2.a. budgeting and payment procedures for all other types of contracts

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Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım

Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey

This project is co-financed by the European Union and the Republic of Turkey

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A. Budgeting and Payment Procedures for Global Price Service, FWC,

Supply and Works contracts

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Global Price Service Payments (1)

Pre-financing: Maximum 60% of the contract value •Within 45 days from the date of invoice/request of payment

Required Documents: • Signed contract • Request for payment• Financial guarantee (for the full amount of the pre-

financing payment) if the pre-financing amount exceeds €150 000, the guarantee remains valid until the final payment has been made

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Global Price Service Payments (2)

Balance Payment: Maximum 40% of the contract value if pre-financing payment has been made (Art. 3

Special Conditions) •Within 45 days of approval of the final progress report by the end recipient and the Contracting Authority and receipt of all relevant documents (invoice/request, etc.) Required Documents:

• Final progress report approved by end recipient and Contracting Authority

• Final invoice/request• Final statement

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Framework (fee based) Payments (FWC)(1)

Fee based Service Contracts Under 200.000 Euros up to 199.999 Euros!!

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Pre-financing:Maximum 60% of the contract value

•Within 45 days from the date of invoice/request of payment

Required Documents:

• Invoice/Request for advance• Signed/initialled Financial offer• Initialled Specific ToRs and methodology (if any)• Financial guarantee if the amount of the advance is

higher than € 150 000

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Interim Payments

In principle no interim payments are foreseen. However, if requested by the Framework Contractor, an interim payment may be foreseen if there is an extension of at least 6 months

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Interim payments (incase of an addendum)As per the contract’s addendum

•Within 45 days of receipt of the invoice/request •Required Documents

• Countersigned addendum to the contract• Invoice/Request for interim• Signed/initialled Financial offer• Initialled Specific ToRs• Financial guarantee if amount of payment is higher

than € 150 000

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Balance Payment : Up to 40% of the contract value, if an advance pre-financing payment has been made.

•Within 45 days of receipt of the invoice/request

Required Documents:•Invoice/Request for final payment•Supporting documents for invoiced costs (Original supporting documents for fee-based contracts)•Copies of or extracts from timesheets•Copy of the approved final report•End recipient certificate (“good for payment” granted by the recipient).

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Budgeting and cost estimation for works and supplies contracts

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Phases of cost estimation

Phase Purpose1. Planning Determine Project Feasibility

Compare Alternatives and conceptual design

Costs benchmarks and Comparison costs similar projects

2. Preliminary Design Refine conceptual designDraft Bill of Quantities (BoQ)

3. Final technical design Refine Bill of Quantities (BoQ)Compare to Contract Bids

Get most realistic and accurate estimates in the planning phase

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Example Bill of Quantities

Preparatory WorksTemporary Construction SiteEstablishing, operation and removal of workingsite facilities

Lump sum

1 50.000,00 50.000,00

Monitoring WellEstablishment of monitoring and control wells each 75 m deep

Nos. 4 5.000,00 20.000,00

Drilling of wells including well casing m 300 90,00 27.000,00

Survey of the wells for documentationLump sum

1 5.000,00 5.000,00

Fences and GatesFences

Fence, including concrete base, reinforcement steel, supply and installation of fence and posts

m 7.000 35,80 250.600,00

Gates

Including supply and installation of Electronically controlled bottom rolling door with a height of 1.70 m height, made of steel construction.

Nos. 1 5.000,00 5.000,00

Sum to transfer to summary, main items, 2-Preparatory Works 357.600,00

Civil Works

Topsoil: Excavation and transportation of top soil. m³ 42.000 0,30 12.600,00

Excavation: Excavation and transportation of sand. m³ 1.337.901 1,10 1.471.691,10

Filling: Transportation and placing the material. m³ 210.748 1,10 231.822,80

Storage of excess materials: m³ 1.127.153 0,30 338.145,90

Level survey for documentationLump sum

1 5.000,00 5.000,00

Sum to transfer to summary, main items, 3-Civil Works 2.059.259,80

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Investment cost breakdown

Capex EUR IPA

Є Є Є eligible

Capex items 2009 2010 2011 costs

Construction Works Landfill 0 5.465.597 2.342.399 7.807.995

Rehabilitation of the Existing Dumpsites 0 1.564.478 1.564.478 3.128.957

Supply of Mobile Equipments 0 869.000 0 869.000

Transfer Stations 0 1.677.280 0 1.677.280

Pilot Composting 0 397.122 0 397.122

Mechanical Recyling Facilities 0 1.457.500 0 1.457.500

Civic Amenity Centers 0 228.624 0 228.624

Collection Containers 0 811.322 0 811.322

Technical Assistance 237.820 713.460 237.820 1.189.100

Decomissioning 0 0 289.645 289.645

Total 0 237.820 13.184.383 4.434.342 17.856.544

Cumulative 2009-2030 21.427.853

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Supply Payments- PRAG (1)

