Discrepancy in Payment Certificates and Notice of Delay in release of LC Documents
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 : Discrepancy in Payment Certificates and Notice of Delay in release of LC Documents
References : a) xxx dated 5th January xxxx
b) xxx dated 27th January xxxx
c) xxx dated 22nd February xxxx
Dear Sir,
We are writing following the receipt of the Draft Payment Certificate related to the IPA#3 for the month of December xxxx via Email on 23rd February xxxx (Appendix A) and would like to record the following:
- IPA#3 for month of December
In accordance with the terms of our Subcontract Clause 16.3, the certification and L/C document shall be released within 15 days from the date of our IPA.
We have submitted our IPA for the month of December on 20 December xxxx, the due date for releasing certification and L/C documents is 04 January xxxx. You have delayed issuance of certification by 49 days and have failed till this day to issue L/C documents related to this IPA, there is now a 58 day delay in the release of LC documents for IPA#3.
We further record that the payment certificate issued on 23 February xxxx is again unsigned and shows an error in the noted date of our IPA submission. The dated written on the certificate is 26 December xxxx while the correct date on which our IPA# 3 was submitted is 20 December xxxx.
Furthermore, your draft certificate above for works performed up to December includes a short certification of an arbitrary amount of AED xxxx.
This is both completely unreasonable and unjustified since all the pods are already installed in their final location, and even if there is any comment on any particular item within some of the PODS, it is totally unjustifiable to short certify a value amounting to almost half of our contract.
Furthermore, you have still maintaining the arbitrary deduction of AED xxx without any justification or supporting documentation in clear breach of the terms of our Subcontract agreement.
Delayed Signing of LC documents for October and November certificates:
In addition to the above, you are deliberately delaying the signing of LC documents for October and November works which have already been excessively delayed in being certified. We refer to previous letters on this subject and remind you the following:
- IPA#1 for month of October
IPA#01 for the month of October was submitted to you on 20 October xxxx. Certification and release of LC documents was due 15 days after IPA in accordance with Clause 16.3 of our subcontract. Therefore the due date was 04 November xxxx.
After multiple reminders and letters, you have only released to us signed LC documents on 25 February xxxx and we were appalled to find that you have post-dated these L/C documents which have been signed with a date of 31 March xxxx.
This effectively means that you are again pushing the payment by another 34 days (in addition to unilaterally setting up an LC of 150 days) which will result in an actual payment date for IPA#1 of 28 August xxxx instead of the contractual payment date of 17 February xxxx as stipulated in our Subcontract.
We remind you that our payment terms are 120 days from the date of our IPA (Refer to Clause 16.3 of our subcontract)
Your deliberate actions to defer our due payments are blatantly obvious and are directly resulting in a delay of 192 days in settlement of our payment.
This is a flagrant and inacceptable unilateral change to the agreed payment terms.
- IPA#2 for month of November
IPA#02 for the month of November was submitted to you on 20 November xxxx. Certification and release of LC documents was due 15 days after IPA in accordance with Clause 16.3 of our subcontract. Therefore the due date for certification and release of LC documents was 05 December xxxx.
We record that you have till this dated failed to provide us with the signed LC documents for November xxxx, even though we have submitted our tax invoice.
In closing:
BGC is systematically: 1) delaying certification 2) arbitrarily and without justification imposing short certification and deductions 3) intentionally delaying signing L/C documents and even 4) postdating such documents, all in an effort to defer, delay, and reduce due payments to M/s xxx (Client Name).
We remind you that we have fully financed the project and have invested the full amount of the contract, while at the same time you have failed to release our advance payment in accordance with the terms of our Subcontract, and you are now employing every means and measure to delay the release of due progress payments.
The financial damage you have caused and are still causing M/s xxx (Client Name) is leaving us with no other options than to submit Tax invoice based on arbitrary and short certified amounts you are indicating on your unsigned and unsubstantiated draft payment certificate documents in the hopes of securing at least some form of payment, and in contrast you are signing postdated L/C documents to further defer due payments in complete disregards to your contractual and legal obligations.
We also remind you that issuance of our Tax invoices does not infer an acceptance by M/s xxx (Client Name) on short-certified amounts or on the arbitrary deductions included therein, nor should it be considered as an acceptance on the part of M/s xxx (Client Name) on the change in payment terms that BGC is implementing in the issuance of LC and in the release of L/C documents which are in direct breach of our Subcontract Agreement. Accordingly, M/s xxx (Client Name) will not be liable for any delay to the works caused by your actions above. Such delays are on account of BGC acts.
We again reserve our rights for an Extension of Time (EOT) equivalent to the same number of days by which our advance payment is delayed in addition to the delays occurring in progress payments certification as listed above. We further reserve our rights to claim for any and all damages resulting from your direct actions and your recurring evidenced bad faith in the execution of the Sub-Contract Agreement.
All rights are reserved.
Yours faithfully,
On behalf of xxx LLC
xxx
project Manager