Payment terms and retention provision issue with subcontractor M/S xxx Interior Design and Construction LLC.

Date: 10^th March 2020

Ref.: xxx/1001/AEC/019/2020

Total Pages: 1

To,

M/s. xxx Architects &Engineers

P.O. Box: xxx, Dubai, UAE.

Phone: +971 xxx

Attention        :           Mr.  xxx – Architect

Project           :           Proposed G+1 Villa On plot No. xxx at Al Barsha South

            Second, Dubai – U.A.E for Mr. xxx

Subject            : Payment terms and retention provision issue with subcontractor M/S xxx Interior Design and Construction LLC.

Dear Sir,

With reference to the abovementioned subject, we would like to inform you that the M/S xxx Interior Design and Construction LLC responded their disagreement with our following standard payment terms and retention provision which design mitigate the risk of their performance during site works and DLP. MCM

Payment Terms:

20% Advance against security cheque upon signing subcontractor agreement. (10% advances will recover from each certified invoice)

1. 10% Upon Shop drawing and Materials Approval as 10 days PDC from the date of Invoice Certification.   
2. 20% Upon materials at site as 10 Days PDC from the date of invoice certification.
3. 50% Upon fixing of door leaf, counter, wardrobes etc, as 10 Days PDC from the date of invoice certification.
4. 20% Upon installation ironmongers as 10 Days PDC from the date of invoice certification.

Retention:

1. 10% retention of the total Agreement value shall be made from each Progressive invoice.
2. On successful completion of all contractual obligations (satisfaction to the Project manager/Consultant and Client) and handing over of the original Warranty Certificate, operation Manuals and other documentation 5 % of Retention value shall be paid by way of 30-days PDC. 
3. Balance payment 5% of Retention shall be released after Defect Liability Period (DLP) of One Year from the date of Taking Over of Project by the Client.
4.  

Monolith Interior Design and Construction LLC proposed for 50% advance 40% upon door leaf installation and 10% upon installation of ironmongeries without provision of 5% retention.

This is for your information and advice.

Thank You

Yours Sincerely,

Xxx Building Contracting LLC