Pre-financing: Maximum 60% of the contract price against provision of the performance guarantee (kati teminat mektubu) up to %10 of the contractprice

•Within 45 days from the date on which an admissible payment request is registered by the competent department specified in the Special Conditions. The payment request shall not be admissible if one or more essential requirements are not met.

•If the pre-financing payment exceeds € 150 000, the Contractor must provide a financial guarantee for the full amount of the pre-financing payment. Financial guarantee must remain valid until it is released 45 days at the latest after the provisional acceptance of the goods (geçici kabul)

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Supply Payments- PRAG (2)

Requested Documents:•Invoice/request for payment•Original of signed contract•Original of performance guarantee (for the amount specified in the contract, in any case no more than 10% of the amount of the contract price).•Original of pre-financing guarantee for the full pre-financing amount, if applicable•Copy of insurance policy if required (see Special conditions, article 12)

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Balance Payment: 40% of the contract price following provisional acceptance and/or final acceptance of the supplies.

•Where only part of the supplies have been delivered, the 40% payment shall be calculated on the value of the supplies which have actually been accepted and the guarantee shall be released accordingly

•45 days from the date on which an admissible payment request is registered by the competent department specified in the Special Conditions. The payment request shall not be admissible if one or more essential requirements are not met.

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Supply Payments- PRAG (4)• Required Documents

• Invoice• Provisional and/or final acceptance certificate• Original guarantees• Originals of certificates of origin of the

supplies• Copy of inspection test certificate( if

applicable)(teftiş raporu)• Copy of warranty (if applicable)(üretim firması

garantisi)

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This project is co-financed by the European Union and the Republic of Turkey Supply Payments- PRAG (5)

VERY IMPORTANT-Rule of Origin! •All goods supplied must satisfy the rule that they originate in EITHER a member state OR in one of the beneficiary countries as stated in the invitation to tender•The supplier shall present an official Certificate of Origin on provisional acceptance. Failure to comply with this obligation shall lead rejection of the payment for items

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This project is co-financed by the European Union and the Republic of Turkey Supply Payments- PRAG (6)

Non Performance Penalty:

If the Supplier fails under his own responsibility to deliver any or all of the goods within time limit specified in the contract, the Contracting Authority shall, without formal notice be entitled for every day which shall elapse between the expiry of the implementation period and actual date of completition, to liquidated damages equal to 5/1000 of the value of the undelivered supplies to a maximum of %15 of the total value of the contract. If the non-delivery of any of the goods prevents the normal use of the supplies as a whole, the liquidated danages shall be calculated on the basis of the total contract value.

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Pre-financing :Varies per individual contract. Shall be stated in the Special conditions, yet total amount of pre-financing, shall not exceed:•10% of the original contract price for the lump-sum advance referred to in Art. 44.1(a) of GC [lump sum advance enabling the Contractor to meet expenditure resulting from the commencement of the contract]•20% of the contract price for all the other pre- financing referred to in Article 44.1(b) of GC [if the Contractor affords proof of the conclusion of a contract for the purchase or order of materials, plant, equipment, machines and tools necessary for the execution of the contract, and of any other substantial prior expenses such as the acquisition of patents or study costs.]

