GUIDE TO COMPLETION, VALUATION, CERTIFICATION AND PAYMENT

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EXPLANATORY NOTES AND INSTRUCTIONS

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Introduction

This composite and updated guide includes earlier publications by the JBCC® as a desktop reference manual for
consultants and contractors alike. This guide seeks to simplify the tendering for and the administration of building
agreements and to avoid/minimise disagreements arising from poor contract administration - in the interests of
standardisation of documentation and good practice in the building industry.

The JBCC® accepts no liability for loss, damage or expense incurred as a result of information provided in good faith in this
guide

How this document is structured

Definitions: This is a composite collection of definitions used in the three JBCC® Agreements. There may be minor
variations in some definitions as the wording, for example, in the Principal Building Agreement may not
totally match that in the Minor Works Agreement albeit the intent is the same
Contract Data: The 2014 edition of JBCC® Agreements introduced a single ‘contract data’ to be completed by the
principal agent to invite tenders, and to be completed by the contractor as the form of tender / offer
Completed ‘contract data for the Principal Building Agreement, (similar for the N/S Subcontract Agreement and the Minor
Works Agreement) are included to illustrate how these forms must be used
Completed ‘agreement’ form on appointment of a (sub)contractor = the last page of each of the agreements, signed by
the parties as a record of the project data for the Principal Building Agreement, (similar for the N/S Subcontract Agreement
and the Minor Works Agreement)
Completed ‘waiver of the contractor’s lien’ and ‘certificate of site possession” forms follow
The ‘completion’ process is described in five stages with completed certificates of interim, practical and final completion
of the works as a whole or in sections. The concept of ‘latent liability’ of the contractor is explained in detail
Aspects of the ‘payment’ process are described in notes and illustrated with completed payment and related certificates
supplemented by the calculation of interest and the administration of the various ‘securities’
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©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
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1. DEFINITIONS
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Only key definitions used in JBCC® agreements are repeated for ease of reference; - there may be minor

!
differences in wording

A word or phrase in bold type in a JBCC® Agreement or this Guide shall have the meaning assigned to it in these

! definitions. A word or phrase not in bold type shall be interpreted in the context of its usage

Numbers, generally preceded by “in terms of”, indicate references to clause numbers [0.0] in that document
Headings of clauses are for reference purposes only and shall not be used in the interpretation of such
clauses
ADJUSTMENT AMOUNT: The amount calculated in terms of the applicable adjustment formula using the tax

!
exclusive method – applicable in the CPAP guide

AGENT: The entity dealing with specific aspects of the works appointed by the employer or delegated by the
principal agent

AGREEMENT: The JBCC® Principal Building Agreement, the JBCC® Nominated/Selected Subcontract
Agreement or the JBCC® Minor Works Agreement and the respective completed JBCC® contract data, or the

!
corresponding JBCC® Public Sector Agreements and the respective completed JBCC® contract data

! BASE MONTH: The calendar month during which tenders closed – applicable in the CPAP guide

BILLS OF QUANTITIES: The document drawn up in accordance with the measuring system [CD]

BUDGETARY ALLOWANCE: An amount included in the contract sum for work intended for execution by the

! contractor, the extent of which is identified but not detailed

BUDGETARY ALLOWANCE: An amount included in the n/s subcontract sum for work intended for execution

!
by the subcontractor the extent of which is identified but not detailed

CALENDAR DAYS: Twenty four (24) hour days commencing at midnight (00:00) which include Saturdays,

! Sundays, proclaimed public holidays and recorded annual builders’ holiday periods [CD]

CERTIFICATE of FINAL COMPLETION: A certificate issued by the principal agent to the contractor with a
copy to the employer stating the date on which final completion of the works, or of a section thereof, was

!
achieved

CERTIFICATE of INTERIM COMPLETION: A certificate issued by the contractor to the subcontractor stating

!
the date on which interim completion of the n/s subcontract works, or a section thereof, was achieved

CERTIFICATE of PRACTICAL COMPLETION: A certificate issued by the principal agent to the contractor with
a copy to the employer stating the date on which practical completion of the works, or of a section thereof,

!
was achieved

CONSTRUCTION EQUIPMENT: Equipment and/or plant provided by or belonging to the contractor and/or the

!
subcontractor used during the construction period

CONSTRUCTION INFORMATION: All information issued by the principal agent and/or agents including the
contract documents, specifications, drawings, schedules, notices and contract instructions required for the

!
execution of the works

CONSTRUCTION PERIOD: The period commencing on the intended date [CD] of possession of the site by the

!
contractor and ending on the date of practical completion (Private Sector Agreement only)

CONSTRUCTION PERIOD: The period commencing on the date of the letter of appointment to the contractor

!
and ending on the date of practical completion (Public Sector Agreement only)

!
CONTRACT DATA: The document listing the contract variables

! [CD]: The notation used where project specific information is recorded in the contract data

CONTRACT DOCUMENTS: This agreement, the contract drawings, the priced document and other identified

!
documents [CD]

CONTRACT DRAWINGS: The drawings listed on which the accepted tender or the negotiated amount was

!
based [CD]

CONTRACT INSTRUCTION: A written instruction issued by or under the authority of the principal agent to the
contractor, which may include drawings and other construction information

CONTRACT MINUTES: A comprehensive set of minutes prepared by the principal agent in which all pertinent
contractual information that arises at meetings is progressively recorded (defined in MWA, applicable to all
agreements)
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CONTRACT PRICE ADJUSTMENT: Provision used for the adjustment of the contract value [CD] (using

!
information published monthly by Statistics South Africa)

CONTRACT SUM: The accepted tender amount, inclusive of tax, that is not subject to adjustment [CD]
! CONTRACT VALUE: A monetary value initially equal to the contract sum that is subject to adjustment in terms
of the agreement

CONTRACTOR: The party [CD] contracting with the employer for the execution of the works (PBA + MWA only)

CONTRACTOR: The party contracting with the subcontractor for the execution of n/s subcontract works [CD]

!
(NSSA only)

CONTRACTUAL DATE FOR COMPLETION: The actual date for practical completion of the works or any
revision of the initial contractual date for practical completion in terms of the agreement, whichever occurs first,

!
provided that if no revision is granted, it shall mean the initial contractual completion date (used in CPAP guide)

CPAP: The Contract Price Adjustment Provisions used for the adjustment of fluctuations in the cost of labour,

!
plant, materials and goods that are required to construct the works (used in CPAP guide)

DAMAGES: Proven financial loss claimed or awarded to compensate the contractor where the subcontractor

!
has not completed the subcontract works in accordance with the contract documents

DEFECT: Any aspect of materials and workmanship forming part of the works that does not conform to the

!
contract documents

DEFECT: Any aspect of materials and workmanship forming part of the n/s subcontract works that does not

! conform to the n/s subcontract documents

DIRECT CONTRACTOR: An entity appointed under separate agreement by the employer to do work on site

! prior to practical completion [CD]

! EMPLOYER: The party [CD] contracting with the contractor for the execution of the works

FINAL ACCOUNT: The document prepared by the principal agent that reflects the final contract value of the

!
works at final completion or termination

FINAL COMPLETION: The stage of completion of the works as certified by the principal agent as being free of

! defects

FINAL PAYMENT CERTIFICATE: The certificate issued by the principal agent after the issue of the certificate

! of final completion after the final account has been agreed, or deemed to have been agreed

!
FORCE MAJEURE: An exceptional event or circumstance that:

(a) could not have been reasonably foreseen

(b) is beyond the control of the parties, and

!
(c) could not reasonably have been avoided or overcome

Such an event may include but is not limited to:

• Acts of war (declared or not), invasion, and hostile acts of foreign enemies
• Insurrection, rebellion, revolution, military or usurped power, war (whether declared or not), terrorism
• Civil commotion, disorder, riots, strike, lockout by persons other than the contractor’s employees or his
subcontractors
• Sonic shock waves caused by aircraft or other aerial devices, and ionising or radioactive contamination
• Explosive materials, except where attributable to the contractor’s use of such technology

! • Natural catastrophes including earthquakes, floods, hurricanes, or volcanic activity

FREE ISSUE: Materials and goods provided at no cost to the contractor and/or the subcontractor by the

!
employer for inclusion in the works whether stored on or off the site or in transit [CD]

GUARANTEE for ADVANCE PAYMENT: A security in terms of the JBCC® Security for Advance Payment form

! obtained by the contractor from an institution approved by the employer [CD]

GUARANTEE for DEPOSIT: A security in terms of the JBCC® Security for Deposit form obtained by the

!
contractor from an institution approved by the employer [CD] (used in the MWA only)

GUARANTEE for CONSTRUCTION: A security in terms of the JBCC® Security for Construction form obtained

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by the contractor from an institution approved by the employer [CD]

GUARANTEE for PAYMENT: A security in terms of the JBCC® Security for Payment form obtained by the
employer from an institution approved by the contractor [CD]

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INDEX: A work group index published in a Stats SA Statistical Release P0151 or any index calculated from a

!
selected set of sub-indices (used in the CPAP guide)

INTEREST: The bank rate applicable from time to time to registered banks borrowing money from the Central or
Reserve Bank of the country [CD]. The ruling bank rate on the first calendar day of each month shall be used in

!
calculating the interest due for such month (Private Sector Agreements)

!
Or …

!
INTEREST: The interest rate in terms of legislation applicable to organs of state (Public Sector Agreements)

INTERIM COMPLETION: The state of completion where the n/s subcontract works, or a section thereof, is

! substantially complete as certified by the contractor (JBCC® Nominated/Selected Subcontract Agreement)

! JBCC®: The Joint Building Contracts Committee® NPC

LATENT DEFECT: A defect that a reasonable inspection of the (n/s subcontract) works by the principal agent

! and/or agents would not have revealed

! LAW: The law of the country [CD]

LIST for COMPLETION: A list issued by the principal agent where practical completion has been certified,

!
listing defects and/or outstanding work to be completed

LIST for FINAL COMPLETION: An updated list for completion issued by the principal agent after the
inspection of the works for final completion, where final completion has not been achieved, listing defects
and/or outstanding work to be completed to achieve final completion

LIST for INTERIM COMPLETION: A list issued by the contractor after the inspection of the n/s subcontract
works for interim completion, where interim completion has not been certified, listing outstanding work and/or
defects to be completed to achieve interim completion (JBCC® Nominated/Selected Subcontract Agreement)

LIST for PRACTICAL COMPLETION: A comprehensive and conclusive list issued by the principal agent after
the inspection of the works for practical completion, where practical completion has not been achieved, listing

! the defects and/or outstanding work to be completed to achieve practical completion

MATERIALS AND GOODS: Unfixed materials, goods and/or items fabricated for inclusion in the works whether

!
stored on or off the site or in transit

MORA INTEREST: The rate of interest payable prescribed in law from time to time [CD] where performance,

! which is due and enforceable, has not been paid on or before a determined date

NOTICE: A communication issued by either party, the principal agent and/or agents to the other party or any
agent to, inter alia, record an event, request for outstanding information and/or where suspension and/or

!
resumption of the (n/s subcontract) works, or termination of the agreement is contemplated

N/S SUBCONTRACT AGREEMENT: The JBCC® Nominated/Selected Subcontract Agreement and the
completed JBCC® contract data, between the contractor and the subcontractor used in conjunction with the

! JBCC® Principal Building Agreement

N/S SUBCONTRACT BILLS OF QUANTITIES: The document drawn up in accordance with the measuring

! system [CD] showing the make-up of the n/s subcontract sum

N/S SUBCONTRACT CONSTRUCTION INFORMATION: All information issued by the principal agent and or
agents including specifications, drawings, notices and contractor’s instructions required for the execution of

!
the n/s subcontract works

N/S SUBCONTRACT CONSTRUCTION PERIOD: The period commencing on the intended date [CD] of access

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to the site according to the programme and ending on the date of interim completion

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N/S SUBCONTRACT DATA: The document listing the subcontract variables

N/S SUBCONTRACT DOCUMENTS: This n/s subcontract agreement, the n/s subcontract drawings, the n/s

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subcontract priced document and other identified documents [CD]

N/S SUBCONTRACT DRAWINGS: The drawings listed on which the tender is based [CD]

N/S SUBCONTRACT FINAL ACCOUNT: The document, prepared by the principal agent, which reflects the

! final n/s subcontract value of the n/s subcontract works at final completion or termination

N/S SUBCONTRACT PAYMENT ADVICE: A document issued at regular intervals [CD] by the contractor stating
the amount due and payable by the contractor to the subcontractor or vice versa using the JBCC ® N/S

! Subcontract Payment Advice format

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N/S SUBCONTRACT PAYMENT NOTIFICATION: A document issued with each payment certificate by the
principal agent stating the amount due and payable by the contractor to the subcontractor or vice versa using
the JBCC® N/S Subcontract Payment Notification format

N/S SUBCONTRACT PRICED DOCUMENT: N/S subcontract bills of quantities, schedule of rates or other

! documents appropriate to this n/s subcontract agreement [CD]

N/S SUBCONTRACT PROGRAMME: A diagrammatic representation of the planned execution of units of work or
activities indicating the dates for commencement and completion as prepared by the subcontractor in conformity

! with the contractor’s programme

N/S SUBCONTRACT RECOVERY STATEMENT: The statement prepared at regular intervals by the contractor

!
using the JBCC® N/S Subcontract Recovery Statement format

N/S SUBCONTRACT GUARANTEE for ADVANCE PAYMENT: A security in terms of the JBCC® Security for

! Advance Payment form obtained by the subcontractor from an institution approved by the employer [CD]

N/S SUBCONTRACT GUARANTEE for CONSTRUCTION: A security in terms of the JBCC® Security for

! Construction form obtained by the subcontractor from an institution approved by the contractor [CD]

N/S SUBCONTRACT GUARANTEE for PAYMENT: A security in terms of the JBCC® Security for Payment form
obtained by the contractor from an institution approved by the subcontractor [CD]

! N/S SUBCONTRACT SUM: The accepted tender amount, inclusive of tax, that is not subject to adjustment [CD]

N/S SUBCONTRACT VALUE: A monetary value initially equal to the n/s subcontract sum and that is subject to

! adjustment in terms of this n/s subcontract agreement

N/S SUBCONTRACT WORKS: The extent of work to be executed by the subcontractor described in the n/s
subcontract documents and contractor’s instructions, which includes free issue, and materials and goods.
Work or installations to be executed by direct contractors and others responsible to the employer are excluded

! [CD]

PARTY: The employer or the contractor and “parties” shall refer to both of them

!
PARTY: The contractor or the subcontractor and “parties” shall refer to both of them

PAYMENT CERTIFICATE: A certificate issued at regular agreed intervals [CD] by the principal agent to the

!
parties certifying the amount due and payable in terms of the JBCC® Payment Certificate format

PENALTY: The stipulated amount per calendar day [CD] payable by the contractor to the employer where the

! date or the revised date for practical completion, whichever is the later, has not been met

PRACTICAL COMPLETION: The stage of completion as certified by the principal agent where the works or a
section thereof has been completed free of patent defects other than minor defects identified in the list for

!
completion and can be used for the intended purpose [CD]

PRELIMINARIES: The priced items listed in the preliminaries document with any additions, alterations or

!
modifications thereof incorporated in the (n/s subcontract) contract documents

PRICED DOCUMENT: Bills of quantities, schedule of rates or other documents appropriate to this agreement
[CD]

PRIME COST AMOUNT: An amount included in the (n/s subcontract) contract sum for the delivered cost of

! materials and goods obtained from a supplier as instructed by the principal agent

PRINCIPAL AGENT: The entity [CD] appointed by the employer with full authority and obligation to act in terms
of this agreement

PROGRAMME: A diagrammatic representation of the planned execution of units of work or activities indicating
the dates for commencement and completion prepared and maintained by the contractor

PROGRAMME: A diagrammatic representation by the contractor of the planned execution of units of work or
activities by the contractor and subcontractors indicating the dates for commencement and completion

PROVISIONAL SUM: An amount included in the contract sum for the supply and installation of work by a

!
subcontractor

RECOVERY STATEMENT: The statement prepared and issued in conjunction with each payment certificate by

!
the principal agent in terms of the JBCC® Recovery Statement format

RETENTION: The security selected by the contractor as a payment reduction from the value certified in a

!
payment certificate

RETURNABLES: Documents listed [CD] to be provided by the tenderer on notice from the employer
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!
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SCHEDULE: The listed variables applicable to the preliminaries

SECTION: An identified portion of the works for which practical completion is required by a date earlier than

! that required for the works as a whole [CD]

SECURITY: A monetary guarantee provided by the employer to the contractor, or the contractor to the
employer in terms of this agreement [CD] from which either party may recover expense and loss in the event of

! default

SECURITY: A monetary guarantee provided by the contractor to the subcontractor, or the subcontractor to
the contractor in terms of this agreement [CD] from which either party may recover expense and loss in the

!
event of default

SHOP DRAWINGS: Drawings, diagrams, designs, illustrations, schedules, performance charts, brochures,
setting out drawings, shop details and other data which are prepared by the contractor, subcontractor,
manufacturer, supplier or distributor which illustrate manufacturing details and methods of execution of work

!
(used in the ASAQS Preliminaries)

!
SITE: The land or place where the works is to be executed [CD]

!
STATS SA: Statistics South Africa as the provider of the indices used for CPAP (used in the CPAP guide)

STATUS REPORT: A report compiled by the principal agent and/or agents in the event of termination of the
agreement, or where the works has been suspended due to a force majeure event, or in the event of
termination of the n/s subcontract agreement by the contractor, to record the state of completion or otherwise
of the works or the n/s subcontract works, as the case may be. Such status report may include marked up
drawings and photographs

SUBCONTRACTOR: A nominated or a selected subcontractor appointed in terms of the n/s subcontract

agreement by the contractor in accordance with a contract instruction for the supply and installation of work

!
for which a provisional sum has been included in the contract sum [CD]

!
SUSPENSION: The temporary cessation of the (n/s subcontract) works by the contractor (subcontractor)

!
TAX: Value-added tax or any other tax, duty or levy applicable by law

VALUATION PERIOD: The contractual period between two payment certificates or the period from

! acceptance of tender up to the first payment certificate issued (used in the CPAP guide)

!
WORK COMPLETED IN TIME: The work value executed up to the contractual date for completion, and …

WORK COMPLETED LATE: The work value executed after the contractual date for completion (used in the

! CPAP guide)

WORK GROUP: A “grouping” of work descriptions that are more commonly undertaken by a particular
recognised “tradesman”, or that is generally recognised in the construction industry as sharing common
characteristics, and for which an index is available, or is determined by a means that is acceptable to both the

!
employer and contractor (used in the CPAP guide)

WORK VALUE: The value of work executed that qualifies for adjustment in terms of these provisions – (used in

!
the CPAP guide)

WORKING DAYS: Calendar days which exclude Saturdays, Sundays, proclaimed public holidays and recorded
annual builders’ holiday periods [CD]

WORKS: The extent of work to be executed by the contractor described in the contract documents and
contract instructions, which includes free issue, and materials and goods. Work or installations to be
executed by direct contractors and others responsible to the employer are excluded [CD]
!
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CONTRACT DATA
used in conjunction with the

JBCC® Principal Building Agreement

Edition 6.1 - published March 2014

Preface
JBCC® Constituents
The Joint Building Contracts Committee® NPC (JBCC®) is representative of building owners and developers, professional
consultants and general and specialist contractors who contribute their knowledge and experiences to the compilation of
JBCC® documents. JBCC® documents portray the consensus view of the constituent members and are published in the
interests of standardisation and good practice with an equitable distribution of contractual risk. The constituents are:

Association of Construction Project Managers

Association of South African Quantity Surveyors
Consulting Engineers South Africa
Master Builders South Africa
South African Black Technical and Allied Careers Organisation
South African Institute of Architects
South African Property Owners Association
Specialist Engineering Contractors Committee

Application of JBCC® Contract Documents

The definitions contained in the JBCC® Principal Building Agreement apply to this document. A word or phrase in bold type
in the text shall bear the meaning assigned to it in the definitions of such Agreement. Where a word or phrase is not in bold
type it shall bear the meaning consistent with the context of its use

This contract data contains unique requirements applicable to the project and variables referred to in the JBCC® Principal
Building Agreement. The information provided in this document by the principal agent is complete and accurate at the time of
calling for tenders. Where additional information becomes available, all tenderers will be informed in writing. Reference to
clause numbers in the JBCC® Principal Building Agreement are shown in [square brackets] in this contract data eg [3.2.1].
Spaces requiring information must be filled in, or marked as ‘not applicable’ but not left blank. This contract data, when
completed and submitted by the contractor, becomes the form of tender. Where the contractor is appointed, the contract
documents comprise the signed JBCC® Principal Building Agreement, this completed contract data, the priced document,
drawings and other listed documents

