Discrepancies in Payment Certificate No.1 issued on 28th December xxxx
Our Ref: xxx
Date:
To
xxx Contracting LLC
P. O. Box xxx
Dubai, U.A.E.
Attention : Mr. xxx, Group Procurement Manager
Project : xxx Phase 2
Subject : Discrepancies in Payment Certificate No.1 issued on 28th December xxxx
Dear Sir,
With reference to the subject mentioned above, we acknowledge the receipt of the Payment Certificate No. 1 (PC#1) against the work done for the month of October-xxxx, and we would like to raise our observations on the delay in certification, short certification, deduction and discrepancies that are captured in this PC as per the below:
Payment Application date & Short Certification.
M/s xxx (Contractor Name) has submitted the Interim Payment Application (IPA) for the work done in the month of October xxxx on 20th October xxxx, however your PC#1 shows IPA submission date as 11th Nov xxxx which is totally wrong.
Furthermore, our IPA was submitted for the amount of AED xxx, while the certified work is amounting AED xxx only which is a short certification by an amount of AED xxx. This flagrant short certification is unjustifiable and is totally rejected as it has no basis.
All the pods that are claimed in our IPA were delivered to site and installed and therefore must obtain full certification.
Therefore you are kindly requested to correct the certification accordingly.
Other Deductions: We observed other deductions of AED xxx in the captioned PC#1 due to NCR. This is totally rejected as No NCR was received in October xxxx.
You are requested to correct the PC by excluding this deduction.
Error in calculation of UAE VAT: We also observe error in calculation of VAT in the captioned PC#1. As general practice advance payment, retentions (not due) and deductions if any are deducted /adjusted while calculating UAE VAT, however your office had only adjusted advance payment against certified works which is not in line with the general practice and will also impact future invoicing when M/s xxx (Contractor Name) will claim retentions.
You are requested to correct the PC by rectifying the VAT amount.
Advance Payment: We again would like to remind you that M/s xxx (Contractor Name) has submitted the Advance Payment Guarantee & Performance Guarantee to your office on 21st Oct xxxx but you have failed to release the advance payment till now which is overdue by 55 days.
At the same time, your team have recovered advance against the progress works in PC#1 without paying the advance which is wrong and not acceptable.
You are requested to correct the PC by excluding the advance payment recovery until the advance payment is being made.
Delay in Work Certification: As per Subcontract agreement, BGC should sign LC documents within 15 days from the date of IPA, which implies that BGC is obliged to issue payment certificate within 15 days from the date of submission of IPA to enable M/s xxx (Contractor Name) to submit Tax Invoice & Commercial documents to claim settlement under LC. Accordingly, this PC#1 is overdue since 4th Nov xxxx (15 days from date of submission of IPA) and BGC is in default on issuing Payment Certificate by 55 days.
We reserve our rights for an Extension of Time (EOT) equivalent to the same number of days by which our advance payment is now delayed (55 days) in addition to the delays occurring in progress payments certification and release.
We look forward to receive the corrected PC duly stamped and signed by the Authorized person from your office to enable us to submit TAX invoice along with LC documents for your acceptance.
All rights reserved.
Yours faithfully,
On behalf of xxx LLC
xxx
project Manager