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Works Payments – FIDIC (2) Required Documents•Invoice/request for payment•Original of signed contract•Performance guarantee which shall be valid and enforceable until the Contractor has executed and completed the Works and remedied any defects •Original of pre-financing guarantee for the full pre-financing amount. The guarantee shall be valid and enforceable until the pre-financing has been completely repaid by the Contractor out of interim payments under the contract.•Copy of insurance required as stated in art. 14 of GC and/or in the Special conditions - Within 45 days of receipt of the request for payment and all relevant documents

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Works Payments – FIDIC (3)

Interim Payments: Varies per individual contract Required Documents•Contractor’s Invoice •Performance Guarantee (if no Advance payment)•Interim Payment Certificate (IPC) issued by the Engineer determining the amount which the Engineer fairly determines to be due, based on Contractor’s Interim Statement together with supporting documents, including report on progress during this month•Originals of certificates of origin of the goods and materials used•Copy of inspection test certificate if applicable•Original of provisional or partial provisional acceptance certificate

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This project is co-financed by the European Union and the Republic of Turkey Works Payments – FIDIC (4)

Within 45 days of receipt of the request for payment and all

relevant documents

NOTES:

The interim payment certificates may include corrections or

modifications to any previous certificate.

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This project is co-financed by the European Union and the Republic of Turkey Works Payments – FIDIC (5)

Balance Payment : varies per individual contract

• Within 45 days of receipt of the request for payment and all relevant documents

DOCUMENTS REQUIRED ARE IMPORTANT!

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Required Documents:

1.Invoice/request for final payment 2.Contractor’s Final Statement3. Final Payment Certificate issued by the Engineer, based on Contractor’s draft final statement together with the supporting documents4.Copy of the Performance Certificate issued by the Engineer to the Contractor on completion of the Contractor’s obligations under the Contract (within 28 days after the latest of the expiry dates of the Defects Notification Periods, or as soon thereafter as the Contractor has supplied all the Contractor’s Documents and completed and tested all the Works, including remedying any defects)5.Copy of inspection test certificate if applicable6.Original Retention guarantee, if applicable

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TYPICAL SEQUENCE OF PAYMENT EVENTS FIDIC

Contractor submits statement to Engineer

Engineer issues Interim Payment Certificate

Employer makes the payment to the Contractor

<28d

<56d

Engineer verifies the statement, Contractor submits information

<28d <56d

INTERIM

PAYMENTS

FINAL

PAYMENT

Contractor submits draft final statement to Engineer

Contractor submits Final Statement and the discharge

Engineer issues Final Payment Certificate

Employer makes payment

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SUMMARY FIDIC RULES OF PAYMENT

Advance Payment (Contractor)•Submits Performance Guarantee to the Employer within 28 days from receiving Letter of Acceptance (or signing of Contract)

•Submits Advance Payment Guarantee

•Submits Application for Interim Payment Certificate No. 1 (advance payment)

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Advance Payment (Engineer)•Receives copies and checks appropriateness of Performance Guarante and Advance Payment Guarantee

•Issues Interim Payment Certificate No. 1 (advance payment)

•The Employer receives and approves Performance Guarantee & informs the Engineer accordingly,

•Effects payment of Interim Payment Certificate No.1 (advance payment)

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Interim Payment CertificatesThe Contractor submits Application for Interim Payment Certificate to the Engineer with all supporting particulars, as specified in the Contract.

The Engineer scrutinises with due diligence and issues Interim Payment Certificate within 28 days, or notifies the Contractor about possible defects as soon as practical.

The Employer reviews and effects payment within 56 days (from the date when the Engineer received the application) as certified or notifies the Engineer about possible defects as soon as practical.

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Final Payment

Within 56 days after receiving the Performance Certificate the Contractor submits to the Engineer six copies of a draft final statement with supporting documents showing in detail:

• The value of all work done in accordance with the Contract

• Any further sums which the Contractor considers to be due under the Contract or otherwise.

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• The Contractor submits to the Engineer such further information as the Engineer may reasonably require and makes the changes to the draft as may be agreed with them.

• The Contractor prepares and submits to the Engineer the final statement as agreed. This agreed statement is referred to as the “Final Account”.

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SUMMARY FIDIC RULES OFPAYMENT

Final Payment Certificate:

Within 28 days after receiving the Final Statement and written discharge the Engineer issues

to the Employer the Final Payment Certificate, which shall state:

The amount which is finally due

After giving credit to the Employer for all amounts previously paid and all sums to which

the Employer is entitled, the balance due from the Employer to the Contractor or the

Contractor to the Employer, as the case may be

The Employer pays the Contractor the amount certified in the Final Payment Certificate within

56 days after the Employer receives the certificate

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Thank you!

2.a. budgeting and payment procedures for all other types of contracts

Documents

european union

payments fwc4interim

payments fwc5balance

final payment

advance prefinancing

payments fwc2prefinancing

payments fwc1fee

payment procedures