Warning
The JBCC® Principal Building Agreement, the JBCC® Nominated / Selected Subcontract Agreement and respective
Contract Data Edition 6.1 have been coordinated with JBCC® Certificates and other support documents. Forms from
previous editions are not compatible with Edition 6.1

© Copyright Reserved
The name ‘Joint Building Contracts Committee®’, the abbreviation JBCC®, the product eJBCC® and the JBCC logo are
registered trademarks. The Joint Building Contracts Committee® claims authorship of this work in terms of the Copyright Act
No 98 of 1978 as amended. All rights are reserved. No part of this publication may be reproduced, stored in any retrieval
system, or transmitted, in any form or by any means, without the prior written permission of the Joint Building Contracts
Committee® NPC. Unauthorised reproduction of the work is an infringement of the copyright and judicial proceedings can
and will be instituted to obtain relief and the recovery of damages

Copyright reserved JBCC® Principal Building Agreement Edition 6.1 March 2014 CONTRACT DATA
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A TENDER INFORMATION

A1 Project name
Cosy Flats
A2 Works description
Existing offices converted into flats, existing 6 storey reinforced concrete structure retained,
partition and external walls demolished,new installation of electrical and plumbing services,
external and internal walls and finishes, refurbishment of existing (2) lifts.Prepare street level
sapce for future retail. There is no basement. Space behind the building to store construction
materials etc. The building will not be occupied during the construction period

A3 Site description

Erf No /Township Erf 345 Symphony Village

Local authority Whatever Local Authority

Street address 9 Dvorak Street, Symphony Village

A4 Employer

Name Professional Rehab

Business-eg: public company Partnership

Business registration number 1 234 567 890 VAT/GST 4 567 890 123

Contact person Wizzard Sharpe Mobile +27823456789

E-mail [email protected]
Registered street address 40 Mozart Street, Symphony Village

Postal address PO Box 999, Symphony Village Code 0070

Telephone +27 12 345 67 89 Fax Not applicable

A5 Principal agent

Name

Practice registration number VAT/GST

Contact person Mobile

E-mail

Registered street address

Postal address Code

Telephone Fax

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A6 Agent

Name

Practice registration number VAT/GST

Contact person Mobile

E-mail

Registered street address

Postal address Code

Telephone Fax

A7 Agent

Name

Practice registration number VAT/GST

Contact person Mobile

E-mail

Registered street address

Postal address Code

Telephone Fax

A8 Agent

Name

Practice registration number VAT/GST

Contact person Mobile

E-mail

Registered street address

Postal address Code

Telephone Fax

A9 Agent

Name

Practice registration number VAT/GST

Contact person Mobile

E-mail

Registered street address

Postal address Code

Telephone Fax
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B CONTRACT DATA
Clause references apply to the JBCC® Principal Building Agreement Edition 6.1 (PBA) published March 2014
Only clauses in the PBA requiring the provision of information [CD] are quoted below

2.0 Law, regulations and notices

2.1/25.15 Law of the country applicable to the project South Africa

5.0 Contract documents

5.1 Signed contract documents held by the principal agent, or Employer
5.5 Number of copies of documents issued free to the contractor Three (3) copies

Priced document
Lump sum priced document, or yes / no? No
Priced bills of quantities (BoQ) yes / no? Yes
System/method of measurement SA Standard System Rev ? 2013

Contract documents comprising …

Description Marked ? Notes
JBCC® Principal Building Agreement Ed 6.1 - March 2014 A
JBCC® PBA Contract Data Ed 6.1 - March 2014 B
BoQ Ref PR 002/dated 201?-0?-0? C
Building Plan approval D
Not applicable -
Not applicable -
Not applicable -
Not applicable -
Not applicable -
Not applicable -
Not applicable -

NOTE: If insufficient space, please see annexure:-

Contract drawings - description Date Marked Number Revision

Plan Site 201?-1?-1? F 2000 b
Plan Street 201?-1?-1? G 2101 a
Plan Level 2-5 201?-1?-1? H 2102 a
Plan Level 6 201?-1?-1? I 2103 a
Plan roof 201?-1?-1? J 2014 a
Sections 1, 2,3 201?-1?-1? K 2201 c
Sections 4,5,6 201?-1?-1? L 2202 a
Elevations 201?-1?-1? M 2301 a
Detail: Bath room 201?-1?-1? \N 2401 a
Detail: Kitchen 201?-1?-1? O 2402 d
Schedule: Windows 201?-1?-1? P 25001 a
Schedule: Doors 201?-1?-1? Q 2601 b
Schedule: Finishes 201?-1?-1? R 2701 b

NOTE: If insufficient space, please see annexure:-

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6.0 Employer's agents

6.3
Description of interests of agents in the project
Not applicable
other than professional services, if applicable

10.0 Insurances
By the employer in the joint names of the parties, yes/no ? yes Obligation Currency Insured amount
Contract Works Insurance (CWI) (including materials and goods, temporary works) contract sum
Allowance for professional fees and escalation of the insured value at 25% pa, or ? % % 23.0%
Free issue material at new replacement value, added to CWI, where applicable not applicable
Employer owned surrounding property (care,custody, control or worked on) not applicable
Public Liability Insurance (each and every claim OR unlimited / value ?) every claim 10 000 000.00
Supplementary Insurance (incl CWI extensions) per CWI
Removal of Lateral Support Insurance employer ZAR 10 000 000
Other: not applicable
Policy deductibles Currency Amount
- Works / free issue contractor ZAR 10 000.00
- Employer owned surrounding properties contractor not applicable
- Public Liability contractor ZAR 10 000.00
- Supplementary Insurance contractor ZAR 10 000.00
- Removal of Lateral Support contractor not applicable
- Other: contractor
or…
By the contractor in the joint names of the parties, yes/no ? no Currency Insured amount
Contract Works Insurance (CWI) (including materials and goods, temporary works) contract sum
Allowance for professional fees and escalation of the insured value at 25% pa, or ? % %
Free issue material at new replacement value
Public Liability Insurance (each and every claim OR unlimited for the period)
Supplementary Insurance (incl CWI extensions) per CWI
Policy deductibles
Other:

11.0 Security
11.1.1-5 The contractor shall provide a Guarantee for Construction to the employer>D11.2-3 yes / no? yes

12.0 Duties of the parties = employer = site

9.2.7 Alterations & additions to existing premises? Yes

12.1.2 Premises occupied - yes/no? identify area? No

12.1.3 Relevant natural features to be retained / not applicable

relocated / removed

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12.1.4 Areas the contractor may not occupy? not applicable

12.1.5 Utilities connections - location Existing, to be upgraded

12.1.6 Statutory and/or other notices to be Construction permit issued by DoL

complied with by the contractor before
possession of site can be given

Due date / yyyymmdd

12.1.7 Possesion of the site - intended date 201?-0?-0?

12.1.12 Description of free issue by employer not applicable

(Attach separate page for multiple items)

NOTE: If insufficient space, please see annexure:-

14.0 Nominated subcontractors

14.1.4 Specialisation: not applicable
14.1.4 Specialisation: not applicable
14.1.4 Specialisation: not applicable
14.1.4 Specialisation: not applicable
14.1.4 Specialisation: not applicable

NOTE: If insufficient space, please see annexure:-

16.0 Direct contractors

Employer to define extent of work by a direct contractor [12.1.2]
16.1 Specialisation: not applicable
16.1 Specialisation: not applicable
16.1 Specialisation: not applicable

NOTE: If insufficient space, please see annexure:-

19/20/24 Practical completion / penalty for late completion

Inspection Date for practical
Penalty Penalty amount
= working completion
Currency per calendar day
days yyyymmdd
19.0 Practical completion of the works as a whole 8 201?1?-1? ZAR 6000.00
OR …only one option can apply !
19/20/24 Practical completion of the works in sections: 1
19/20/24 Practical completion of the works in sections: 2
19/20/24 Practical completion of the works in sections: 3
19/20/24 Practical completion of the works in sections: 4
19/20/24 Practical completion of the works in sections: 5

NOTE: If insufficient space, please see annexure:-

Copyright reserved JBCC® Principal Building Agreement Edition 6.1 March 2014 CONTRACT DATA
 Page 7
14

19.0 Practical completion

19.1.1 Items that do not have to be complete to achieve practical completion
Landscaping

NOTE: If insufficient space, please see annexure:-

19.1.1 Criteria to achieve practical completion (the BoQ may contain a more detailed description)
Per Specification

NOTE: If insufficient space, please see annexure:-

25.0 Payment
25.0 Currency: ZAR South African Rand
25.2 Issue of regular payment certificates on date@month seventh or… day of week n/a
25.3.2 Materials and goods off site - paid subject to ... Guarantee for Advance Payment provided ? no
25.3.4/26.9.5 Contract price adjustment provisions Method? fixed price

NOTE: If insufficient space, please see annexure:-

30.0 Dispute resolution

30.6.1 Alternative Dispute Resolution nominating body Association of Arbitrators (South Africa)

Copyright reserved JBCC® Principal Building Agreement Edition 6.1 March 2014 CONTRACT DATA
 Page 8
15

Changes made to JBCC® documentation

Nil

Note: The amendments contained herein or in the single referenced Annexure constitute the only
amendments to the standard JBCC Agreement that will apply. No other amendments shall be of any
force or effect.”
NOTE: If insufficient space, please see annexure:-

C TENDER CLOSING

Tender closing: date 201?-2?-2? Tender  closing:  time 12:00

Tender closing: place Design Rehab offices

SUBMISSION ADDRESS 123 Hayden Street, Symphony Village

Delivered in electronic format? yes / no? No E-mail address not applicable

Alternate offer considered ? yes / no? No Only if original tender submitted yes / no? No

D TENDERER'S SELECTION (to be completed by the tenderer)

11.0 Securities Obligation

11.1.2 Guarantee for Construction (variable) If specified, contractor's choice yes/no ? Yes
11.1.3 or Guarantee for Construction (fixed) If specified, contractor's choice yes/no ? No

11.1.4 Guarantee for Advance Payment Provided by the contractor yes/no ?

(where the contractor requests the employer to pay an advance for materials and goods)
Purpose Currency Amount

11.4 Guarantee for Payment Provided by the employer yes/no ? yes

Currency ZAR Amount 150 000.00

19.0 Contractor's holiday periods during the construction period ?

Contractor's annual holiday period - year 1 from … not applicable until … not applicable
Contractor's 'other' holiday period - year 1 from … 201?-3?-3? until … 201?-3?-3?
Contractor's annual holiday period - year 2 from … not applicable until … not applicable
Contractor's 'other' holiday period - year 2 from … not applicable until … not applicable
Contractor's annual holiday period - year 3 from … not applicable until … not applicable
Contractor's 'other' holiday period - year 3 from … not applicable until … not applicable

NOTE: If insufficient space, please see annexure:-

Copyright reserved JBCC® Principal Building Agreement Edition 6.1 March 2014 CONTRACT DATA
 Page 9
16

26.0 Payment / Adjustment of Preliminaries

Payment of preliminaries
Option A Assessed by principal agent, an amount pro rated to the value of the works executed in the no
same ratio as the preliminaries to the contract sum, (including tax); shall exclude the amount
of preliminaries, all contingency sum(s) and any allowance for CPAP
Or … Or …
Option B An amount agreed by the principal agent and the contractor in terms of the Bills of
Quantities or the priced document to identify an initial establishment charge / a monthly
charge / and a final disestablishment charge yes

Where the contractor does not indicate option 'A' or option 'B' - option 'A' shall apply

Adjustment of preliminaries [26.9.4]

Option A For the adjustment of preliminaries both the contract sum and the contract value (including
tax) shall exclude the amount of preliminaries, all contingency sum(s) and any provision for
Cost Price Adjustment Provisions:-

- An amount which shall not be varied

- An amount varied in proportion to the contract value as compared to the contract sum
-An amount varied in proportion to the construction period as compared to the initial
construction period (excluding revisions to the construction period to which the contractor
is not entitled) to adjustment of the contract value in terms of the agreement

The contractor shall provide a breakdown of charges (incuding tax) within 15 working days of
the date of acceptance of tender and, where applicable, an apportionment of preliminaries per
section

Where such information is not provided the following subdivision shall be deemed to apply:
- 10% of the amount shall not be varied
- 15% varied in proportion of the contract value to the contract sum
- 75% varied in proportion to the revised construction period compared to the initial yes
construction period …

Or … Or …
Option B The contractor shall within 15 working days of the date of possesion of the site provide the
principal agent with a detailed breakdown of preliminaries amounts for the works as a whole,
or per section where applicable, including administative and supervisory staff charges and for no
the use of construction equipment in terms of the programme.

Where the contractor does not indicate option 'A' or option 'B' - option 'A' shall apply

Notes
1 By submission of this tender to the employer the tenderer offers and agrees to execute and complete the works
and remedy any defects in conformity with the specification for the tender sum stated - to be paid in instalments
as work is completed
2 The tender shall remain in full legal force for forty five (45) calendar days from the closing date of the tender.
The tenderer accepts liabilty for damages that may be suffered by the employer should the tender validity
period not be honoured
3 The lowest or any offer will not necessarily be accepted by the employer - nor need reasons be given for such a
decision
4 Any provision in this agreement that may confer any benefit or right in favour of any subcontractor shall be
binding on the parties and be capable of acceptance by such subcontractor at any time
5 Annexures … marked

A Not applicable
B Not applicable
C Not applicable

Copyright reserved JBCC® Principal Building Agreement Edition 6.1 March 2014 CONTRACT DATA
 Page 10
17

TENDER SUM COMPILATION

Currency
Tenderer's work excluding tax ZAR amount 6 543 210

Tax … at percentage 14% ZAR amount 916 049.40

Total TENDER SUM inclusive of tax ZAR amount 7 459 259.40

Tender sum in words

Seven million, four hunderd and fifty nine thousand two hundred and fifty nine Rand and forty
cents

(print)  TENDERER   Capacity who,  by  its  SIGNATURE  warrants  authority  thereto Date Location  

WITNESS  print  name Capacity SIGNATURE Date Location  

TENDERER'S DETAILS
Name Purrfect Builers

Business-eg: public company CC

Business registration number 1 234 567 VAT/GST 4 567 890 321

Contact person Miaauw Sleepalot Mobile +2788 999 1234

E-mail [email protected]
Registered street address 22 Strauss Crescent, Symphony Village

Postal address PO Box 345 Symphony Village Code 0070

Telephone +2712 345 67 89 Fax +27863456789

Copyright reserved JBCC® Principal Building Agreement Edition 6.1 March 2014 CONTRACT DATA
 18 of 32 Pages
Page 32

AGREEMENT
This agreement, the completed contract data and the listed documents [CD] comprise the entire contract between
the parties. Any provision in this agreement that may confer a right or benefit on a subcontractor shall be binding
on the parties and be capable of acceptance by such subcontractor at any time. No representations, terms,
conditions or warranties not contained in this agreement shall be binding on the parties. No agreement or addendum
varying, adding to, deleting or terminating this agreement including this clause shall be effective unless reduced to
writing and signed by the parties

The contracting parties

The parties Employer Contractor

Business name Professional Placements Purrfect Builders cc

Business type Partnership Close Corporation

Business registration 1 234 567 890 1994 / 012 345 / 23

Tax number (VAT/GST) Value Added Tax 4 567 890 Value Added Tax 4 987 654

Contact Person Lone Sharpe Pieter Veldhuizen

ID Number 000000 0000 000 000000 0000 000

Address: Building name Not applicable

Not applicable
Address: Street 40 Mozart Street 22 Strauss Close

Address: Suburb Not applicable Not applicable

Address: City Symphony Village Symphony Village

Address: PO Box 456 444

Address: Post Office Symphony Village Symphony Village

Address: Province Neverland Neverland

Address: Country South Africa South Africa

E-mail [email protected] [email protected]

Telephone +2711 234 56 78 +2711234 12 34

Mobile phone +2766 234 56 78 +2777 234 56 78

Fax Not applicable +2786 121 22 33

Project name Cosy Flats

Project location
Erf 346 – 9 Dvorak Street, Symphony Village – Neverland – South Africa

Currency South Arican Rand (ZAR)

Accepted contract
ZAR 6 980 739.84 only
sum including tax
Accepted contract Six million nine hundred and eighty thousand seven hundred and thirty nine Rand
sum in words and eighty four cents

Signed – who by
signature hereto
warrants authority
Signed - date 201?-11-11 201?-11-11

Signed - location Symphony Village Symphony Village

Signed - witness

Name of witness Peter Trustworthy Hans Skelm

Copyright reserved JBCC® Principal Building Agreement Edition 6.01– March 2014
 19

®
Certificate of Site Possession for use with the …
Principal Building Agreement Edition used ?

Minor Works Agreement Edition used ? Ed 5.1 March 2014

PROJECT DETAILS

Works Offices to Flats conversion

Site 9 Dvorak Street, Symphony Village

Erf 346 Symphony Village
Employer Professional Placements

Contractor New World Contracts

Principal Agent Millenium Design - George Best

Agent Star Surveys - Peter Straight

Note: A professional Land Surveyor may be appointed to perform this function

The following particulars of the site were pointed out to the contractor by the agent

Pegs NW corner GPS: S25˚ 23.096’ E30˚ 32.395’

Benchmark Manhole Dvorak Street

Other features Fig tree south east corner to be preserved

Information attached hereto: Survey plan with GPS coordinates and levels above mean sea level

This certificate records the hand-over of the site to the contractor for the purpose of constructing the works
in terms of the agreement. A copy of this certificate shall be provided to the contractor

Contractor's Representative: Name Signature Date

Contractor New World Contracts Signed at Symphony Village

Employer('s representative): Name Signature Date

Name and address of the principal agent's practice

JBCC® PBA or MWA CERTIFICATE OF SITE POSSESSION © March 2014
 20

COMPLETION
!!
INTRODUCTION
!
All JBCC® agreements follow the same procedures to achieve Interim, Practical and Final Completion. The procedures
described in the JBCC® agreements to achieve each of the three degrees of completion must be applied strictly to
minimise disagreements later. Other than payment, completion is the most important aspect of the agreement and therefore
no “short cuts” should be taken in certifying any of the degrees of completion. The procedures and time bars applying to

!!
completion and to payment must be strictly adhered to by the principal agent and be observed by the parties

2.0 INTERIM COMPLETION (in terms of the JBCC® N/S Subcontract Agreement only)
!!
!
2.1 PURPOSE

The contractor generally requires the work of all subcontractors to be completed before the date of practical completion
to permit the timeous commissioning of services and general cleaning of the site before relinquishing possession of the site/
works to the employer
!
Note: Stage completion: The contractor and the subcontractor may agree which aspects of the n/s subcontract works

!
must be completed before interim completion can be achieved in a particular project (only applies in the NSSA)

!
2.2

▪
SUBCONTRACT CONSTRUCTION PERIOD AND PROGRAMME

The n/s subcontract construction period set by the principal agent in the pre-tender information and stated in the n/
s subcontract data
▪ Where the contractor has been appointed at the time of calling for the subcontract tender, the principal agent must
consult the contractor in setting the date for interim completion. The contractor and the subcontractor must agree
the n/s subcontract programme in harmony with the works as a whole
▪ The parties may agree to vary the start of the n/s subcontract programme and the intended date of interim

! completion

!
2.3

▪
ACHIEVEMENT OF STAGE COMPLETIONS AND INTERIM COMPLETION

Criteria for stage completions must be set at the start of the n/s subcontract construction period to avoid possible
disputes later
▪ The contractor must inform the principal agent if the assistance of an appointed specialist agent will be required for
the inspection for achievement of interim completion
▪ On achievement of interim completion the responsibility for the n/s subcontract works passes to the contractor.

