or replacement may be withheld until rectification or replacement has been completed; and/or
(b) if the Contractor was or is failing to perform any work or obligation in accordance with the Contract, and had been so notified by the Engineer, the value of this work or obligation may be withheld until the work or obligation has been performed. The Engineer may in any Payment Certificate make any correction or modification that should properly be made to any previous Payment Certificate. A Payment Certificate shall not be deemed to indicate the Engineer's acceptance, approval, consent or satisfaction.
The Contractor is to be notified of the payment which he is to receive, without being requested to amend his Statement. Such a request would typically be inconsistent with the procedures for payment specified that the Engineer's certificates shall not be unreasonably withheld or delayed and that, when sending a certificate to one Party, the Engineer shall send a copy of the certificate to the other Party.
The Contractor is to be notified within 28 days after his Statement and supporting documents have been received. These supporting documents are required to include the progress report for the relevant period. In other words, a Statement covering work executed up to the end of a month must be accompanied (or preceded) by reports which include the matters listed in P&DB, the Contractor receives a copy of an Interim Payment Certificate which notifies him of the payment to which he is entitled, as fairly determined by the Engineer. The Employer is thereafter bound by the Certificate, and must make payment in full, irrespective of any entitlement to compensation arising from any claim which the Employer may have against the Contractor. If the Employer considers himself entitled to claim against the Contractor, notice and particulars must first be submitted.
The Employer's entitlement is then to be agreed or determined, and incorporated as a deduction in a Payment Certificate. This procedure, as prescribed in notice, particulars, and agreement or determination, may require less time than the 28 days mentioned in the first paragraph of EPCT, the Employer gives "notice of any items in the Statement with which the Employer disagrees, with supporting particulars". This notice should allow the Contractor to calculate the payment which he will receive.
However, the EPCT does not refer to the notice in terms of defining the payment to which the Contractor is entitled under the Contract, because it would be unreasonable to empower either Party to define this entitlement. Under EPCT, the Employer's obligation is stated as being to pay the amount which "is due irrespective of the Employer's notice or P&DB, the Engineer may decline to issue an Interim Payment Certificate in an amount which would be less than a "minimum amount of Interim Payment Certificates" which may be stated in the Appendix to Tender.
However, the Engineer should not regard his duty as being to endeavor to minimize certification, and therefore declining to certify whenever he is entitled to do so. Withholding of certification may be of benefit to neither Party. The EPCT describe the only other circumstances when certification and/or payment may be withheld. Although the Retention Money retained may be sufficient to cover these circumstances, the withholding described in the sub-paragraphs are not subject to the amount of Retention Money retained. Certification and payment may be withheld. as well as:
(a) describes the situation when an item of work is not in accordance with the Contract, in which event the cost of rectification or replacement may be deducted. In effect, this withholding entitlement expresses the reality that the "contract value" of the item, It is typically the value prescribed by the Contract less the anticipated cost of making it comply with the Contract. If an item of work is so non-compliant that its contract value is zero, there would typically be no payment due and therefore nothing from which a deduction for withholding may be effected. Similarly covers a failure to perform any work or obligation in accordance with the Contract. Under CONS or P&DB, the final paragraph allows an Interim Payment Certificate to be corrected or modified in any subsequent Payment Certificate. Although the title mentions Interim Payment Certificates, expands the provision to allowing the correction or modification to be made in the Final Payment Certificate. Whilst it could be argued that the provision could be expanded further, to the effect that the Final Payment Certificate could be corrected or modified, such a misinterpretation would be inconsistent. Concludes with a sentence confirming that certification or payment is not to be taken as indicating "acceptance, approval, consent or satisfaction". This sentence is required so as to discourage:
- the Employer from withholding an interim payment if he feels entitled to withhold acceptance, approval, consent or satisfaction; and
- the Contractor from relying upon
certificates or payments as evidence of acceptance, approval, consent or
satisfaction in respect of paid work.
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