Notice of default in progress payment and short certification

Our Ref:  xxx

Date: xxx

To                           : xxx Contracting LLC

                                  P.O. Box xxx

  Dubai, U. A. E.

Attention            : Mr. xxx

Project                 : xxx at Jumeirah First, Dubai

Subject                 : Notice of default in progress payment and short certification

Dear Mr. Bahaa,

We are writing to put on record that BHC has been short certifying our Interim Payment Application and is in blatant default on (Contractor Name) progress payments. Your company has failed to certify and settle our progress payments as per our Sub-Contract Agreement payment terms.

1. Short Certification of Work Done:

In IPA 1 (November 19) to IPA 4 (February 20):

• Pods installed with approved IRs were arbitrarily short certified to only 90% of the value instead of 100%.
• Pods installed with rejected IRs were not certified at all due to a single material which is marble. We must stress that the marble is a specified supplier which (Contractor Name) has no control over and rejecting the entire pod simply for the marble issue is unreasonable.

In IPA 5 (March 20):

• By the time of this certification, all the 680 pods were delivered to site.
• 574 pods were installed and had approved IRs, but only 545 pods were certified, and 29 pods were left out.
• The balance 106 pods delivered were not certified at all. These 106 pods were either delivered but not yet installed due to the site not being ready or installed but IRs were mainly rejected due to the single marble which is unreasonable as stated above.
• The above has caused a short certification for work done amounting AED xxx

• Short Certification of Variations:
• In December xxx, an evaluation for the variation was issued from xxx and considered a variation sum of AED xxx. This sum was based on the quantity of each pod type which has changed as per the below table:

• Due to the changes (addition/removal) of pod types as per above, the new variation sum increased to AED xxx
• Up to IPA 05: the certifications for the variations were still taking into consideration the amount of AED xxx related to the old pod quantities/type which is incorrect.
• In addition to that, the variation certification is taking into consideration only pods with approved IRs and unreasonably leaving out completed and delivered pods. The current value approved for variation is only AED xxx out of an anticipated AED xxx
• Due to the above, again the variation works is having a short certification of AED xxx.

We are extremely concerned that the total short certification as of this date is more than AED 2 Million while all pods have been completed and delivered to site for more than one month, and all are currently installed.

• Default of progress payment:

Our Interim Payment Application No. IPA 4 amounting AED xxx was due for payment on 13 Apr 20 and remains unsettled.

• Default in payment is 49 days.

Our Interim Payment Application No. IPA5 amounting AED xxx was due for payment on 12 May 20 and remains unsettled.

• Default in payment is 29 days.

We request that you settle without further delay our due payments and recover all un-contractual short certifications in the next Interim Payment Application No. IPA6 which is currently under review.

(Contractor Name) can no longer accept any short certification or delay in payment under the current conditions where all pods have been installed. We reserve our rights to claim any and all costs or loss of profit associated with your unjustified retentions, and your default of payment.

This is for your information and your urgent action

Yours faithfully,

On behalf of xxx LLC

xxx

Projects Manager