! This does not relieve the subcontractor of his responsibility in respect of defective or incomplete work

!
2.4

▪
DAMAGES

The subcontractor may be liable for damages to the contractor for the late achievement of interim completion. The
subcontractor must be allowed sufficient time to achieve stage and/or interim completion set by the contractor
▪ Where the subcontractor is prevented from fulfilling obligations due to default of the contractor, other subcontractors
or a direct contractor, the subcontractor shall be entitled to damages. Adjustments to the subcontractor’s
completion dates are not dependant on the contractor obtaining similar adjustments in terms of the agreement with
the employer

!!
▪ The calculation of damages must be shown in the n/s subcontract recovery statement - see page 62

!!
!!
!!
!!
!!
!!
!!
!!
!!
©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 21
Comple6on  stages  in  JBCC  building  agreements

was  noted  and  reported  to  the  contractor

DATE  -­‐  expiry  PRESCRIPTION                                          

three  years  from  the  date  that  a  defect  

CONTRACT VALIDITY PERIOD

In  common  law  -­‐  prescrip6on  runs  for  

DATE  -­‐  comple6on    PRACTICAL
DATE  -­‐  comple6on    INTERIM
Interim  Comple6on  applies  only  

DATE  -­‐  comple6on    FINAL

in  the  N/S  Subcontract  Agreement
DATE  -­‐  Site  possession
DATE  -­‐  Tender  award

DATE  -­‐  expiry    L  D  L  P

The  intended  date  for  prac6cal    
comple6on  may  be  revised  by  the  
principal  agent
Where  the  (revised)  date  for  
prac6cal  comple6on  is  not  met,    
the  contractor  may  be  liable  for  
penal6es  to  the  employer

3 years
CONSTRUCTION PERIOD = Private Sector 90day DLP 5 year LDLP

AEer  'prac6cal  comple6on'  the  works  can    be  

used  for  the  intended  purpose  by  the  
CONSTRUCTION PERIOD = Public Sector employer,  subject  to  the  issue  of  an  
"occupa6on  cer6ficate"  by  the  local  authority
AEer  prac6cal  comple6on  the  contractor  is    
not  obliged  to  execute  any  further  contract  
instruc6ons  except  those  rela6ng  to  the  
comple6on  of  outstanding  work
 22

®
Certificate of lnterim Completion
Issued in terms of clause 18.0 or clause 20.3.1 of the
N/S Subcontract Agreement Edition 6.1 © March 2014

Contractor New World Contracts

Subcontractor Starlight Ceilings
N/S subcontract works Drywall partitioning and suspended ceilings
Site 9 Dvorak Street, Symphony Village

The contractor certifies that interim completion for:

(Clause 18) the n/s subcontract works as a whole yes / no ? no

or

(Clause 20.3.1) section # Storeys 2-4 of 6 Storeys 'Name' not applicable

was achieved on … Date 201?-01-31

NOTE: The subcontractor remains liable for defects until final completion.
Where practical completion has been certified
the Defects Liability Period ends ninety (90) calendar days
from the date of practical completion
subject to clause 21 (final completion)

Date

201?-01-31

Signed by the contractor who certifies that the n/s subcontract works has been completed in accordance
with the specified criteria for interim completion on the date stated,
irrespective of the date of signature of this certificate

Name and address of the contractor

JBCC® PBA Edition 6.1 CERTIFICATE OF INTERIM COMPLETION © March 2014
 23
Comple6on  stages  in  JBCC  building  agreements

was  noted  and  reported  to  the  contractor

DATE  -­‐  expiry  PRESCRIPTION                                          

three  years  from  the  date  that  a  defect  

CONTRACT VALIDITY PERIOD

In  common  law  -­‐  prescrip6on  runs  for  

DATE  -­‐  comple6on    PRACTICAL
DATE  -­‐  comple6on    INTERIM
Interim  Comple6on  applies  only  

DATE  -­‐  comple6on    FINAL

in  the  N/S  Subcontract  Agreement
DATE  -­‐  Site  possession
DATE  -­‐  Tender  award

DATE  -­‐  expiry    L  D  L  P

The  intended  date  for  prac6cal    
comple6on  may  be  revised  by  the  
principal  agent
Where  the  (revised)  date  for  
prac6cal  comple6on  is  not  met,    
the  contractor  may  be  liable  for  
penal6es  to  the  employer

3 years
CONSTRUCTION PERIOD = Private Sector 90day DLP 5 year LDLP

AEer  'prac6cal  comple6on'  the  works  can    be  

used  for  the  intended  purpose  by  the  
CONSTRUCTION PERIOD = Public Sector employer,  subject  to  the  issue  of  an  
"occupa6on  cer6ficate"  by  the  local  authority
AEer  prac6cal  comple6on  the  contractor  is    
not  obliged  to  execute  any  further  contract  
instruc6ons  except  those  rela6ng  to  the  
comple6on  of  outstanding  work
 24

3.0 PRACTICAL COMPLETION

!
!
3.1

▪
PURPOSE

The principal agent must specify in appropriate detail in the contract data at tender stage what quality of work and
degree of completion the contractor has to produce to achieve practical completion to limit subjective interpretation
thereof. This will vary from one project to another depending on the nature and purpose of the building
▪ The professional consultants and the team of contractors have been appointed to provide the employer with a building
that “... can effectively be used for the intended purpose…” Achievement of practical completion is the most important

! of the various completions required in terms of the agreement

!
3.2

▪
CONSTRUCTION PERIOD

The principal agent at the tender stage determines and specifies in the contract data the construction period and
the intended date for practical completion of the whole works, or the intended dates for practical completion where
the works is to be completed in sections - but not both!
• During the construction period the principal agent must “inspect the works, or a section thereof, at appropriate
intervals to give the contractor interpretations and direction on the standard of work and the state of completion of the
works required of the contractor to achieve practical completion”… and likewise for work by subcontractors
• Any such interpretations and direction given to the contractor may not be construed as approval of any work or

! component inspected by the principal agent

!
3.3

•
ACHIEVEMENT OF PRACTICAL COMPLETION

The principal agent at the tender stage determines and specifies in the contract data the period required to inspect
the works and to issue the list for practical completion, then the “certificate of practical completion” and finally the
list for completion
• “The contractor shall inspect the works to satisfy himself that the specified degree of completion of the works has
been achieved” and give timeous notice to the principal agent to inspect the works on or before the anticipated date
of practical completion
• The contractor must make provision in his programme (possibly as a sub-programme for the 3-4 weeks before the
date for practical completion) for the inspection period required by the principal agent. The principal agent may
require reasonable notice of the date(s) when the contractor intends such inspection to take place
• The principal agent and other specialist agents must decide during such inspections if the works is “... substantially
complete and can effectively be used for the purpose intended ...”
• Where the degree of completion of the works does not comply with the specifications, the principal agent must
forthwith issue a single “comprehensive and conclusive list for practical completion recording the defects and/or
outstanding work to be completed to achieve practical completion. The principal agent may not add to this list for
practical completion once it has been issued but he can issue a contract instruction at any time where, for example,
a water pipe bursts that must be repaired without delay
• The principal agent can issue an ‘updated’ list for practical completion that excludes remedied defects
• Where the degree of completion of the works complies with the specifications, the principal agent must issue the
certificate of practical completion and a list for completion
• Whilst other appointed agents may assist in such inspections the issue of the certificate of practical completion is
solely the responsibility of the principal agent
• Where the principal agent does not issue the (updated) list for practical completion or the certificate of practical
completion within five (5) working days of such inspection, the contractor may give notice to the principal agent to
comply within a further five (5) working days - failing which practical completion will be deemed to have occurred on
expiry date of such notice
• After certification of practical completion the employer may impose the penalties stated in the contract data (from
the specified or revised date for practical completion until the actual date of practical completion when possession of
the site is relinquished to the employer by the contractor). Similarly, the contractor may be entitled to recover
damages from a subcontractor or vice versa
• The issue of the certificate of practical completion may not occur before the specified/revised date for practical
completion, unless agreed by the parties, as the contractor’s obligation is to hand over the works on the date for
practical completion and not earlier
• The principal agent must issue a certificate of practical completion (and later a certificate of final completion) to
the contractor for each defined section. The certificate for the last section is for the whole works. Thus multiple

! completion dates are applicable to product warranties, the defects liability period and the latent defects liability period

!
3.4 CONSEQUENCES

On achievement of practical completion:

▪ The (legal) responsibility for the works passes to the employer
▪ The employer is entitled to possession of the works and site
▪ The contractor is not obliged to carry out any contract instruction for additional works
▪ The principal agent must issue a list for completion
▪ The contractor is no longer liable for penalties (may apply before the date of practical completion)
▪ The principal agent must prepare the final account within ninety (90) calendar days
▪ The value of the Guarantee for Construction (variable) reduces to 4% of the contract sum
▪ The Guarantee for Construction (fixed) expires and the payment reduction reduces to 2,5% of the contract sum
▪ The Guarantee for Payment remains valid unto the final payment has been made by the employer

!
▪ The contractor becomes entitled to compensatory interest (PBA only)

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 Prac%cal  Comple%on  25
applicable  in  the                                
JBCC  Principal  Building  and  Minor  Works  Agreements

CONTRACT VALIDITY PERIOD

PA  in  tender  documents  specifies  
start  +  dura6on  of  construc6on  

DATE  -­‐  comple6on    PRACTICAL

DATE  -­‐  expiry  PRESCRIPTION

DATE  -­‐  comple6on    INTERIM
period  +  comple6on  criteria

DATE  -­‐  comple6on    FINAL

PA/agents  direct  standard  of  work
DATE  -­‐  Site  possession
DATE  -­‐  Tender  award

DATE  -­‐  expiry    L  D  L  P

+  quality  of  finish  required

C  no6ce  to  PA  to  inspect  for  PC

PA    inspects  works,  issues  List  for

Prac6cal  Comple6on,  and  if    ready,  
issues  Cer6ficate  of  Prac6cal  
Comple6on  and  List  for  Comple6on

C  claim  revision  of  date  of  PC

PA  assesses  6me  +  money  claims  

PA  assesses  penal6es   90day DLP 5 year LDLP

Note:  Issue  Cer6ficate  of  Prac6cal  Comple6on  

C's CONSTRUCTION PERIOD = Private Sector -­‐  employer  occupies  works,  penalty  liability  
ends,  contract  works  insurance  >  building  
insurance,  value  of  securi6es  reduces  

C's CONSTRUCTION PERIOD = Public Sector Note:  C    fixes  items  on  list  for  comple6on

Note:  PA  +  C    +  SC  resolve  final  account

 26

®
Certificate of Final Completion
Issued in terms of clause 20.0 or clause 21.0 of the
Principal Building Agreement Edition 6.1 © March 2014

Employer Professional Placements

Contractor New World Contracts
Works Offices to Flats conversion
Site 9 Dvorak Street, Symphony Village

The principal agent certifies that final completion for:

(Clause 21) the works as a whole yes / no ? yes

or

(Clause 20) section # n/a of n/a 'Name' not applicable

was achieved on … Date 201?-02-02

Where Final Completion is certified

the Latent Defects Liability Period
ends 5 years from the date of Final Completion Date 201?-02-02+5years

Date

201?-02-02

Signed by the principal agent who, as agent for the employer, certifies that the works has been
completed in accordance with the specified criteria for final completion on the date stated,
irrespective of the date of signature of this certificate

Name and address of the principal agent's practice

JBCC® PBA Edition 6.1 CERTIFICATE OF FINAL COMPLETION © March 2014
 27

®
Certificate of Practical Completion
Issued in terms of clause 19.0 or clause 20.0 of the
Principal Building Agreement Edition 6.1 © March 2014

Employer Professional Placements

Contractor New World Contracts
Works Offices to Flats conversion
Site 9 Dvorak Street, Symphony Village

The principal agent certifies that practical completion for:

(Clause 19) the works as a whole yes / no ? no

or

(Clause 20) section # Storeys 2-4 of 8 Storeys 'Name' not applicable

was achieved on … Date 201?-02-02

Where practical completion has been certified

the Defects Liability Period ends ninety (90) calendar days
from the date of practical completion
subject to clause 21 (final completion) Date 201?-04-30

Date

201?-02-02

Signed by the principal agent who, as agent for the employer, certifies that the works has been
completed in accordance with the specified criteria for practical completion on the date stated, irrespective
of the date of signature of this certificate

Name and address of the principal agent's practice

JBCC® PBA Edition 6.1 CERTIFICATE OF PRACTICAL COMPLETION © March 2014
 28

!!
4.0 FINAL COMPLETION
!
!
4.1 PURPOSE

The definition of final completion requires the principal agent to certify “... the stage of completion of the works to be free
of defects…” The issued certificate of final completion is “…conclusive as to the sufficiency of the works and that the

!
contractor’s obligations have been fulfilled other than for latent defects”

!
4.2

▪
ACHIEVEMENT OF FINAL COMPLETION

The defects liability period (DLP) automatically comes into force on the calendar day following the date of practical
completion and ends at midnight ninety (90) calendar days from that date … or when defects on the list for final
completion have been satisfactorily completed (but not before expiry of the ninety (90) calendar day DLP)
▪ The contractor must “… rectify all items on the list for completion at least ten (10) working days before the expiry of
the DLP and give notice to the principal agent to inspect the works within five (5) working days of receipt of such
notice”. The principal agent must, within reason, inspect the whole of the works for latent defects that may have
become patent during the DLP and not just identified items on the list for completion
▪ The principal agent must forthwith issue to the contractor a list for final completion incorporating the list for
completion and any latent defects that may have become patent to rectify to achieve final completion. The
contractor must give the principal agent notice to inspect rectified items until all defects have been rectified to the
satisfaction of the principal agent
▪ Note: Where the employer takes possession of the site/works before practical completion has been certified – the
principal agent must issue the certificate of practical completion forthwith (specifying the date when possession of
the site/works was relinquished by the contractor) and issue the list for completion of items to be rectified by the
contractor within thirty (30) calendar days
• Where the principal agent does not issue the (updated) list for final completion or the certificate of final
completion within five (5) working days of such inspection, the contractor may give notice to the principal agent to
comply within a further five (5) working days - failing which final completion will be deemed to have occurred on

! expiry date of such notice

!
4.3 CONSEQUENCES

On achievement of final completion:

▪ The contractor’s obligations in terms of the agreement have been fulfilled
▪ The contractor’s public liability in relation to the works ceases
▪ The value of the Guarantee for Construction (variable) reduces to 2% of the contract sum until the final payment
▪ All subcontractor’s guarantees, warranties or indemnities are deemed to be ceded to the employer
▪ The balance of the contractor’s latent defects liability period is determined (see section 6.0)

!!
▪ The final payment certificate can now be issued

5.0 SECTIONAL COMPLETION

!
!
5.1 PURPOSE

Projects may have to be completed in sections - as separate buildings or by storey. Each section must be clearly defined
with due consideration for common areas, provision of services, safe access by the employer and continued access by the
contractor to complete the works. Sectional completions should be avoided where each section cannot be defined as a

!
homogeneous unit and where there is no reasonable continuity of work for the contractor

Note: The contract works insurance must be effected by the employer to prevent conflict that may arise from multiple
practical completions possibly insured by different insurers. Securities, guarantees, warranties and the like should only be

!
provided for the works as a whole and not for individual sections

!
5.2 ACHIEVEMENT OF SECTIONAL FINAL COMPLETION

Where sectional completions are required - each section (other than the last section) must be treated as unique for
completion purposes. Thus each section requires:
▪ A certificate of interim completion for each subcontractor
▪ A certificate of practical completion

!
▪ A certificate of final completion (other than the last section)

!
5.3 CONSEQUENCES

Payment is always made for the works as a whole - never for a section - by issuing the following documents:
▪ A (monthly) interim payment certificate
▪ A (monthly) recovery statement
▪ A (monthly) payment notification to each subcontractor
▪ A final account
▪ A final payment certificate

!
▪ A certificate of final completion for the works as a whole incorporating the last section

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 Final  Comple-on  29applicable  in  the                                                            
JBCC  Principal  Building  and  Minor  Works  Agreements

CONTRACT VALIDITY PERIOD

C  rec6fies  items  on  List  for        
Comple6on  to  suit  occupants

DATE  -­‐  comple6on    PRACTICAL

DATE  -­‐  expiry  PRESCRIPTION

DATE  -­‐  comple6on    INTERIM
C  >  no6ce  PA  to  inspect  before    

DATE  -­‐  comple6on    FINAL

expiry  of  90C-­‐day  DLP
DATE  -­‐  Site  possession

DATE  -­‐  expiry    L  D  L  P

DATE  -­‐  Tender  award

PA    inspects  works,  issues  List  for  

Final  Comple6on  (updated  List  for  
Comple6on)  done?    issues  
Cer6ficate  of  Final  Comple6on  
Note:  PA  +  C    +  SC  resolve  final  
account  including  outstanding    
6me  and  money  claims,  penal6es
Final  Account  agreed,  PA  issues  
Final  Payment  Cer6ficate  

90C-day DLP 5 year LDLP

Note:    
CONSTR. PERIOD = Private C's  public  liability  period  ends  
Value  of  securi6es  reduces  
NSSA  warran6es  ceded  to  E  
 
CONSTR. PERIOD = Public
 30

!!
6.0 LATENT DEFECTS LIABILITY PERIOD
!
!
6.1 PURPOSE

In common law the liability of the contractor (and of agents described in the professional appointment agreement) to the
employer for latent defects is open ended and will only expire with the demolition of the building - clearly an untenable
situation. In all JBCC® agreements the latent defects liability period (LDLP) of the contractor is restricted to a period of five
(5) years from the certified date of final completion or the date of termination by the contractor or where execution of the

!
works has become impossible:-

▪ The definition of a “latent defect” relies on the definition of “defect”. Thus the latent defect definition becomes “... any
aspect of the works which ... includes an imperfection that impairs the structure, composition or function of the works ...
which a reasonable inspection ... would not have revealed before the issue of the list for final completion”, and

!
▪
“defects which may appear up to the date of final completion shall be addressed...."

This definition does not specify how a defect that becomes apparent after final completion is to be dealt with. Where
this occurs, the employer must give notice to the contractor to remedy the defect within the LDLP. Failure by the
contractor to do so entitles the employer to employ another contractor to remedy the patent defect(s) and to claim
such expense from the contractor. The obligation to remedy a defect is clear in common law and in the Consumer

!
▪
Protection Act

The “period“ is defined: “The latent defects liability period shall commence at the start of the construction period and

!
▪
end five years from the date of final completion”. The time period is clear where the works reaches final completion

If final completion is not achieved - where the agreement is terminated prior to the achievement of final completion
the termination clauses apply. The final account must be prepared, and on acceptance by the parties, the final
payment certificate must be issued by the principal agent. Final completion will be deemed to have occurred on the
date of acceptance of the final account but no certificate of final completion is issued in terms of the agreement.

!
▪
The five year period applies (contractor default) or no period is applicable (employer default)

The “liability” aspect - The contractor shall make good all defects that appear up to the date of expiry of the LDLP.
Where termination of this agreement occurs before the date of final completion, the LDLP shall end five (5) years from

! the date of termination [29.10] for the completed portion of the works only,

or
!
▪ Where termination of this agreement occurs before the date of final completion on the date of termination where
execution of the works has become impossible due to circumstances beyond the control of either party, or on the date

!
▪
of termination by the contractor due to default by the employer

The liability of the principal and other agents is determined by the terms of their conditions of appointment and not

! those of the building contract

!
6.2 PRESCRIPTION PERIOD

All defects as defined in terms of the agreement are subject to a prescription period determined by law. In South Africa this
period is three (3) years. The prescription period commences from the date on which the employer (principal agent)

!
becomes aware of a defect and notifies the contractor forthwith

The LDLP is not extended by the prescription period – but the obligation on the contractor to remedy an identified and

!!
notified defect only remains – and this may extend beyond the five (5) year LDLP

!!
!!
!!
!!
!!
!!
!
!
!
!
©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 DATE  -­‐  Tender  award

DATE  -­‐  Site  possession

CONSTR. PERIOD = Public

CONSTR. PERIOD = Private
DATE  -­‐  comple6on    INTERIM
DATE  -­‐  comple6on    PRACTICAL
CONTRACT VALIDITY PERIOD

90C-day DLP
LATENT DEFECTS LIABILITY PERIOD

DATE  -­‐  comple6on    FINAL

Latent  Defects  31Liability  Period  
applicable  to  all    JBCC  Building  Agreements

5 year LDLP

DATE  -­‐  expiry    L  D  L  P

DATE  -­‐  expiry  PRESCRIPTION                                          

3 years

In  common   law  
DATE    prescrip6on  
-­‐  e-­‐xpiry   runs  for  
PRESCRIPTION
three  years  from  the  date  that  a  defect  
was  noted  and  reported  to  the  contractor
 32

!
PAYMENT
!
!
INTRODUCTION

All JBCC® agreements follow the same payment procedures that must be applied strictly to minimise disagreements later.
“Payment” is probably the most ‘sensitive’ aspect of the agreement and therefore no “short cuts” should be taken in
certifying amounts due to the contractor or a subcontractor, and occasionally due to the employer! The procedures and
time bars applying to valuation and certification as well as to payment must be applied by the principal agent and be

!!
observed by the parties

7.0 INTERIM PAYMENT

!
!
7.1 PREPARATION

!
The following contract data clauses have a direct bearing on the preparation for valuation, certification and payment:-

Pre-Tender Information
▪ Employer details
▪ Principal Agent details (Only the principal agent is authorised to certify payment)
▪ Works description
▪ Law of the agreement
▪ Criteria for practical completion
▪ Site description
▪ Payment (or not!) for materials and goods (unfixed on site, off site or in transit)
▪ Completion - per section or the works as a whole
▪ Penalty - per section or the works as a whole
▪ Contract Price Adjustments – method used

!
▪ Changes, if any, to the provisions of the JBCC® agreement

Post Tender Information

▪ Contractor details
▪ The accepted contract sum that becomes the base amount of the contract value in terms of the agreement
▪ The latest day of the month for the issue of an interim payment certificate
▪ The preliminaries amounts payment option selected in terms of the tender
▪ The preliminaries amounts adjustment option selected in terms of the tender

!
▪ The security option selected in terms of the tender

!
7.2 THE INTERIM PAYMENT CYCLE (See diagram opposite)

!
Setting the Cycle

▪ The principal agent records the date of issue of the interim payment certificate in the contract data
▪ The contractor and subcontractors must cooperate with the principal agent to submit payment claims in terms of the
defined payment cycle
▪ The employer must pay the contractor within fourteen (14) calendar days of the date of issue of a payment
certificate
▪ The contractor must pay each subcontractor within twenty one (21) calendar days of the date of issue of a payment
certificate
▪ The contractor must pay the employer within twenty one (21) calendar days of the date of issue of a payment

! certificate

!
Valuation and certification

The principal agent shall issue a payment certificate by the defined date [CD] in the agreed payment cycle - based on the
valuation of completed work provided by the contractor or, where not provided, assessed by the principal agent (and/or

!
the quantity surveyor where appointed)

The principal agent shall issue a payment certificate in every payment cycle comprising a fair estimate of work executed
and of materials and goods to the contractor with a copy to the employer, and

To the contractor A summary of amounts due to each n/s subcontractor

To each n/s subcontractor

!
A Recovery Statement to the contractor

A N/S Subcontract Payment Notification showing the amount included in the

! contractor‘s payment certificate

And the contractor shall issue to each subcontractor

A N/S Subcontract Recovery Statement

!! A N/S Subcontract Payment Advice

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 Interim  payment   33
cycle  
applicable  to  all    JBCC  Building  Agreements
Contract  Data   Contract  Data   Contract  Data  
Issue  cer.ficate E  pays  C C  pays  SC's

1st 7th 21st 28th

Claims Valuation 14 C-day E payment window 7 C-day C pay Claims

Period  agreed   Period  agreed   Period  agreed  

PA  &  C  &  SC's PA  &  C  &  SC's PA  &  C  &  SC's
Contractor (QS  +)  Principal   Contractor
submit  /  agree Contractor submit  /  agree
Agent  agree  
claims  to   pays claims  to  
valuaCon  and
Principal  Agent Subcontractors Principal  Agent
 issue  Payment
CerCficate  and  
 Recovery  Stmnt,  
Payment  
NoCficaCon
Contractor
Subcontractors Subcontractors
issues    to  SC  
submit  /  agree submit  /  agree
NS  Recovery  
claims  to   claims  to  
Stmt  and
Contractor Contractor
Payment  Advice
 34

!8.0 SECURITY PROVIDED BY THE CONTRACTOR

!!
▪
!
8.1 GUARANTEE for CONSTRUCTION (VARIABLE)

The default value of the security is set at the maximum guaranteed sum not to exceed ten per cent (10%) of the
contract sum
▪ The security reduces to not more than six per cent (6%) once 50%+ of the contract sum has been certified
▪ After practical completion the value reduces to not more than four per cent (4%) of the contract sum
▪ After final completion the value reduces to not more than two per cent (2%) of the contract sum
▪ The security expires on payment of the amount due to the contractor in the final payment certificate. Where

! payment is due to the employer the security expires on settlement of such amount

!
8.2

▪
GUARANTEE for CONSTRUCTION (FIXED and PAYMENT REDUCTION)

The default value of the security is set at the maximum guaranteed sum not to exceed five per cent (5%) of the
contract sum.
▪ The value of the works to be certified that does not exceed the contract sum is adjusted to 95% of such value up to
practical completion
▪ Where the value of the works increases during construction the 95% limit of the contract sum will be achieved prior to
practical completion
▪ The contract value of the works that exceeds the contract sum plus any CPAP adjustments is certified in full
▪ On achievement of practical completion the fixed portion of the security expires
▪ On achievement of practical completion the value of the works to be certified is adjusted to 97,5%
▪
!
100% of the contract value is certified in the final payment certificate

Note: The payment reduction has two possible negative impacts. These are:
* No interest is payable on the reduction

! * A negative cash flow results where payment to n/s subcontractors is certified in full

!
8.3

▪
VARIABLE CONSTRUCTION GUARANTEE (MINOR WORKS AGREEMENT)

As 8.1 but the security is set at the maximum guaranteed sum not to exceed six per cent (6%) of the contract sum. No
reduction of value occurs before practical completion
▪ When practical completion is achieved the value reduces to not more than four per cent (4%) of the contract sum

!
▪ When final completion is achieved the value reduces to not more than two per cent (2%) of the contract sum

Note: (Applicable to 8.1, 8.2 and 8.3) The security has an expiry date. This must be specified in the tender documents.
Such expiry date should be set at least six months after the anticipated date for practical completion. Where the
contract is likely to continue beyond this date the employer may instruct the contractor to have such period
extended by the guarantor – who may choose to reissue such a security for the balance of the works only
Note: (Applicable to 8.1, 8.2 and 8.3) Where the contract value exceeds the contract sum by more than 10% such

! security must be reissued to suit the increased (sub)contract value

!
8.4

▪
RETENTION – MINOR WORKS AGREEMENT

Retention, as a payment reduction of the value of the completed works to be certified is set at eight per cent (8%) to a
maximum of four per cent (4%) of such value to practical completion – the four per cent (4%) limit will be reached long
before practical completion
▪ The retention reduces to two per cent (2%) after practical completion
▪
!
No retention is deducted in the final payment certificate

Note Where an amount certified in a payment certificate is in favour of the employer [0.0] the retention [0.0] is increased
by that amount
* No interest is paid on the retention held by the employer

! * The contractor must appreciate that the retention is “at risk” in the hands of the employer

!
8.5

▪
PUBLIC SECTOR

Guarantee for construction (fixed) – similar to the private sector; the five (5) per cent cash deposit is dealt with as
above

!!
▪ Guarantee for Construction (variable) – similar to the private sector

!!
!!
!!
!!
!
©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 35

!
COMPARISON OF GUARANTEE FORM - CLAUSES

Guarantee for Payment Guarantee for Guarantee for Guarantee for

NSSA Guarantee for Advance Payment Construction Variable Construction Fixed
Payment (PBA) (NSSA) (PBA) (NSSA)
Employer > Contractor Contractor > Employer Contractor > Employer
Who provides Contractor > Subcontractor Subcontractor > Employer Subcontractor > Contractor

Who benefits Contractor / Subcontractor Employer to recover ‘loan’ Employer

Contract sum incl Tax yes No = sum of ‘items’ yes yes

Sections? Not applicable Not applicable Not applicable

Documents required PA: Interim Pay Certificate PA: Interim Pay Certificate PA>E+C: Recovery Stmnt, Interim Pay Cert, Final Pay Cert

PA: Final Pay Certificate PA: Recovery Statement PA>E+C: Prac Completion / Final Completion Certificate
C: Payment Advice C>SC: Interim Pay Advice, PA: Final Pay Advice
C: Final Pay Advice PA>SC+C: Interim + Final Pay Notification
Intended completion date Intended completion date
Expiry date + 6 months + 6 months Intended completion + 6 months

Payment … Advance payment … 1.0 Construction ‘Variable’ 2.0 Construction ‘Fixed’

Guaranteed aggregate sum yes yes (multiple ‘products’) yes 5% fxd expires @ Prac Compl

Recoupment 1.1 Number of

months 10% > 50% Contract Sum

Recoupment 1.1 ‘Start’ month Then 6% until Prac Compl 5% retention until Prac Compl

Recoupment 1.1 Amount/

month Then 4% until Final Compl 3% retention until Final Compl

Pay remainder of diminishing

balance/expire on last Then 2% until Final Pay Crt 1% retention to Final Pay Cert
payment

Guarantor obligations 1.1 Guarantor obligations 2.1 Guarantor obligations 3.1 Guarantor obligations

Beneficiary procedures 1.2 Payment of money only 2.2 Payment of money only 3.2 Payment of money only

2.1 C notice to E Cert not paid

/ may call up security 4.1 E notice to C Cert not paid / E may call up security

2.2 No payment, C notifies G

to pay C incl Pay Certificate 4.2 1st Demand by E to G at G’s office, copy to C

4.3 Copy of Payment Certificate entitles E to cash

Guarantor’s procedures 3.0 G to pay C 3.0 G to pay E

3.1 1st 3.1 1st
E, no pay cert <7cD = G R, no pay cert <7cD = G
3.2 1st 3.2 1st
G, copy to E, at G’s office G at office <7cD, E call for
no pay cert issued after 1 pay’t of SfAP
notice – C requires payment
3.3 Copy of Pay cert + Rec
Stmnt

4.0 G pays E SfAP amount 5.0 G pays E sum/balance

4.1 Agreement cancelled

Recipient default 5.1 Agreement cancelled C’s default + notice to cancel

4.2 Agreement cancelled

Recipient prov sequestration / 5.2 Prov sequestration +/ or liquidation granted +court order
liquidation + court order
4.0 Aggregate of payments 5.0 Aggregate of payments
Maximum payout not exceed SfC amount not exceed SfAP amount 6.0 Liability limited per clauses 1 or 2

5.0 G =insurer, C submit

Guarantor an insurance recon of money used, pay 7.0 G=insurer, E reconcile expense + pay’ received, refund
company back balance + interest surplus + (prime) interest

6.0 G pay < 7cD of receipt of 6.0 G pay < 7cD of receipt of
1st written demand 1st written demand 8.0 G pay <7cD of 1

Physical addresses 8.0 G physical address 8.0 G physical address 10.0 G physical address

Security ‘not negotiable’, ‘not 9.0 SfAP not negotiable or 9.0 SfAP not negotiable or 11.0 CG not negotiable or transferable, expire on date, or full
transferable’, transferable, expire on date or transferable, expire on date or pay’t of CG amount
return original on expiry full pay’t / return original form full pay’t / return original form

Liquid document 10.0 SfP = liquid document 10.0 SfAP = liquid document 12.0 SfC = liquid document

11.0 SfP in RSA - 13.0 SfC in RSA -

Provisional sentence refer to High Court refer to High Court
Note: Standard Bank – subject to … * 1st continuing covering mortgage bond; Confirm pay demand not exceed aggregate value…;
The contractor must waive lien; Pay original works only; Sufficient balance of guaranteed amount to complete works;
Final payment only if works complete to specified standard; payout may not be used to pay tax, interest, or materials and goods off site;

!
The guarantor’s liability reduces pro rata; Guaranteed amount = 0 at final completion

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 36

®
Waiver of the Contractor's Lien for use with the …
Principal Building Agreement Edition used ? Ed 6.1 March 2014
Minor Works Agreement Edition used ?

Contractor New World Contracts

Employer Professional Placements
Works Offices to Flats Conversion
Site 9 Dvorak Street, Symphony Village ..

AGREEMENT

The contractor waives in favour of the employer any lien or right of retention that is or
may be held in respect of the works to be executed on the site

This waiver shall only come into effect on provision by the employer of a security for
payment in fulfilment of obligations in terms of the identified agreement

This done and signed at Symphony Village Date 201?-02-02

Name of Signatory Peter World Capacity CEO

For and on behalf of the contractor who by signature Signature of Witness

hereto warrants such authorisation
Contractor New World Contracts
Street Address 18 Dvorak Street, Symphony Village ..
Code 0101
Postal Address 18 Dvorak Street, Symphony Village ..
Code 0101
E-mail [email protected] Mobile +27721234567
Fax not applicable Telephone +27271234567

JBCC® PBA or MWA Waiver of Lien © March 2014

 37

Guarantee  for  Construction  

For  use  with  the  JBCC®  Principal  Building  Agreement   state  edition  /date

GUARANTOR  DETAILS  
Guarantor:

Physical  address:

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Employer:  

Contractor:

Principal  Agent:  

Works:

Site:  

Name  of  Signatory:

Contract  Sum: Accepted  amount  inclusive  of  tax Currency

…  amount  in  words:

Guaranteed  Sum: The  maximum  aggregate  amount Currency

…  amount  in  words:

Security  for  Construction (insert  variable  or  fixed)   Expiry  date

AGREEMENT  DETAILS
Sections Total  number  /  not  applicable Last  section
Principal  Agent  issues 'JBCC® format Interim Payment Certificates, the Final Payment Certificate, the Certificate of Practical Completion and
the  Certificate  of  Final  Completion

1.0      GUARANTEE  for  CONSTRUCTION  (Variable)

1.1 Where a Guarantee for Construction (Variable) in terms of the Agreement has been selected this clause 1.0 and 3.0 to 13.0 shall apply.
The  Guarantor’s  liability  shall  be  limited  to  the  diminishing  amounts  of  the  Guaranteed  Sum  as  follows:-­‐

GUARANTOR’S  LIABILITY PERIOD  OF  LIABILITY

1.1.1 Maximum Guaranteed Sum (not exceeding 10.0% of the contract From and including the date of issue of this Guarantee for Construction
sum)  in  the  amount  of: and up to and including the date of issue of the interim payment
certificate  certifying  in  excess  of  50%  of  the  contract  sum

Amount  in  words:

1.1.2   Reducing to the Guaranteed Sum (not exceeding 6.0 % of the From and including the day after the date of the aforesaid interim
contract  sum)  in  the  amount  of: payment certificate and up to and including the date of issue of the only
Certificate of Practical Completion or last Certificate of Practical
Completion  where  there  are  sections

Amount  in  words:

1.1.3 Reducing to the Guaranteed Sum (not exceeding 4.0% of the From and including the day after the date of the applicable Certificate of
contract  sum)  in  the  amount  of: Practical Completion and up to and including the date of issue of the only
Certificate of Final Completion or the last Certifcate of Final Completion
where  there  are  sections
 38

Amount  in  words:

1.1.4 Reducing to the Guaranteed Sum (not exceeding 2.0% of the From and including the day after the date of the applicable Certificate of
contract  sum)  in  the  amount  of: Final Completion and up to and including the date of issue of the Final
Payment Certificate where payment is due to the Contractor, whereafter
this Guarantee for Construction shall expire. Where the Final Payment
Certificate reflects payment due to the Employer this Guarantee for
Construction  shall  expire  upon  payment  of  the  full  amount  certified

Amount  in  words:

1.2 The  Guarantor's  liability  limits  set  out  in  1.1.1  to  1.1.4  shall  apply  in  respect  of  any  claim  received  by  the  Guarantor  during  the  Security  validity  

2.0  GUARANTEE  for  CONSTRUCTION  (Fixed)

2.1 Where a Guarantee for Construction (Fixed) in terms of the Agreement has been selected this clause 2.0 and 3.0 to 13.0 shall apply. The Guarantor’s
liability  shall  be  limited  to  the  amount  of  the  Guaranteed  Sum  as  follows:-­‐

GUARANTOR’S  LIABILITY PERIOD  OF  LIABILITY

Maximum Guaranteed Sum (not exceeding 5,0% of From and including the date of issue of this Guarantee for Construction
the  contract  sum)  in  the  amount  of: and up to and including the date of the only Certificate of Practical
Completion or the last Certificate of Practical Completion where there are
sections,  whereafter  this  Guarantee  for  Construction  shall  expire

Amount  in  words:

3.0 The  Guarantor  acknowledges  that:-­‐

3.1 Any reference in this Guarantee for Construction to the Agreement is made for the purpose of convenience and shall not be
construed  as  any  intention  to  create  an  accessory  obligation  or  any  intention  to  create  a  suretyship

3.2 Its  obligation  under  this  Guarantee  for  Construction  is  restricted  to  the  payment  of  money

3.3 Reference to a recovery statement or an Interim or Final Payment Certificate, or a Certificate(s) of Practical or Final Completion shall
mean  such  certificate  issued  by  the  Principal  Agent

4.0 Subject to the Guarantor’s maximum liability referred to in clauses 1.0 or 2.0 , the Guarantor hereby undertakes to pay the Employer the sum
certified  upon  receipt  of  the  documents  identified  in  4.1  to  4.3:-­‐

4.1 A copy of a first written demand notice issued by the Employer to the Contractor stating that payment of a sum certified by the
Principal Agent in an interim or Final Payment Certificate has not been made in terms of the Agreement and failing such payment
within  seven  (7)  calendar  days,  the  Employer  intends  to  call  upon  the    Guarantor  to  make  payment  in  terms  of  4.2                                

4.2 Afirst written demand notice issued by the Employer to the Guarantor at the Guarantor’s physical address with a copy to the
Contractor stating that a period of seven (7) calendar days has elapsed since the issue of the first written demand notice in terms of
4.1 and that the sum certified has not been paid to date. The Employer herewith calls up this Guarantee for Construction and
demands  payment  of  the  sum  certified  from  the  Guarantor

4.3 A  copy  of  the  applicable  payment  certificate  which  entitles  the  Employer  to  receive  payment  in  terms  of  the  Agreement  of  the  sum  
certified  in  4.0

5.0 Subject to the Guarantor’s maximum liability referred to in 1.0 or 2.0 , the Guarantor undertakes to pay the Employer the Guaranteed Sum or the
full outstanding balance upon receipt of a first written demand notice from the Employer to the Guarantor at the Guarantor's physical address
calling  up  this  Guarantee  for  Construction  stating  that:-­‐

5.1 The Agreement has been terminated due to the Contractor's default and that the Security for Construction is called up in terms of
5.0.  The  demand  notice  shall  enclose  a  copy  of  the  notice  of  termination;  or

5.2 A provisional sequestration or liquidation court order has been granted against the Contractor and that the Guarantee for
Construction  is  called  up  in  terms  of  5.0.  The  demand  notice  shall  enclose  a  copy  of  the  court  order  

6.0 The aggregate amount of payment to be made by the Guarantor in terms of 4.0 and 5.0 shall not exceed the Guarantor's maximum liability in terms
of  1.0  or  2.0

7.0 Where the Guarantor is a registered insurer and has made payment in terms of 5.0, the Employer shall within one hundred and eighty (180)
calendar days of receipt of payment submit an expense account to the Guarantor showing how all monies received in terms of the Guarantee for
Construction have been expended, or will be expended, and shall refund to the Guarantor any surplus amount. All monies refunded to the
Guarantor in terms of this Guarantee for Construction shall bear interest at the prime overdraft rate of the Employer’s bank compounded monthly
and  calculated  from  the  date  of  payment  by  the  Guarantor  to  the  Employer  until  the  date  of  refund  
 39

8.0 Payment by the Guarantor in terms of 4.0 or 5.0 shall be made within seven (7) calendar days upon receipt of the first written demand notice to the
Guarantor

9.0 The Employer shall have the absolute right to arrange his affairs with the Contractor in any manner which the Employer deems fit and the Guarantor
shall  not  have  the  right  to  claim  his  release  from  this  Guarantee  for  Construction  on  account  of  any  conduct  alleged  to  be  prejudicial  to  the  

10.0 The  Guarantor  chooses  the  physical  address  stated  above  for  all  transactions  in  relation  to  this  security

11.0 This Guarantee for Construction is neither negotiable nor transferable and shall expire in terms of either 1.1.4 or 2.1, or on payment in full of the
Guaranteed Sum or on the Security expiry date, whichever is the earlier, where after no claims will be considered by the Guarantor. The original
Guarantee  for  Construction  form  shall  be  returned  to  the  Guarantor  after  it  has  expired

12.0 This Guarantee for Construction, with the required demand notices in terms of 4.0 or 5.0, shall be regarded as a liquid document for the purpose of
obtaining  a  court  order

13.0 Where this Guarantee for Construction is issued in the Republic of South Africa the Guarantor hereby consents to the jurisdiction of a court in the area
where  the  project  is  located  

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC®  Guarantee  for  Construction  PBA  6.0    ©  March  2014

 40

NSSA  Guarantee  for  Construction  

For  use  with  the  JBCC®  NSSA  Subcontract  Agreement   state  edition  /date

GUARANTOR  DETAILS  

Guarantor:

Physical  address:

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Contractor:  

Subcontractor:  

Principal  Agent:

Works:

Site:

Name  of  Signatory:

Contract  Sum: Accepted  amount  inclusive  of  tax Currency

…  amount  in  words:

Guaranteed  Sum: The  maximum  aggregate  amount Currency

…  amount  in  words:

Security  for  Construction (insert  variable  or  fixed)   Expiry  date

AGREEMENT  DETAILS

Sections Total  number  /  not  applicable Last  section

Contractor  issues 'JBCC®  format  Interim  Payment  Advices,  the  Final  Payment  Advice
Principal  Agent  issues 'JBCC® format Interim Payment Certifiates, the Final Payment Certificate, the Certificate(s) of Practical Completion
and  the  Certificate(s)  of  Final  Completion

1.0      GUARANTEE  for  CONSTRUCTION  (Variable)

1.1 Where a NSSA Guarantee for Construction (Variable) in terms of the Agreement has been selected this clause 1.0 and 3.0 to 13.0 shall apply. The
Guarantor’s  liability  shall  be  limited  to  the  diminishing  amounts  of  the  Guaranteed  Sum  as  follows:-­‐

GUARANTOR’S  LIABILITY PERIOD  OF  LIABILITY

1.1.1 Maximum Guaranteed Sum (not exceeding 10.0% of the From and including the date of issue of this NSSA Guarantee for
subcontract  sum)  in  the  amount  of: Construction and up to and including the date of issue of the interim
payment  advices  certifying  in  excess  of  50%  of  the  contract  sum

Amount  in  words:

1.1.2   Reducing to the Guaranteed Sum (not exceeding 6.0 % of the From and including the day after the date of the aforesaid interim
subcontract  sum)  in  the  amount  of: payment advice and up to and including the date of issue of the only
Certificate of Practical Completion or last Certificate of Practical
Completion  where  there  are  sections

Amount  in  words:

1.1.3 Reducing to the Guaranteed Sum (not exceeding 4.0% of the From and including the day after the date of the applicable Certificate of
subcontract  sum)  in  the  amount  of: Practical Completion and up to and including the date of issue of the only
Certificate of Final Completion or the last Certifcate of Final Completion
where  there  are  sections
 41
Amount  in  words:

1.1.4 Reducing to the Guaranteed Sum (not exceeding 2.0% of the From and including the day after the date of the applicable Certificate of
subcontract  sum)  in  the  amount  of: Final Completion and up to and including the date of issue of the Final
Payment Advice where payment is due to the Subcontractor, whereafter
this NSSA Guarantee for Construction shall expire. Where the Final
Payment Certificate reflects payment due to the Contractor this NSSA
Guarantee for Construction shall expire upon payment of the full amount
certified

Amount  in  words:

1.2 The  Guarantor's  liability  limits  set  out  in  1.1.1  to  1.1.4  shall  apply  in  respect  of  any  claim  received  by  the  Guarantor  during  the  Security  validity  
period

2.0  SECURITY  for  CONSTRUCTION  (Fixed)

2.1 Where a NSSA Guarantee for Construction (Fixed) in terms of the Agreement has been selected this clause 2.0 and 3.0 to 13.0 shall apply. The
Guarantor’s  liability  shall  be  limited  to  the  amount  of  the  Guaranteed  Sum  as  follows:-­‐

GUARANTOR’S  LIABILITY PERIOD  OF  LIABILITY

Maximum Guaranteed Sum (not exceeding 5,0% of From and including the date of issue of this NSSA Guarantee for
the  subcontract  sum)  in  the  amount  of: Construction and up to and including the date of the only Certificate of
Practical Completion or the last Certificate of Practical Completion where
there are sections, whereafter this NSSA Guarantee for Construction shall
expire

Amount  in  words:

3.0 The  Guarantor  acknowledges  that:-­‐

3.1 Any reference in this NSSA Guarantee for Construction to the Agreement is made for the purpose of convenience and shall not be
construed  as  any  intention  to  create  an  accessory  obligation  or  any  intention  to  create  a  suretyship

3.2 Its  obligation  under  this  NSSA  Guarantee  for  Construction  is  restricted  to  the  payment  of  money

3.3 Reference  to  a  recovery  statement  or  a  interim  or  final  Payment  Advice  shall  mean  such  advice  issued  by  the  Contractor
Reference to a recovery statement or an Interim or Final Payment Certificate, or a Certificate(s) of Practical or Final Completion shall
mean  such  certificate  issued  by  the  Principal  Agent

4.0 Subject to the Guarantor’s maximum liability referred to in clauses 1.0 or 2.0, the Guarantor undertakes to pay the Contractor the sum certified on
receipt  of  the  documents  identified  in  4.1  to  4.3:-­‐

4.1 A  copy  of  a  first  written  demand  notice  issued  by  the  Contractor  to  the  Subcontractor  stating  that  payment  of  a  sum  certified  by  the  
Principal  Agent  in  an  interim  or  Final  Payment  Certificate  has  not    been  made  in  terms  of  the  Agreement  and  failing  such  payment  
within  seven  (7)  calendar  days,  the  Contractor  intends  to  call  upon  the    Guarantor  to  make  payment  in  terms  of  4.2                                

4.2 A first written demand notice issued by the Contractor to the Guarantor at the Guarantor’s physical address with a copy to the
Subcontractor stating that a period of seven (7) calendar days has elapsed since the issue of the first written demand notice in terms
of 4.1 and that the sum certified has not been paid to date. The Contractor herewith calls up this Guarantee for Construction and
demands  payment  of  the  sum  certified  from  the  Guarantor

4.3 A  copy  of  the  applicable  payment  advice  which  entitles  the  Contractor  to  receive  payment  in  terms  of  the  Agreement  of  the  sum  certified  in  4.0

5.0 Subject to the Guarantor’s maximum liability referred to in 1.0 or 2.0 , the Guarantor undertakes to pay the Contractor the Guaranteed Sum or the
full outstanding balance upon receipt of a first written demand notice from the Contractor to the Guarantor at the Guarantor's physical address
calling  up  this  NSSA  Guarantee  for  Construction  stating  that:-­‐

5.1 The Agreement has been terminated due to the Subcontractor's default and that the NSSA Guarantee for Construction is called up in
terms  of  5.0.  The  demand  notice  shall  enclose  a  copy  of  the  notice  of  termination;  or

5.2 A provisional sequestration or liquidation court order has been granted against the Subcontractor and that the NSSA Guarantee for
Construction  is  called  up  in  terms  of  5.0.  The  demand  notice  shall  enclose  a  copy  of  the  court  order  

6.0 The aggregate amount of payments to be made by the Guarantor in terms of 4.0 and 5.0 shall not exceed the Guarantor's maximum liability in terms
of  1.0  or  2.0

7.0 Where the Guarantor is a registered insurer the Contractor shall within one hundred and twenty (120) calendar days of receipt of payment submit
an expense account to the Guarantor showing how all monies received in terms of the NSSA Guarantee for Construction have been expended, or
will be expended, and shall refund to the Guarantor any surplus amount. All monies refunded to the Guarantor in terms of this NSSA Guarantee for
Construction shall bear interest at the prime overdraft rate of the Contractor’s bank compounded monthly and calculated from the date payment at
the prime overdraft rate of the Contractor’s bank compounded monthly and calculated from the date of payment by the Guarantor to the
Contractor  until  the  date  of  refund
 42

8.0 Payment by the Guarantor in terms of 4.0 or 5.0 shall be made within seven (7) calendar days upon receipt of the first written demand notice to the
Guarantor

9.0 The Contractor shall have the absolute right to arrange his affairs with the Subcontractor in any manner which the Contractor deems fit and the
Guarantor shall not have the right to claim his release from this NSSA Guarantee for Construction on account of any conduct alleged to be prejudicial
to  the  Guarantor

10.0 The  Guarantor  chooses  the  physical  address  stated  above  for  all  transactions  in  connection  with  this  Security

11.0 This NSSA Guarantee for Construction is neither negotiable nor transferable and shall expire in terms of either 1.1.4 or 2.1, or payment in full of the
Guaranteed Sum or on the Security expiry date, whichever is the earlier, whereafter no claims will be considered by the Guarantor. The original
NSSA  Guarantee  for  Construction  form  shall  be  returned  to  the  Guarantor  after  it  has  expired

12.0 This NSSA Guarantee for Construction, with the required demand notices in terms of 4.0 or 5.0, shall be regarded as a liquid document for the
purpose  of  obtaining  a  court  order

13.0 Where this NSSA Guarantee for Payment is issued in the Republic of South Africa the Guarantor hereby consents to the jurisdiction of a court in the
area  where  the  project  is  located  

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC®  Guarantee  for  Construction  NSSA  6.0    ©  March  2014

 43

MWA  Guarantee  for  Construction  (variable)

For  use  with  the  JBCC®  Minor  Works  Agreement state  edition  /date

GUARANTOR  DETAILS  

Guarantor:

Physical  address:

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Employer:

Contractor:

Principal  Agent:

Works:

Site:

Name  of  Signatory:

Contract  Sum: Accepted  amount  inclusive  of  tax Currency

…  amount  in  words:

Guaranteed  Sum: The  maximum  aggregate  amount Currency

…  amount  in  words:

Security  expiry  date:

AGREEMENT  DETAILS
Agent  issues JBCC® format Payment Certificates, Final Payment Certificate, Certificate of Practical Completion and
Certificate  of  Final  Completion

1.0 The  Guarantor’s  liability  shall  be  limited  to  the  diminishing  amounts  of  the  Guaranteed  Sum  as  follows:

GUARANTOR’S  LIABILITY PERIOD  OF  LIABILITY

1.1.1 Maximum Guaranteed Sum (not exceeding 6.0% of the contract From and including the date of issue of this MWA Guarantee for
sum)  in  the  amount  of:
Construction and up to and including the date of practical
completion

Amount  in  words:

1.1.2   Reducing to the Guaranteed Sum (not exceeding 4.0% of the From and including the day after the date of the Certificate of
contract  sum)  in  the  amount  of: Practical Completion and up to and including the date of the
Certificate  of  Final  Completion  

Amount  in  words:

1.1.3 Reducing to the Guaranteed Sum (not exceeding 2.0% of the From and including the day after the date of the Certificate of
contract  sum)  in  the  amount  of: Final Completion and up to and including the date of issue of the
Final Payment Certificate where payment is due to the
Contractor, whereupon this MWA Guarantee for Construction
shall expire. Where the Final Payment Certificate reflects
payment due to the Employer, this MWA Guarantee for
Construction  shall  expire  on  payment  of  the  full  amount  certified

Amount  in  words:

 44

2.0 The Guarantor's liability limits set out in clauses 1.1 to 1.3 shall apply in respect of any claim received by the Guarantor during the security
validity  period

3.0 The  Guarantor  hereby  acknowledges  that:

3.1 Any reference in this MWA Guarantee to the Agreement is made for the purpose of convenience and shall not be construed
as  any  intention  whatsoever  to  create  an  accessory  obligation  or  any  intention  whatsoever  to  create  a  suretyship

3.2 Its  obligation  under  this  Security  is  restricted  to  the  payment  of  money

3.3 Reference to a Certificate of Practical Completion or to a Certificate of Final Completion shall mean such certificate as issued
by  the  Agent

4.0 Subject to the Guarantor’s maximum liability referred to in 1.0, the Guarantor hereby undertakes to pay the Employer the sum certified
upon  receipt  of  the  documents  identified  in  4.1  to  4.3:

4.1 A copy of a first written demand notice issued by the Employer to the Contractor stating that payment of a sum certified by
the Principal Agent has not been made in terms of the Agreement and failing such payment within seven (7) calendar days,
the  Employer  intends  to  call  upon  the    Guarantor  to  make  payment  in  terms  of  4.2                                

4.2 A first written demand notice issued by the Employer to the Guarantor at the Guarantor’s physical address with a copy to the
Contractor stating that a period of seven (7) calendar days has elapsed since the date of issue of the first written demand
notice in terms of 4.1 and that the sum certified has still not been paid to date. The Employer herewith calls up this MWA
Guarantee  for  Construction  and  demands  payment  of  the  sum  certified  from  the  Guarantor

4.3 A  copy  of  the  applicable  payment  certificate  which  entitles  the  Employer  to  receive  payment  in  terms  of  the  Agreement  of  the  sum  certified  

5.0 Subject to the Guarantor’s maximum liability referred to in 1.0, the Guarantor undertakes to pay the Employer the Guaranteed Sum or the
full outstanding balance upon receipt of a first written demand from the Employer to the Guarantor at the Guarantor's physical address
calling  up  this  MWA  Guarantee  for  Construction  stating  that:

5.1 The Agreement has been terminated due to the Contractor's default and that the MWA Guarantee for Construction is called
up in terms of 5.0. The demand notice shall enclose a copy of the notice of termination; or called up in terms of 5.0. The
demand  notice  shall  enclose  a  copy  of  the  notice  of  termination;  or

5.2 A provisional sequestration or liquidation court order has been granted against the Contractor and that the MWA Guarantee  
for  Construction    is  called  up  in  terms  of  5.0.  The  demand  notice  shall  enclose  a  copy  of  the  court  order

6.0 It is recorded that the aggregate amount of payments required to be made by the Guarantor in terms of 4.0 and 5.0 shall not exceed the
Guarantor's  maximum  liability  in  terms  of  1.0

7.0 Where the Guarantor is a registered insurer and has made payment in terms of 5.0, the Employer shall within one hundred and twenty (120)
calendar days of receipt of payment submit an expense account to the Guarantor showing how all monies received in terms of this MWA
Guarantee for Construction have been expended or will be expended, and shall refund to the Guarantor any resulting surplus. All monies
refunded  to  the  Guarantor  in  terms  of  this  MWA  Guarantee  for  Construction  shall  bear  interest  at  the  prime  overdraft  rate  of  the  Employer’s  
bank compounded monthly and calculated from the date payment at the prime overdraft rate of the Employer’s bank compounded monthly
and  calculated  from  the  date  of  payment  by  the  Guarantor  to  the  Employer  until  the  date  of  refund

8.0 Payment by the Guarantor in terms of 4.0 or 5.0 shall be made within seven (7) calendar days upon receipt of the first written demand
notice  to  the  Guarantor

9.0 The Employer shall have the absolute right to arrange his affairs with the Contractor in any manner which the Employer deems fit and the
Guarantor shall not have the right to claim his release from this MWA Guarantee for Construction on account of any conduct alleged to be
prejudicial  to  the  Guarantor

10.0 The  Guarantor  chooses  the  physical  address  as  stated  above  for  all  purposes  in  connection  herewith

11.0 This MWA Guarantee for Construction is neither negotiable nor transferable and shall expire in terms of either 1.3, or payment in full of the
Guaranteed Sum or on the Guarantee expiry date, whichever is the earlier, where after no claims will be considered by the Guarantor. The
original  of  this  MWA  Guarantee  for  Construction  form  shall  be  returned  to  the  Guarantor  after  it  has  expired

12.0 This MWA Guarantee for Construction, with the required demand notices in terms of 4.0 or 5.0, shall be regarded as a liquid document for
the  purpose  of  obtaining  a  court  order

13.0 Where this MWA Guarantee for Construction is issued in the Republic of South Africa the Guarantor hereby consents to the jurisdiction of a
court  in  the  area  where  the  project  is  located

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC  Guarantee  for  Construction  MWA    ©  March  2014

 45

Guarantee  for  Payment

For  use  with  the  JBCC®  Principal  Building  Agreement state  edition  /date

GUARANTOR  DETAILS  AND  DEFINITIONS

Guarantor:  

Physical  address:

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Employer:  

Contractor:  

Principal  Agent:  

Works:  

Site:  

Contract  Sum:   Accepted  amount  inclusive  of  tax Currency

…  amount  in  words:

Guaranteed  Sum: Currency

…  amount  in  words:

Security  expiry  date:

AGREEMENT  DETAILS
Principal  Agent  issues JBCC®  format    Interim  Payment  Certificates  and  a  Final  Payment  Certificate

1.0     The  Guarantor  acknowledges  that:-­‐

1.1 Any reference in this Guarantee for Payment to the Agreement is made for the purpose of convenience and shall not be construed
as  any  intention  to  create  an  accessory  obligation  or  any  intention  to  create  a  suretyship

1.2 Its  obligation  under  this  Guarantee  for  Payment  is  restricted  to  the  payment  of  money

1.3 Reference to a Certificate of Practical Completion or to a Certificate of Final Completion shall mean such certificate issued by the
Principal  Agent

2.0 Subject to the Guarantor’s maximum liability in terms of the Guaranteed Sum, the Guarantor undertakes to pay the Contractor the sum
certified  upon  receipt  of  the  documents  identified  in  2.1  to  2.3:-­‐

2.1 A copy of a first written demand notice issued by the Contractor to the Employer stating that payment of a sum certified by the
Principal Agent has not been made in terms of the Agreement and failing such payment within seven (7) calendar days, the
Contractor  intends  to  call  upon  the  Guarantor  to  make  payment  in  terms  of  2.2

2.2 A first written demand notice issued by the Contractor to the Guarantor at the Guarantor's physical address with a copy to the
Employer stating that a period of seven (7) calendar days has elapsed since the date of issue of the first written demand notice in
terms of 2.1 and that the sum certified has not been paid to date. The Contractor herewith calls up this Guarantee for Payment and
demands  payment  of  the  sum  certified  from  the  Guarantor

2.3 A  copy  of  the  payment  certificate  which  entitles  the  Contractor  to  receive  payment  in  terms  of  the  Agreement  of  the  sum  certified  
in  2.0

3.0 Subject  to  the  Guarantor’s  maximum  liability  in  terms  of  the  Guaranteed  Sum,  the  Guarantor  hereby  undertakes  to  pay  the  Contractor  the  
demanded  sum  upon  the  receipt  of  the  documents  identified  in  3.1  and  3.2:-­‐
 46

3.1 A copy of a first written demand notice issued by the Contractor to the Employer stating that the Contractor demands the issue of a
payment certificate and failing such issue within seven (7) calendar days, the Contractor intends to call upon the Guarantor to make
payment  in  terms  of  3.2  of  the  demanded  sum  as  set  out  in  the  demand

3.2 A first written demand notice issued by the Contractor to the Guarantor at the Guarantor's physical address with a copy to the
Employer stating that a period of seven (7) calendar days has elapsed since the issue of a first written demand notice in terms of 3.1
and that a payment certificate has still not been issued. The Contractor herewith calls up this Guarantee for Payment and demands
payment  of  the  demanded  sum  from  the  Guarantor

4.0 The  aggregate  amount  of  payments  to  be  made  by  the  Guarantor  in  terms  of  2.0  and  3.0  shall  not  exceed  the  Guaranteed  Sum

5.0 Where the Guarantor is a registered insurer and has made payment in terms of 3.0, the Contractor shall within one hundred and eighty
(180) calendar days of receipt of payment submit an expense account to the Guarantor showing how all monies received in terms of the
Guarantee for Payment have been expended, or will be expended, and shall refund to the Guarantor any surplus amount. All monies
refunded to the Guarantor in terms of this Guarantee for Payment shall bear interest at the prime overdraft rate of the Contractor’s bank
compounded  monthly  and  calculated  from  the  date  of  payment  by  the  Guarantor  to  the  Contractor  until  the  date  of  refund

6.0 The Guarantor shall make payment in terms of 2.0 or 3.0 within seven (7) calendar days of receipt of the first written demand notice to the
Guarantor

7.0 The Contractor shall have the absolute right to arrange his affairs with the Employer in any manner which he deems fit and the Guarantor
shall  not  have  the  right  to  claim  his  release  on  account  of  any  conduct  alleged  to  be  prejudicial  to  the  Guarantor

8.0 The  Guarantor  chooses  the  physical  address  stated  above  for  all  transactions  in  connection  with  this  Security

9.0 This Guarantee for Payment is neither negotiable nor transferable and shall expire upon payment of the final payment certificate in terms
of the Agreement or on payment in full of the Guaranteed Sum or on the Security expiry date, whichever is the earlier, whereafter no
claims  will  be  considered  by  the  Guarantor.  The  original  Guarantee  for  Payment  form  shall  be  returned  to  the  Guarantor  after  it  has  expired

10.0 This Guarantee for Payment, with the required demand notices in terms of 2.0 or 3.0, shall be regarded as a liquid document for the
purpose  of  obtaining  a  court  order

11.0 Where this Guarantee for Payment is issued in the Republic of South Africa the Guarantor hereby consents to the jurisdiction of a court in  
the  area  where  the  project  is  located  

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC®  Guarantee  for  Payment  PBA  /  MWA    ©  March  2014

 47

NSSA  Guarantee  for  Payment

For  use  with  the  JBCC®  NSSA  Subcontract  Agreement state  edition  /date

GUARANTOR  DETAILS

Guarantor:

Physical  address:

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Employer:

Contractor:

Subcontractor:

Principal  Agent:

N/S  Works:

Site:

Subcontract  Sum: Accepted  amount  inclusive  of  tax   Currency

…  amount  in  words:

Guaranteed  Sum: Currency

…  amount  in  words:

Security  expiry  date:

AGREEMENT  DETAILS
Contractor  issues JBCC®  format  Payment  Advice  and  a  Final  Payment  Advice

1.0     The  Guarantor  acknowledges  that:-­‐

1.1 Any reference in this NSSA Guarantee for Payment to the Agreement is made for the purpose of convenience and shall not be
construed  as  any  intention  to  create  an  accessory  obligation  or  any  intention  to  create  a  suretyship

1.2 Its  obligation  under  this  NSSA  Guarantee  for  Payment  is  restricted  to  the  payment  of  money

1.3 Reference  to  a  Payment  Advice  or  a  final  Payment  Advice  shall  mean  such  advice  issued  by  the  Contractor

2.0 Subject to the Guarantor’s maximum liability in terms of the Guaranteed Sum, the Guarantor undertakes to pay the Subcontractor the sum
certified  upon  receipt  of  the  documents  identified  in  2.1  to  2.3:-­‐

2.1 A copy of a first written demand notice issued by the Subcontractor to the Contractor stating that payment of a sum certified in the
payment  advice  statement  has  not  been  made  in  terms  of  the  Agreement  and  that:-­‐

2.1.1 The Contractor has failed to notify the Subcontractor of payment default by the Employer and has failed to make payment to
the  Subcontractor  within  seven  (7)  calendar  days  after  due  date  for  payment  to  the  Contractor  by  the  Employer;  or

2.1.2 The Contractor has received timeous payment from the Employer and has failed to make payment to the Subcontractor
within  seven  (7)  calendar  days  after  due  date  for  payment  to  the  Contractor  by  the  Employer;  or

2.1.3 The Contractor has received late payment from the Employer and has failed to make payment to the Subcontractor within
seven  (7)  calendar  days  of  the  Contractor  receiving  payment  from  the  Employer;  or

2.1.4 The Contractor has failed to pay to the Subcontractor within thirty (30) calendar days after the due date for payment to the
Contractor by the Employer and failing payment of the sum certified by the Contractor in the payment advice statement
within  seven  (7)  calendar  days,  the  Subcontractor  intends  to  call  upon  the  Guarantor  to  make  payment  in  terms  of  2.2
 48

2.2 A first written demand notice issued by the Subcontractor to the Guarantor at the Guarantor's physical address with a copy to the
Contractor stating that a period of seven (7) calendar days has elapsed since date of issue of the the first written demand notice in
terms of 2.1 and that the sum certified has not been paid to date. The Subcontractor herewith calls up this NSSA Guarantee for
Payment  and  demands  payment  of  the  sum  certified  from  the  Guarantor

2.3 A copy of the payment advice statement issued by the Contractor and which entitles the Subcontractor to receive payment of the
sum  certified  in  2.0

3.0 Subject to the Guarantor’s maximum liability in terms of the Guaranteed Sum, the Guarantor hereby undertakes to pay the Subcontractor
the  demanded  sum  upon  the  receipt  of  the  documents  identified  in  3.1  and  3.2:-­‐

3.1 A copy of a first written demand notice issued by the Subcontractor to the Contractor stating that the Subcontractor demands the
issue of a payment advice statement and failing such issue within seven (7) calendar days, the Subcontractor intends to call upon the
Guarantor  to  make  payment  in  terms  of  3.2  of  the  sum  as  set  out  in  the  demand

3.2 A written demand notice issued by the Subcontractor to the Guarantor at the Guarantor's physical address with a copy to the
Contractor stating that a period of seven (7) calendar days has elapsed since the issue of a first written demand notice in terms of
3.1 and that a payment advice statement has not been issued. The Subcontractor herewith calls up this NSSA Guarantee for Payment
and  demands  payment  of  the  sum  as  set  out  in  the  demand  from  the  Guarantor

4.0 The  aggregate  amount  of  payments  to  be  made  by  the  Guarantor  in  terms  of  2.0  and  3.0  shall  not  exceed  the  Guaranteed  Sum

5.0 Where the Guarantor is a registered insurer the Subcontractor shall within one hundred and twenty (120) calendar days of receipt of
payment submit an expense account to the Guarantor showing how all monies received in terms of the NSSA Guarantee for Payment have
been expended, or will be expended, and shall refund to the Guarantor any surplus amount. All monies refunded to the Guarantor in terms
of this NSSA Guarantee for Payment shall bear interest at the prime overdraft rate of the Subcontractor’s bank compounded monthly and
calculated  from  the  date  of  payment  by  the  Guarantor  to  the  Subcontractor  until  the  date  of  refund

6.0 Payment by the Guarantor in terms of 2.0 or 3.0 shall be made within seven (7) calendar days upon receipt of the first written demand
notice  to  the  Guarantor

7.0 The Subcontractor shall have the absolute right to arrange his affairs with the Contractor in any manner which he deems fit and the
Guarantor  shall  not  have  the  right  to  claim  his  release  on  account  of  any  conduct  alleged  to  be  prejudicial  to  the  Guarantor

8.0 The  Guarantor  chooses  the  physical  address  stated  above  for  all  transactions  in  connection  with  this  Security

9.0 This NSSA Guarantee for Payment is neither negotiable nor transferable and shall expire upon payment of the final payment advice in terms
of the Agreement or on payment in full of the Guaranteed Sum or on the Security expiry date, whichever is the earlier, whereafter no claims
will  be  considered  by  the  Guarantor.  The  original  NSSA  Guarantee  for  Payment  form  shall  be  returned  to  the  Guarantor  after  it  has  expired

10.0 This NSSA Guarantee for Payment, with the required demand notices in terms of 2.0 or 3.0, shall be regarded as a liquid document for the
purpose  of  obtaining  a  court  order

11.0 Where this NSSA Guarantee for Payment is issued in the Republic of South Africa the Guarantor hereby consents to the jurisdiction of a
court  in  the  area  where  the  project  is  located  

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC®  Guarantee  for  Payment  NSSA    ©  March  2014

 49

!9.0 CONTRACTUAL CLAIMS – also applicable to insurance and security clauses, may apply on termination
!
!
9.1 DEFINITION

Claim – a formal request for compensation by either contracting party, evaluated by the principal agent

!
(provided notice of a potential claim is given and the substantiated claim is submitted within the prescribed periods)

Dispute - an unresolved disagreement between the contacting parties (or a claim) involving an independent entity to guide

!
the process or to adjudicate such claim – not the principal agent!

!
9.2 PROCESS – (SUB)CONTRACTOR

Give notice of a potential (time) claim P6.0 Cl 23.1-3; Cl 23.4.2= 20 W-days; N6.0 Cl 23.1-3; Cl 23.4.2= 20 W-days
Give notice of a potential (money) claim P6.0 Cl 26.1-4; Cl 26.5= 20 W-days; N6.0 Cl 26.1-4; Cl 26.5= 20 W-days

Other clauses (M5.0 Cl 17.3)

2.1 (M 2.1) Non compliance with the law
6.2 (M 5.4) Agents not appointed
6.5 (M 5.5) Replacement agent not appointed
7.0 (M 7.0) Acceptance of a design by a specialist subcontractor
10.3-7/12.1.7 (M 8.3) Insurances not effected
12.1.2-6 (M12.0) Site restrictions / possession of site
12.1.8 (M10.1.10) make payment (regular + advance)
12.1.11 (M10.1.13) supply free issue to the (sub)contractor
14.6 - default of a nominated subcontractor
16.1.3 ((M13.0) default of a direct contractor
17.1 (M14.0) PA not issue a contract instruction
19.3 (M15.4) PA not issue a certificate of practical completion
25.12 (M19.10) partial / non-payment of an issued payment certificate
28 (M19.10.1) Suspension + resumption of work = payment/insurance/security

The (sub)contractor gives notice to the employer (contractor) and/or the principal agent to inter alia consider the event /

!
evaluate design and execution options etc to complete the project within the construction period and budget

contractor submits a substantiated (time) claim P6.0 Cl 23.1-3; 23.4.2= Cl 23.5= 40 W-days M5.0 Cl 17.1-3
subcontractor submits a substantiated (time) claim N6.0 Cl 23.1-3; 23.4.2= Cl 23.5= 20 W-days
contractor submits a substantiated (money) claim P6.0 Cl 26.1-4; 26.5= Cl 26.6= 40 W-days M5.0 Cl 20.4-5

!
subcontractor submits a substantiated (money) claim N6.0 Cl 26.1-4; 26.5= Cl 26.6= 15 W-days

The contractor motivates the claim using site records, if applicable – stating briefly:-
▪ The ‘problem’ (refer to “records”)
▪ The root cause – identify events / entities responsible for act / omission
▪ Single / multiple events > identify dominant cause (isolate + quantify the effect of each cause)
▪ Separate events due to the (sub)contractor’s inefficiency from employer obligations
▪ The effect - on the (revised) date for practical completion … events that impact directly on scheduled completion
date
▪ The effect - adjustment of the contract value
▪ Options explored – preventative measures
▪ Effect on (original) critical path on revised programme

!
▪ Other consequences

Refer to the programme:

▪ Delayed site handover / instructions to stop-and-resume work
▪ Late specification / delivery of materials / facilities / samples / free issue or similar
▪ Suspension = employer default
▪ Agents respond late / (not) issue a contract instruction
▪ Late acceptance of design
▪ Late appointment of nominated subcontractors / direct contractors
▪ Delayed tests / results
▪ Weather … show direct effect on works
▪ Force majeure
▪ Highlight issues an experienced contractor would not anticipated
o Scope: Instruction to vary quantity / quality / sequence of work
o Discrepancies in documentation
o Work requiring additional equipment / safety etc
o Faulty free issue
o Site information - Assumptions not realised
o Adverse physical conditions (excavations + foundations)
o Natural occurrences – fossils etc
o Omissions

!
Note: Where the employer occupies the works before practical completion some of the criteria listed may apply

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 50

!
!
9.3

▪
PROCESS – PRINCIPAL AGENT

PA may request additional information where the submission is not clear / ask for a quotation
▪ PA (Cl 23.0 and 26.0) must grant in full, reduce or refuse a claim and determine the revised date for practical
completion and adjust the contract value with reasons using essentially the same headings …

!
▪

▪
No decision by the PA within specified time period, the contractor may give notice of a disagreement (Cl 30.1)

Note: The construction period in an existing agreement can not be shortened by issuing a contract
instruction – this implies ‘acceleration’ with the associated reprogramming, reallocating resources etc –
for which the contractor must be compensated
▪ Note: Reprogramming the works as a result of contract instructions may not necessarily lengthen the

! construction period but may require other / additional resources attracting additional costs

▪
!
The PA may certify partial payment for a claim in an interim payment certificate for resolved items

The PA may create a ‘final account‘ for the event – and pay such amount in full, in an interim payment certificate
!!
!
….. work as a team!

!
9.4 PRELIMINARIES

Where a project is divided into sections for completion at different times before the date for practical completion for
the works as a whole the parties should agree an allocation of preliminaries per section to facilitate valuation of
payment certificates and calculation of adjustments to the contract value later
!!
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©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 51

!10.0 STATUS REPORT

!
10.1 DEFINITION (repeated)
A report compiled by the principal agent and/or agents (and the [sub]contractor) in the event of termination of
the agreement, or where the works has been suspended due to a force majeure event, or in the event of
termination of the n/s subcontract agreement by the contractor, to record the state of completion or otherwise
of the works or the n/s subcontract works, as the case may be. Such status report may include marked up

!
10.2
drawings and photographs

BACKGROUND
The concept has been hidden away in previous editions of JBBC® agreements under the interpretation heading
of duties to be carried out in writing. In practice it is an essential administration tool where status of an agreement
changes where:
▪ The employer sells a project and another employer takes over to record work done, payments earned and
items not completed
▪ Either party terminates the agreement
▪ Both parties decide to terminate an agreement
!
10.3 PROCESS
The principal agent in cooperation with other agents and the contractor and subcontractors assemble all
information pertaining to the project. The information required is similar to the requirements to submit a claim (§

! 9.0)

! Determine:

▪ The nature of the change of status of the project = termination, sale of the project, or other reason(s)
▪ The effective date when the status of the project changed
▪ Immediate actions – stop work but make the site safe in terms of the Health and Safety requirements, and /

!! ▪ or suspend work until the status of the work can be assessed and quantified to produce the final account

!
Assess progress:-

▪ Is the contractor on time in terms of the programme?

▪ Is the contractor entitled to a revision of the date for practical completion?
▪ If yes - why?:-
▪ The ‘problem’ (refer to “records”)
▪ The root cause – identify events / entities responsible for act / omission
▪ Single / multiple events > identify dominant cause (isolate + quantify the effect of each cause)
▪ Delayed site handover / instructions to stop-and-resume work
▪ Late specification / delivery of materials / facilities / samples / free issue or similar
▪ Separate events due to the (sub)contractor ’s inefficiency from employer obligations
▪ Agents respond late / (not) issue a contract instruction
▪ Late acceptance of design
▪ Late appointment of nominated subcontractors / direct contractors
▪ Delayed tests / results
▪ Weather … show direct effect on works
▪ Force majeure
▪ Highlight issues an experienced contractor would not anticipated
▪ Scope / instruction to vary quantity / quality / sequence of work
▪ Discrepancies in documentation
▪ Work requiring additional equipment / safety etc
▪ Faulty free issue
▪ Site information - Assumptions not realised
▪ Adverse physical conditions (excavations + foundations)
▪ Natural occurrences – fossils etc

! ▪ Omissions

Assess payments / criteria for adjustment of the contract value:

▪ Compare interim payments up to the date of the status report with draft final account
▪ Identify expense and/or loss the contractor may have incurred
▪ Options explored – preventative measures … additional security or safety requirements

!! ▪ Other consequences … penalties / damages that may apply

Additional information:

Mark up drawings to highlight completed work / defective work / work that may be late in terms of the programme

!!
Provide photographs (with a date) of virtually everything – may be needed later if disagreements arise

!
©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 52

!
11.0 INTEREST CALCULATIONS (compensatory and default interest)
!
11.1 PRACTICAL COMPLETION
▪ **Compensatory interest only applies to payment certificates issued 31 calendar days after practical
completion in the PBA only!

!
11.2.
▪ Default interest applies to late payment of any payment certificate - applicable to the PBA, NSSA and MWA

FINAL COMPLETION

!
11.3
▪ At least 3 interim payment certificates must be issued before the issue of the final payment certificate

PAYMENT CERTIFICATE 11
▪ The first payment certificate after practical completion (say 15 calendar days) attracts no compensatory
interest

!
11.4
▪ The employer makes payment of the certified amount

PAYMENT CERTIFICATE 12
▪ Compensatory interest over 15+30 = 45 calendar days included in payment certificate shown in the
recovery statement

!
11.5
▪ The employer makes payment of the certified amount

PAYMENT CERTIFICATE 13
▪ Compensatory interest for 75 calendar days included
▪ The employer pays certificate number 13 twenty one (21) calendar days after issue date. The first fourteen
(14) calendar days is the employer’s “payment window”. The further seven (7) calendar days attracts
default interest
▪ Should the employer pay the certified amount + the default interest i.e. the “debt due” no further default
interest applies
▪ Should the employer pay only the certified amount further default interest of 2 calendar days would apply to
the
“unpaid balance” and must be included in the next recovery statement
▪ With the employer’s concurrence, the default interest on the “unpaid balance” should be calculated up to the

!
11.6
next expected payment date viz 9+7 = 16 calendar days thereby extinguishing the default

PAYMENT CERTIFICATE 14
▪ The employer meets payment requirements without 11.5 inclusion

!
11.7
▪ Should 9.5 not have been applied the “unpaid balance” default interest as per 11.5 would again apply

PAYMENT CERTIFICATE 15
▪ Should final completion and acceptance of the final account not be achieved in ninety (90) calendar days
further interim payment certificates must be issued to maintain the “payment cycle”
▪ The final payment certificate also attracts compensatory interest (PBA only). Should the final payment

!
11.8
certificate be paid late default interest is due and is recoverable by the contractor as a debt

COMPENSATORY INTEREST CALCULATION

Assumptions:
• Interest rate (Repo/Bank rate- February 2014) = 5.5% (see interest definition)
• Net amount certified = 20 000.00
• Certificate No 12 issued after Practical Completion = 45 calendar days

!
11.9
Calculation: 20 000 x 5.5% x 45 / 365

DEFAULT INTEREST CALCULATION

= 135.62

Assumptions:
• Interest rate (Repo + 6.0%) = 5.5% + 6.0% (see interest definition)
• Certificate No 3 payment due = 91 200.00
• Payment made after Certificate issue date = 21 calendar days
• Employer (21-14) calendar day default pay period = 7 calendar days (see 11.5.2 above)
• Balance of payment cycle = 9 calendar days
• Next Employer payment (expected) = 14 calendar days
Calculation: 91 200 x 11.5% x 7 / 365 = 201.14
* Assuming the employer makes payment of the certificate amount only:
Add: 201.14 x 11.5% x 9 / 365 = 0.57 (see 11.5.4 above)
Total default interest due at end of payment cycle = 201.71
* Additional interest to expected employer payment date
Add: 201.71 x 11.5% x 14 / 365 = 1.02 (see 11.5.5 above)

! Total default interest paid = 202.73

!
11.10 COMPENSATORY AND DEFAULT INTEREST – ASSUMPTIONS

1 Each payment certificate issued reflects an amount in favour of the contractor

2 The contractor's “payment cycle'' is a constant 30 calendar days = same day(date) every month stated [CD]
3 Default periods given are for demonstration purposes only

!
** Compensatory interest only applies in the JBCC® Principal Building Agreement

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
DATE  -­‐  comple6on    PRACTICAL
Compensatory  and  default  
53
interest  calcula-ons  
applicable  to  JBCC  Building  Agreements

DATE  -­‐  comple6on    FINAL

Payment  cycle Payment  cycle Payment  cycle Payment  cycle
30  calendar  days 30  calendar  days 30  calendar  days 30  calendar  days

Pay  within  
C11
14  C  days if  paid  late  =    
Def  interest

Pay  within  
C12 14  C  days if  paid  late  =    
Def  interest
ONLY  applicable  to  PBA
compensatory
 interest Pay  within  
C13 14  C  days if  paid  late  =    
30+15  =  45  C  days
Def  interest
ONLY  applicable  to  PBA
compensatory
 interest Pay  within  
C14 14  C  days
30+30+15  =  75  C  days if  paid  late  =    
Def  interest
 54

!
12.0 RECOVERY STATEMENT (PBA)
!
!
12.1 PURPOSE

The recovery statement deals with financial transactions between the employer and the contractor that do not affect the
contract value and are therefore not part of the valuation of work in progress or the final account. Such transactions can
occur at any time during the construction period. The amounts due to either party are determined by the principal agent
on a monthly basis, and are included in the payment certificate issued at that time. Documentation substantiating the
amounts due must accompany the recovery statement. By dealing with these transactions as they occur and not at the end

!
of the contract considerable administrative frustration is avoided

!
12.2

Column A
THE STATEMENT

Total Amount to be recovered

!
Column B
All amounts as determined by the principal agent are accounted for on an accumulative basis

Less Previously recovered

!
Column C
Previously determined accumulative amounts are accounted for

Recovered this Period

The difference between the column A and B subtotal amounts are carried to the referenced item in the

! payment certificate

!
12.3 AMOUNTS DUE TO THE EMPLOYER

There are ten conditions not related to the contract value that the employer may recover from the contractor. These are:
▪ The first seven (1.1.1-7) are grouped together as they impact on the tax on the certified contract value
▪ Penalties due (1.2) are accounted for before tax but are separated for clarity purposes
▪ Default interest (1.3.1) is tax neutral and is accounted for after tax

! ▪ Advance payment recoupment (1.3.2) is accounted for after tax

!
12.4 AMOUNTS DUE TO THE CONTRACTOR

There are only four conditions that the contractor may recover from the employer. These are:
▪ Compensatory (2.1.1) and default interest (2.1.2) amounts, which are both tax neutral, and accounted for after
tax
▪ Advance payment received (2.1.3) is accounted for after tax

! ▪ Damages (2.2) are accounted for before tax

!
12.5 IMPORTANT NOTES

A recovery statement must be issued simultaneously with each payment certificate

▪ All recovery amounts are dealt with on a “before tax” basis - where applicable tax is added in the payment
certificate
▪ Each amount to be recovered is identified by a payment certificate reference line - only the amount in column

! C is transferred to that location

12.6 ADVANCE PAYMENT ADMINISTRATION

!!
See Page 66

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©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 55
®
Recovery Statement Certificate No: PA certificate 11
issued in terms of Clause 27.0 of the
Principal Building Agreement Edition 6.1 © March 2014 Date of Certificate: 201?-02-07

Employer

Contractor

Works

Site

The following amounts, detailed in supplementary documentation where required, are recovered in the current Payment Certificate
A B C
TOTAL AMOUNT LESS PREVIOUS RECOVERY
TO BE RECOVERED RECOVERY THIS PERIOD
1.0 AMOUNTS DUE TO THE EMPLOYER

1.1.1 Effecting insurances, or paying charges [27.2.2] 0.00 0.00

1.1.2 Work executed by others [27.2.3] 0.00 0.00

1.1.3 Termination of a n/s subcontract agreement [ 27.2.8] 0.00 0.00

1.1.4 Contractor not paying the employer an amount due [27.2.5 ] 0.00 0.00

1.1.5 Termination of the agreement [ 27.2.6] 0.00 0.00

1.1.6 Default by the contractor [27.2.9] 0.00 0.00

1.1.7 Direct payments to a subcontractor [27.2.8] 10 000.00 10 000.00

Subtotal of 1.1 [10.1] 10 000.00 10 000.00 0.00

1.2 Penalties levied [27.1.1] [10.2] 0.00 0.00

Subtotal of 1.2 [10.1] 0.00 0.00 0.00

1.3.1 Default interest [27.1.2; 27.2.5; 25.8] 0.00 0.00

1.3.2 Recoupment from contractor of an advance payment [ 27.2.4] 40 000.00 0.00

Subtotal of 1.3 [13.1] 40 000.00 0.00 40 000.00

2.0 AMOUNTS DUE TO THE CONTRACTOR

2.1.1 Compensatory interest [27.1.4] 0.00 0.00

2.1.2 Default interest [27.1.5] 648.85 0.00

2.1.3 Advance payment made [27.1.7] 350 000.00 200 000.00

Subtotal of 2.1 [13.2] 350 648.85 200 000.00 150 648.85

2.2 Damages [27.1.6] [10.3] 0.00 0.00 0.00

Currency ZAR Note: all amounts exclude tax

Signature Date: 201?-02-07

Signed by the principal agent who, as agent for the employer, certifies that
Name and address of the principal agent's practice
the amounts stated above are included in the current payment certificate
JBCC® PBA Edition 6.1 RECOVERY STATEMENT © March 2014
 56

!13.0 INTERIM PAYMENT CERTIFICATE (PBA)

!
!
13.1 PURPOSE

An amount of money that is due and payable by the employer to the contractor or vice versa is ‘certified’ in a payment
certificate issued by the principal agent. Liquidity is conferred where the employer (the debtor), by the signature of the
principal agent, acknowledges his indebtedness to the contractor for a determined sum of money. The wording must be
correct – specifying the employer, principal agent and the contractor and the payment amount that is due to the
contractor. Payment due to the employer is provided for in the agreement and the payment certificate form but is not a

!
liquid document!

!
13.2 THE PAYMENT CERTIFICATE

!
Column A Contract Sum The contract sum i.t.o. the agreement remains fixed for the duration of the contract

Column B Current Contract Value The totals of Columns A and B give an immediate comparison between the contract
sum and contract value at the time of issue of the payment certificate. The quantity
surveyor, where appointed, determines the adjustments to the contract value for

! approval by the principal agent

!
Column C Current Valuation

Column D Current Certification

The principal agent (or the quantity surveyor) determines the valuation

The principal agent certifies the current valuation amounts and items of expense and/or

!
1.0 Value of work executed
loss detailed in the recovery statement as well as tax on the applicable items

The valuation must be “a reasonable estimate of the work executed” without it being
“work satisfactorily completed”. The principal agent must act impartiality to verify (or

2.1-2 Materials on and off site

!modify) the quantity surveyor’s valuation before certifying such amount

Materials and goods on and off site may be included in the valuation
Note: Projects financed by a financial institution generally exclude payment of unfixed
materials leaving the employer short of money to make payment of an issued payment
certificate. The principal agent must record in the contract data if unfixed materials
(on or off site) will be paid, or not, where included in a payment certificate
A Guarantee for Advance Payment may cover some such materials and will reduce the
employer’s additional risk (see Recovery Statement)
Transfer of ownership of materials off site may be difficult to prove in law

!
3.0

4.0
SUB TOTAL

Security adjustment Applies where the contractor has chosen the security (fixed) to which payment
reduction provisions apply, or is in default by not providing such security and the

! employer elects to apply the payment reduction option

!
5.0 Net contract sum The amount reflected in Column B is the same as the amount in Column A

!
6.0 Authorised adjustments … Authorised adjustments to date are included [B 6.0], excluding anticipated adjustments

!
7.0 Provision for ‘contract price adjustments’ included in [A 7.0], updated in [B7.0], if included in a valuation [C+D 7.0]

!
8.0 TOTAL AMOUNT CERTIFIED … in [D 8.0]

!
9.0 Less Amount certified in the previous payment certificate … [D 9.0]

!
10.0 NET AMOUNT CERTIFIED The net resultant portion of the contract value certified in this payment certificate

!
11.1-3 Recovery Statement Adjustment of amounts due to/by the contractor that attract tax

!
12.0

13.0
SUB TOTAL

Tax
The summed total of the previous items

The subtotal 12.0 is pre-tax. The tax percentage must be filled in and calculated

! If this subtotal is negative, tax will not apply

!
14.1-6 Recovery Statement Amounts that do not attract tax = interest and advance payment amounts (loans)

!
15.0 TOTAL The total of the contract sum and the comparative variable current contract value

!
16.0

17.0
CERTIFIED AMOUNT DUE FOR PAYMENT Identify the currency / receiving party / amount due

Contract sum execution Where the contractor has provided a Guarantee for Construction (variable) the
percentage of the contract sum that has been executed must be determined.

!!
The completion status must be indicated as it affects all the security options

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 57
®
Certificate for Payment Certificate No: 11

issued in terms of Clause 25 of the

Principal Building Agreement Edition 6.1 © March 2014 Interim or Final interim

Employer ABC Developments

Contractor DEF Construction

Works XYZ Project

Site Erf ? ?? Ville, Greater ? Town

Valuation Date 201?-02-05 Issue Date 201?-02-07 Payment due date 201?-02-21

A B C D
CONTRACT SUM CURRENT CURRENT CURRENT
CONTRACT VALUE VALUATION CERTIFICATION

1.0 Value of the works executed [25.3.1] 270 000.00

2.1 Materials on site [25.3.2] 20 000.00

2.2 Materials off site [25.3.2] 0.00

3.0 SUB TOTAL 290 000.00

4.0 Security adjustments applicable [11.3.2; 25.3.4] If applicable, state % 0.0 % 0.00 290 000.00

5.0 Net contract sum 2 420 000.00 2 420 000.00

6.0 Authorised adjustments to contract value [26.0] 100 000.00

7.0 Contract Price Adjustments [25.3.4] 80 000.00 80 000.00 10 000.00 10 000.00

8.0 TOTAL AMOUNT CERTIFIED (excluding tax) 300 000.00

9.0 Less Previous amount certified [25.3.6] (excluding tax) (120 000.00)

10.0 NET AMOUNT CERTIFIED (excluding tax) 180 000.00

11.1 Less Expense and loss payable to the employer [Recovery Statement 1.1] (excluding tax) 0.00

11.2 Less Penalties levied and payable to the employer [Recovery Statement 1.2] (excluding tax) 0.00

11.3 Add Damages payable to the contractor [Recovery Statement 2.2] (excluding tax) 0.00

12.0 SUB TOTAL 2 500 000.00 2 600 000.00 (excluding tax) 180 000.00

13.0 Add Tax on 11.0 [25.3.8] 14 % 350 000.00 364 000.00 25 200.00

14.1 Less Default interest payable to the employer [Recovery Statement 1.3] (excluding tax) 0.00

14.2 Less Recoupment from contractor of an advance payment [Recovery Statement 1.3.2] (excluding tax) (40 000.00)

14.3 Add Compensatory interest payable to the contractor [Recovery Statement 2.1.1] (excluding tax) 0.00

14.4 Add Default interest payable to the contractor [Recovery Statement 2.1.2] (excluding tax) 648.85

14.5 Add Advance payment made to the contractor [Recovery Statement 2.1.3] (excluding tax) 150 000.00

14.6 Add Tax exempt items (salvaged materials used in the works) [25.3.10] (excluding tax) 0.00

15.0 TOTAL 2 850 000.00 2 964 000.00

16.0 Currency ZAR CERTIFIED AMOUNT DUE FOR PAYMENT to the Contractor / Employer Contractor 315 848.85

17.0 Contract sum execution (Security for Construction- variable - only) (D8.0/A12.0*100) 12.0 %

Security status
Mark each box as appropriate < 50% ✔ > 50% ✖ Practical Completion ✖ Final Completion ✖

Signature Date: 201?-02-07

Signed by the principal agent who, as agent for the employer, certifies
that the positive or negative amount stated in D 16.0 is due and payable by
Name and address of the principal agent's practice the date stated, irrespective of the date of signature of this certificate
JBCC® PBA Edition 6.1 PAYMENT CERTIFICATE © March 2014
 58

!14.0 PAYMENT CERTIFICATE NOTIFICATION (PBA)

!
!
14.1 PURPOSE

The payment certificate notification informs the n/s subcontractor of a subcontract amount included in the total amount
certified to the contractor (or employer) in the current payment certificate. Any adjustment made to such amount due to
the security provided by the contractor is not applicable to the payment due to the subcontractor. The contractor must
certify the full amount due to the subcontractor and make any adjustment in terms of the security provided by the

!
subcontractor. The NOTE on the payment notification form details this condition

14.2 THE PAYMENT CERTIFICATE NOTIFICATION

Column A Subcontract Sum The subcontract sum i.t.o the agreement remains fixed for the duration of the

!
Column B Current SC Value
subcontract

The totals of Columns A and B give an immediate comparison between the subcontract
sum and the subcontract value at the date of issue of the payment certificate. The
quantity surveyor, where appointed, determines the adjustments to the subcontract

! value for approval by the principal agent

!
Column C Current Valuation

Column D Current Certification

The principal agent or quantity surveyor, where appointed, determines the valuation

The principal agent notifies the subcontractor of the current subcontract valuation
amounts certified to the contractor together with any adjustment i.t.o. the security
provided by the contractor, the previous gross subcontract amount certified as well as

!
1.0 Value of work executed
tax on the net subcontract amount certified

The principal agent inserts the value of work included in the current payment

!
2.1-2 Materials on and off site
certificate

The principal agent inserts the value of items included in the current payment

! certificate

!
3.0

4.0
SUB TOTAL

Security adjustment The principal agent notifies the subcontractor of adjustments made to the valuation of
items included in the current payment certificate (if applicable) to comply with the
contractor’s security provision in terms of the principal agreement

!
5.0 Net contract sum The amount reflected in Column B is the same as the amount in Column A

!
6.0 Authorised adjustments … Authorised adjustments to date are included [B 6.0], excluding anticipated adjustments

!
7.0 Provision for ‘contract price adjustments’ included in [A 7.0], updated in [B7.0], if included in a valuation [C+D 7.0]

!
8.0 TOTAL AMOUNT CERTIFIED … in [D 8.0]

!
9.0

10.0
Less Amount certified in the previous payment certificate … [D 9.0]

NET AMOUNT CERTIFIED The amount of the n/s subcontract value that has been certified in the current payment
certificate. This amount may differ in the contractor’s payment advice due to
adjustments the contractor may be entitled to make in terms of the subcontractor’s

!
11.0 Tax
security or the n/s subcontract recovery statement

The subtotal 10.0 is pre-tax. The tax percentage must be filled in and calculated

! If this subtotal is negative, tax will not apply

!
12.1-2 SC Recovery Statement

13.0 TOTAL
Amounts that affect the subcontractor’s income or expenditure, that are tax neutral

The total of the subcontract sum and the comparative variable current subcontract

!
value

!
14.0

15.0
AMOUNT DUE FOR PAYMENT Identify the currency / receiving party / amount due

Subcontract sum execution Where the subcontractor has provided a Guarantee for Construction (variable) the
percentage of the subcontract sum that has been executed must be determined.
The completion status must be indicated as it affects all the security options for the

! works as a whole in terms of practical completion and final completion

Note: The principal agent is not responsible for and is not involved in determining any
of the recovery amounts nor for determining whether the security provided by the

!
subcontractor varies the amount due

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 59
®
Subcontractor's Payment Certificate Notification Notification No: 11
issued in terms of Clause 25.4.3 of the
Principal Building Agreement Edition 6.1 © March 2014 Interim or Final interim

Contractor

Subcontractor

N/S Works

Site

Note: The payment certificate identified above has been issued to the contractor that includes an amount due for payment to or by the named subcontractor.
Where applicable, the adjusted amount certified is in terms of the security provided by the contractor. This adjustment may or may not affect the amount certified
to the subcontractor. No account is taken of other amounts that may be due between the parties. The compilation of the certified amount is set out below

Date of issue 201?-02-07 A B C D

N/S CONTRACT SUM CURRENT N/S CURRENT CURRENT
Payment Certificate No 11 CONTRACT VALUE VALUATION CERTIFICATION

1.0 Value of Work executed [25.3.1] 12 000.00

2.1 Materials on site [25.3.2] 8 000.00

2.2 Materials off site [25.3.2] 0.00

3.0 SUB TOTAL 20 000.00

4.0 Security Adjustments [14.7.1, 31.8] If applicable, state % 0.0% % 0.00 20 000.00

5.0 Net n/s subcontract sum 600 000.00 600 000.00

6.0 Adjustments to n/s subcontract value [26.0] 0.00

7.0 Contract Price Adjustments [25.3.4] 0.00 0.00 0.00 0.00

8.0 TOTAL AMOUNT CERTIFIED (excluding tax) 20 000.00

9.0 Less Previous gross amount certified [25.3.6] (excluding tax) 0.00

10.0 SUB TOTAL 600 000.00 600 000.00 (excluding tax) 20 000.00

11.0 Add Tax on 11.0 [25.3.8] 14 % 84 000.00 84 000.00 2 800.00

12.1 Less Interest / Advance Payment Recoupment [27.1.7] (excluding tax) 0.00

12.2 Add Interest / Advance Payment Made [27.2.4] (excluding tax) 150 000.00

13.0 TOTAL 684 000.00 684 000.00

14.0 Currency ZAR AMOUNT DUE FOR PAYMENT to the Subcontractor / Contractor Subcontractor 172 800.00

15.0 N/S Contract Sum execution % (Security for Construction - variable- only) (D8.0/A10.0*100) 3.3 %

Contractor completion status Practical Completion ✖ Final Completion ✖

Signature Date: 201?-02-07

Signed by the principal agent who, as agent for the employer, certifies that
Name and address of the principal agent's practice the amount stated in D 15.0 is included in the current payment certificate
JBCC® PBA Edition 6.1 PAYMENT CERTIFICATE NOTIFICATION © March 2014
 60

15.0 RECOVERY STATEMENT (NSSA)

!
!
!
15.1 PURPOSE

The n/s subcontract recovery statement deals with expenses and losses suffered by the contractor or the subcontractor
that do not affect the n/s subcontract value and that are not part of the valuation of the work in progress nor the n/s
subcontract final account. Such expenses and losses can occur at any time during the n/s subcontract construction
period. The amounts as are determined by the contractor on a monthly basis and are included in the interim or the final

!
subcontractor’s payment advice issued at that time

!
Documentation substantiating the amounts due must accompany the n/s subcontract recovery statement

By dealing with such expenses and losses as they occur and not at the end of the contract considerable administrative

!
frustration is avoided and the parties are correctly compensated for such expenses and losses incurred

!
15.2

Column A
THE STATEMENT

Total Amount to be recovered

!
Column B
All amounts as determined by the contractor are accounted for on an accumulative basis

Less Previously recovered

!
Column C
Previously determined amounts are accounted for

Recovered this Period

The difference between the column A and B subtotal amounts are carried to the referenced item in the n/s

! subcontractor’s payment advice

!
15.3 AMOUNTS DUE TO THE CONTRACTOR

There are eight conditions for which the contractor is entitled to recovery from the subcontractor. These are:
▪ The first six (1.1.1-6) are grouped together as they all impact on the tax calculated on the certified n/s subcontract
value
▪ The remaining two items, default interest (1.2.1) and advance payment recoupment (1.2.2), are accounted for after tax

! (not on old form)

!
15.4 AMOUNTS DUE TO THE SUBCONTRACTOR

There are five conditions for which the subcontractor is entitled to recovery from the contractor. These are:
▪ Damages (2.1.1) and non-contract variations (2.1.2) are accounted for before tax
▪ {Compensatory interest (2.2.1) =discontinued}, default interest (2.2.2) and advance payments made

! These amounts are tax neutral and are accounted for after tax

!
15.5

▪
IMPORTANT NOTES

The n/s subcontract recovery statement must be issued simultaneously with each n/s subcontractor’s payment
advice
▪ All recovery amounts exclude tax as this is dealt with in the n/s subcontractor’s payment advice
▪ Each item to be recovered is identified by a n/s subcontractor’s payment advice location reference with only the

! amount in column C being transferred to that location

15.6 ADVANCE PAYMENT ADMINISTRATION

!!
See Page 66

!!
!!
!!
!!
!!
!!
!!
!!
!!
!
©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 61
®
Subcontractor's Recovery Statement Advice No: PA certificate 11
issued in terms of Clause 27.0 of the
N/S Subcontract Agreement Edition 6.1 © March 2014 Date of Advice: 201?-02-08

Contractor

Subontractor

N/S Works

Site

The following amounts, detailed in separate documents, are to be recovered in the stated Payment Advice
A B C
Payment Certificate/payment due 11 201?-02-21 TOTAL TO BE LESS PREVIOUS RECOVERY
RECOVERED RECOVERY THIS PERIOD
1.0 AMOUNTS DUE TO THE CONTRACTOR

1.1.1 Effecting insurances, or paying charges [27.2.2] 0.00 0.00

1.1.2 Work executed by other parties [27.2.3] 2 500.00 0.00

1.1.3 Damages [27.1.1; 27.2.8] 0.00 0.00

1.1.4 Termination of the n/s subcontract agreement [ 27.2.6] 0.00 0.00

1.1.5 Default by the subcontractor [27.2.10] 0.00 0.00

1.1.6 Additional cost of scaffolding [27.2.9] 0.00 0.00

Subtotal of 1.1 [10.1] 2 500.00 0.00 2 500.00

1.2.1 Default interest [27.1.5] 0.00 0.00

1.2.2 Recoupment of Advance Payment [27.2.4] 0.00 0.00

Subtotal of 1.2 [13.1] 0.00 0.00 0.00

2.0 AMOUNTS DUE TO THE SUBCONTRACTOR

2.1.1 Damages [27.1.6] 0.00 0.00

2.1.2 Non-contract variations [27.1.8] 12 000.00 0.00

Subtotal of 2.1 [10.2] 12 000.00 0.00 12 000.00

2.2.1 Compensatory interest = not applicable

2.2.2 Default interest [27.1.5] 0.00 0.00

2.2.3 Advance payments granted [27.1.7] 150 000.00 0.00

Subtotal of 2.2 [13.2] 150 000.00 0.00 150 000.00

Currency ZAR Note: all amounts exclude tax

Signature Date: 201?-02-08

Signed by the contractor who certifies that amounts stated above are
Name and address of contractor included in the current n/s subcontract payment advice
JBCC® NSSA Edition 6.1 RECOVERY STATEMENT © March 2014
 62

!!
16.0 PAYMENT ADVICE STATEMENT (NSSA)
!
!
16.1 PURPOSE

The amount of money that is due and payable by the contractor to the subcontractor or vice versa is ‘certified’ in a n/s
subcontractor’s payment advice issued by the contractor. Liquidity is conferred where the contractor (the debtor)
acknowledges his indebtedness to the subcontractor for a determined sum of money. The wording must be correct –

!
specifying the contractor and the subcontractor and the payment amount that is due to the subcontractor

Payment due to the employer is provided for in the agreement and the payment certificate form but is not a liquid

!
document!

!
16.2 THE PAYMENT ADVICE STATEMENT

Column A Contract Sum The n/s subcontract sum in terms of the agreement remains fixed for the duration of

! the subcontract

Column B Current Contract Value The totals of Columns A and B give an immediate comparison between the n/s
subcontract sum and the n/s subcontract value at the date of issue of the n/s

!
Column C Current Valuation
subcontractor’s payment advice.

The contractor incorporates the valuation provided by the principal agent in the

!
Column D Current Certification
statement issued in terms of the Principal Building Agreement

The contractor certifies the current valuation amounts and items of expense and/or loss

!
1.0 Value of work executed
detailed in the n/s subcontract recovery statement as well as tax on applicable items

The contractor incorporates the valuation provided by the principal agent in the
statement issued in terms of the Principal Building Agreement. The contractor has no

!
2.1-2 Materials on and off site
authority to reduce or vary such valuation

The subcontractor’s materials on and off site are to be included where they are

! certified in the payment certificate

!
3.0

4.0
SUB TOTAL

Security adjustment Applies only where the subcontractor has chosen the security (fixed) to which
payment reduction provisions apply, or is in default by not providing such security and
the contractor elects to apply the payment reduction option

!
5.0

6.0
Net subcontract sum The amount reflected in Column B is the same as the amount in Column A

Authorised adjustments … Authorised adjustments determined by the principal agent to date are included [B 6.0],

! excluding anticipated adjustments

!
7.0 Provision for ‘contract price adjustments’ included in [A 7.0], updated in [B7.0], if included in a valuation [C+D 7.0]

!
8.0 GROSS AMOUNT CERTIFIED … in [D 8.0]

!
9.0

10.0
Less Amount certified in the previous payment advice statement … [D 9.0]

NET AMOUNT CERTIFIED The net resultant portion of the n/s subcontract value certified in this n/s

! subcontractor’s n/s payment advice statement

!
11.1-2 Recovery Statement Amounts that affect the subcontractor’s income or expenditure, that are tax neutral

!
12.0

13.0
SUB TOTAL

Tax
The summed total of the previous items

The subtotal 12.0 is pre-tax. The tax percentage must be filled in and calculated

! If this subtotal is negative, tax will not apply

!
14.1-2 Recovery Statement

15.0 TOTAL
Amounts that do not attract tax = interest and advance payment amounts.

The total of the n/s subcontract sum and the comparative variable current n/s

! subcontract value

!
16.0

17.0
CERTIFIED AMOUNT DUE FOR PAYMENT Identify the currency / receiving party / amount due

Contract sum execution Where the subcontractor has provided a Guarantee for Construction (variable) the
percentage of the n/s subcontract sum that has been executed must be determined.

!
The completion status must be indicated as it affects all the security options

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 63
®
Subcontractor's Payment Advice Advice No: PA certificate 11
Issued in terms of Clause 25.3 of the
N/S Subcontract Agreement Edition 6.1 © March 2014 Date: 201?-02-08

Contractor

Subcontractor

N/S Works

Site

Valuation date 201?-02-05 A B C D

N/S CONTRACT SUM CURRENT N/S CURRENT CURRENT
Payment due date 201?-02-21 CONTRACT VALUE VALUATION CERTIFICATION

1.0 Value of Work executed [25.3.1] 14 000.00

2.1 Materials on site [25.3.2] 6 000.00

2.2 Materials off site [25.3.2] 0.00

3.0 SUB TOTAL 20 000.00

4.0 Security Adjustments [14.7.1, 25.3.3] no / if yes, percentage? 90.0 % (2 000.00) 18 000.00

5.0 Net contract sum 600 000.00 600 000.00

6.0 Adjustments to contract value [26.0] 0.00

7.0 Contract Price Adjustments [26.7.6] 0.00 0.00 0.00 0.00

8.0 GROSS AMOUNT CERTIFIED (excluding tax) 18 000.00

9.0 Less Previous gross amount certified [25.3.6] (excluding tax) 0.00

10.0 NET AMOUNT CERTIFIED (excluding tax) 18 000.00

11.1 Less Expense and loss [Recovery Statement 1.1] (excluding tax) (2 500.00)

11.2 Add Amounts due [Recovery Statement 2.1] (excluding tax) 12 000.00

12.0 SUB TOTAL 600 000.00 600 000.00 (excluding tax) 27 500.00

13.0 Add Tax on 11.0 [25.3.8] 14 % 84 000.00 84 000.00 3 850.00

14.1 Less Interest / Advance Payment Recoupment [Recovery Statement 1.2] (excluding tax) 0.00

14.2 Add Interest / Advance Payment Made [Recovery Statement 2.2] (excluding tax) 150 000.00

15.0 TOTAL 684 000.00 684 000.00

16.0 Currency ZAR AMOUNT DUE FOR PAYMENT to the subcontractor / contractor Subcontractor 181 350.00

17.0 N/S Contract sum execution % (Security for Construction- variable - only) (D8.0/A12.0*100) 3.0 %

Contractor completion status < 50% ✔ > 50% ✖ Practical Completion ✖ Final Completion ✖

Signature Date: 201?-02-08

Signed by the contractor who certifies that the amount stated is due and
Name and address of contractor payable to the named subcontractor
JBCC® NSSA Edition 6.1 NSA PAYMENT ADVICE © March 2014
 64

!!
17.0 PAYMENT CERTIFICATE (MWA)
!
!
17.1 PURPOSE

An amount of money that is due and payable by the employer to the contractor or vice versa is ‘certified’ in a payment
certificate issued by the principal agent. Liquidity is conferred where the employer (the debtor), by the signature of the
principal agent, acknowledges his indebtedness to the contractor for a determined sum of money. The wording must be
correct – specifying the employer, principal agent and the contractor and the payment amount that is due to the

!
contractor

Payment due to the employer is provided for in the agreement and the payment certificate form but is not a liquid

!
document!

!
17.2 THE PAYMENT CERTIFICATE

!
Column A Contract Sum The contract sum i.t.o. the agreement remains fixed for the duration of the contract

Column B Current Contract Value The totals of Columns A and B give an immediate comparison between the contract

! sum and contract value at the time of issue of the payment

!
Column C Current Valuation

Column D Current Certification

The principal agent determines the valuation of the works

The principal agent certifies the current valuation amounts and items of expense

!
1.0 Value of work executed
and/or loss {detailed in the recovery statement} as well as tax on the applicable items

The valuation must be “a reasonable estimate of the work executed” without it being
“work satisfactorily completed”. The principal agent must act impartiality {to verify (or

!
2.1-2 Materials on and off site
modify) the quantity surveyor’s valuation before certifying such amount}

Materials and goods on and off site may be included in the valuation
Note: Projects financed by a financial institution generally exclude payment of unfixed
materials leaving the employer short of money to make payment of an issued payment
certificate. The principal agent must record in the contract data if unfixed materials
(on or off site) will be paid, or not, where included in a payment certificate
A Guarantee for Deposit may cover some such materials and will reduce the
employer’s additional risk {see Recovery Statement}

! Transfer of ownership of materials off site may be difficult to prove in law

!
3.0

4.0
SUBTOTAL

Security adjustment
The total of the previous items

Applies where the contractor is in default by not providing a specified security and the

!
employer elects to apply the payment reduction option

!
5.0 Net contract sum The amount reflected in Column B is the same as the amount in Column A

!
6.0 Authorised adjustments … Authorised adjustments to date are included [B 6.0], excluding anticipated adjustments

!
7.0 TOTAL AMOUNT CERTIFIED … in [D 7.0]

!
8.0 Less Amount certified in the previous payment certificate … [D 8.0]

!
9.0 NET AMOUNT CERTIFIED The net resultant portion of the contract value certified in this payment certificate

!
10.1-3 (Recovery Statement) Amounts that affect the contractor’s income or expenditure, that are tax neutral

!
11.0

12.0
SUB TOTAL

Tax
The summed total of the previous items

The subtotal 11.0 is pre-tax. The tax percentage must be filled in and calculated

!
13.1-4 (Recovery Statement)
If this subtotal is negative, tax will not apply

Amounts that do not attract tax = interest and advance payment amounts.

! Any deposit paid by the employer for the purchase of materials must also be included

!
14.0 TOTAL The total of the contract sum and the comparative variable current contract value

!
15.0

16.0
CERTIFIED AMOUNT DUE FOR PAYMENT Identify the currency / receiving party / amount due

Contract sum execution Where the contractor has provided a Guarantee for Construction (variable) the
percentage of the contract sum that has been executed must be determined.

!!
The completion status must be indicated as it affects all the security options

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 65
®
Certificate for Payment Certificate No: 3

Issued in terms of Clause 18 of the

interim
Minor Works Agreement Edition 5.1 © March 2014 Interim or Final

Employer

Contractor

Works

Site

Valuation Date 201?-02-05 Issue Date 201?-02-07 Payment due date 201?-02-21

A B C D
CONTRACT SUM CURRENT CURRENT CURRENT
CONTRACT VALUE VALUATION CERTIFICATION

1.0 Value of the works executed [19.3.1] 485 000.00

2.1 Materials on site [19.3.2] 25 000.00

2.2 Materials off site [19.3.2] 0.00

3.0 SUB TOTAL 510 000.00

4.0 Security adjustments applicable [8.3.1; 19.3.3] If applicable, state % 4.0 % (20 400.00) 489 600.00

5.0 Net contract sum 840 000.00 840 000.00

6.0 Authorised adjustments to contract value [20.0] 60 000.00

7.0 TOTAL AMOUNT CERTIFIED (excluding tax) 489 600.00

8.0 Less Previous amount certified [19.3.5] (excluding tax) (302 100.00)

9.0 NET AMOUNT CERTIFIED (excluding tax) 187 500.00

10.1 Less Expense and loss payable to the employer [Recovery Statement 1.1] (excluding tax) (30 500.00)

10.2 Less Penalties levied and payable to the employer [Recovery Statement 1.2] (excluding tax) 0.00

10.3 Add Damages payable to the contractor [Recovery Statement 2.2] (excluding tax) 0.00

11.0 SUB TOTAL 840 000.00 900 000.00 (excluding tax) 157 000.00

12.0 Add Tax on 11.0 [25.3.8] 14 % 117 600.00 126 000.00 21 980.00

13.1 Less Recoupment from contractor of a deposit [Recovery Statement 1.3.2] (excluding tax) 0.00

13.2 Add Default interest payable to the contractor [Recovery Statement 2.2.1] (excluding tax) 0.00

13.3 Add Deposit amounts paid to the contractor [Recovery Statement 2.1.2] (excluding tax) 0.00

13.4 Add Tax exempt items (salvaged materials used in the works) [18.3.10] (excluding tax) 0.00

14.0 TOTAL 957 600.00 1 026 000.00

15.0 Currency ZAR CERTIFIED AMOUNT DUE FOR PAYMENT to the Contractor / Employer Contractor 178 980.0

16.0 Contract sum execution (Variable construction guarantee only) (C3.0/A11.0*100) 60.7 %

Security status
Mark each box as appropriate < 50% ✖ > 50% ✔ Practical Completion ✖ Final Completion ✖

Signature Date: 201?-02-07

Signed by the principal agent who, as agent for the employer, certifies
that the positive or negative amount stated in D 15.0 is due and payable by
Name and address of the principal agent's practice the date stated, irrespective of the date of signature of this certificate
JBCC® MWA Edition 5.1 PAYMENT CERTIFICATE © March 2014
 66

!!
18.0 PROMPT PAYMENT regulations + application
!
!
18.1 BACKGROUND

In South Africa the Construction Industry Development Board (CIDB) submitted draft regulations during 2012 to
the Minister of Public Works consisting, amongst others, of Part IV C entitled “Prompt Payment” and Part IV D
entitled “Adjudication” including a standard of adjudication (the “standard”) advising that the draft regulations be
promulgated by the Minister as regulations in terms of the Section 33(i) of the CIDB Act 38 of 2000

! Effective date: TBC

!
18.2 PURPOSE

Applies to building contracts in the private and the public sector

!
To ensure that all contractors get paid by the due date for work completed

Applies in the relationship between the employer and the contractor

!
Applies in the relationship between the contractor as employer and each subcontractor

!
Payment terms are recorded in the agreement and /or the contract data between the parties

Reasons for not paying the full amount in the stipulated time period may include:
▪ Quality of work is disputed

!
▪ Quantity of work completed is disputed

Note: An interim payment certificate is a fair approximation of the quantum of work produced but does not
warrant acceptance of the quality of such work on the date of issue by the principal agent of an interim payment

!
certificate

Where the employer disputes the amount certified in a payment certificate:

▪ The employer must give notice to the contractor within five (5) working days with reasons why such
payment such be reduced or withheld.
▪ If the contractor accepts such representation, the undisputed amount must be paid within the ‘contractual’
period for payment
▪ Where the contractor does not accept such representation either party must refer the matter to adjudication
with five (5) working days. The adjudicator must make his/her determination within a further five (5) working
days
▪ The adjudicator’s determination becomes immediately binding on the parties (refer to court cases)
▪ Where the employer withholds payment without reason and without following the notice procedure, the
contractor may give notice of his/her intention to suspend the works should payment not be received in full
before expiry of the notice period
▪ The works remain suspended until payment has been received
▪ The principal agent must revise the date for practical completion and adjust the contract value to include
expense and loss incurred by the contractor during the period of suspension
▪ Should payment not be received before expiry of the 2nd notice period, the contractor may give notice to

! terminate the works forthwith on expiry of such notice …and be entitled to recover damages

!
The same applies in the relationship between contractor as employer and each subcontractor

Applies to all JBCC® agreements

!
Clause 25.11 in the JBCC® N/S Subcontract Agreement Edition 6.1 March 2014 will no longer apply

!! !
!!
!!
!!
!!
!!
!!
!!
!
©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 67

!19.0 ADVANCE PAYMENT

!
!
19.1 PURPOSE

The Guarantee for Advance Payment (a Guarantee for Deposit in the MWA) is a financial instrument to enable the
employer to make an advance payment (a loan) to the contractor or the subcontractor for materials or equipment to be
ordered in advance of their requirement on site. Such goods can not be included in a payment certificate as “value of

!
work executed”

!
Some form of collateral will be required by the institution providing such a security

!
A “transfer of ownership” may be considered to be a legally unenforceable substitute

!
19.2

19.2.1
ADMINISTRATION

All advance payment (deposit) transactions are dealt with in the applicable recovery statement (Minor Works

!
19.2.2
generally in the payment certificate)

No “direct payments” or recoupment of an advance payment (deposit) may bypass the payment certificate to

!
19.2.3
ensure that all financial transactions pertaining to the agreement are accounted for in the various payment forms

Interest or other charges related to the Guarantee for Advance Payment (deposit) must be agreed directly

!
19.2.4
between the parties --- They are not part of the contract sum nor the contract value!

A Guarantee for Advance Payment (deposit) should not be demanded for materials off site that adequately fall

! within the provisions of a Guarantee for Construction provided by the contractor or n/s subcontractor

!
19.2.5 ‘Advance payments’ (deposit) are a form of loan and therefore do not attract tax

!
19.2.6

19.2.7
Note: The end Current Certification balances with the end Total Net Payment

The employer is entitled to call up the Guarantee for Advance Payment (deposit) should the contractor or a

! subcontractor default in the repayment of such ‘loan’ at any stage

!!
19.2.8 Advance Payment Life Cycle Table

The following tables set out the typical cash flow of an advance payment to either or both the contractor and a

!!
subcontractor

Security information Contractor Subcontractor

Recipient’s Net Contract Value (excl Tax) 2 00 000 600 000

Advance payment required 200 000 150 000

Recoupment period (months) 5 3

Recoupment start month M3 M5

Recoupment monthly payment 40 000 50 000

!!
!
Payment Certificate M1 M2 M3 M4 M5 M6 M7 M8 Total
Contract
Valuation: Contractor 40 000 120 000 280 000 500 000 800 000 1 200 000 1 700 000 2 000 000 Value

N/S 0 0 20 000 70 000 240 000 480 000 570 000 600 000

Certified: Contractor 0 -40 000 -120 000 -280 000 -500 000 -800 000 -1 200 000 -1 700 000

N/S 0 0 0 -20 000 -70 000 -240 000 -480 000 -570 000

Current certification 40 000 80 000 180 000 270 000 470 000 640 000 590 000 330 000 2 600 000

Add Tax at 14% 5 600 11 200 25 200 37 800 65 800 89 600 82 600 46 200 364 000

Gross certification 45 600 91 200 205 200 307 800 535 800 729 600 672 600 376 200 2 964 000

Advance/ recoupment C 200 000 0 -40 000 -40 000 -40 000 -40 000 -40 000 0

Advance/recoupment N/S 0 0 150 000 0 -50 000 -50 000 -50 000 0

Total net payments 245 600 91 200 315 200 267 800 445 800 639 600 582 600 376 200 2 964 000

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 68

® Guarantee  for  Advance  Payment

For  use  with  JBCC®  Principal  Building  Agreement   state  edition  /date

For  use  withJBCC®  NSSA  Subcontract  Agreement   state  edition  /date

GUARANTOR  DETAILS
Guarantor:

Physical  address;

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Employer:

Recipient:

Contractor:

Contractor:

Principal  Agent:

Works:  

Site:

Guaranteed  Advance  Payment  Sum  (maximum  aggregate  amount)       Currency

…  amount  in  words:

Security  expiry  date:

AGREEMENT  DETAILS

Principal  Agent  issues JBCC®  format  Interim  Payment  Certificates,  interim  Recovery  Statements

1.0     GUARANTEE  FOR  ADVANCE  PAYMENT

1.1 The  particulars  of  the  recoupment  of  the  guaranteed  Advance  Payment  sum  are  set  out  in  the  following  schedule:-­‐

Recoupment period (no. of months)

Recoupment period commencement (start month)

Monthly recoupment (amount)

Note: Where the recoupment amounts and/or periods are irregular

a schedule of recoupment amounts and dates must be attached

1.2 The Guarantor’s liability shall be limited to the outstanding diminishing amounts of the guaranteed Advance Payment sum as
follows:-­‐

1.2.1 The  guaranteed  Advance  Payment  sum  on  receipt  thereof  by  the  Recipient

1.2.2 The full outstanding balance after the deduction of each recoupment made in terms of the monthly payment certificate as
stated  in  1.1

1.2.3 After the deduction of the last scheduled recoupment payment or on settlement of the full outstanding balance this
Guarantee  for  Advance  Payment  shall  expire

2.0 The  Guarantor  acknowledges  that:-­‐

2.1 Any reference in this Guarantee for Advance Payment to the Agreement is made for the purpose of convenience and shall not be
construed  as  any  intention  to  create  an  accessory  obligation  or  any  intention  to  create  a  suretyship

2.2 Its  obligation  under  this  Guarantee  for  Advance  Payment  is  restricted  to  the  payment  of  money
 69

2.3 Reference  to  a  recovery  statement    or  a  Payment  Certificate  shall  mean  such  certificate  issued  by  the  Principal  Agent

3.0 Subject to the Guarantor’s maximum liability referred to in 1.0 the Guarantor undertakes to pay the Employer the sum certified on receipt
of  the  documents  identified  in  3.1  to  3.3:-­‐

3.1 A copy of a first written demand notice issued by the Employer to the Recipient stating that payment of a sum certified by the
Principal Agent has not been made in terms of the Agreement and failing such payment within seven (7) calendar days, the
Employer  intends  to  call  upon  the  Guarantor  to  make  payment  in  terms  of  3.2

3.2 A first written demand notice issued by the Employer to the Guarantor at the Guarantor’s physical address with a copy to the
Recipient stating that a period of seven (7) calendar days has elapsed since the issue of the first written demand notice in terms of
3.1 and that the sum certified has not been paid to date. The Employer herewith calls up this Guarantee for Advance Payment and
demands  payment  of  the  sum  certified  from  the  Guarantor

3.3 A copy of the recovery statement and payment certificate which entitles the Employer to receive payment in terms of the
Agreement  of  the  sum  certified  in  3.0

4.0 Subject to the Guarantor’s maximum liability referred to in 1.0 the Guarantor undertakes to pay the Employer the guaranteed Advance
Payment sum or the full outstanding balance upon receipt of a first written demand notice from the Employer to the Guarantor at the
Guarantor's  physical  address  calling  up  this  Guarantee  for  Advance  Payment  stating  that:-­‐

4.1 The Agreement has been terminated due to the Recipient's default and that the Guarantee for Advance Payment is called up in
terms  of  4.0.  The  demand  notice  shall  enclose  a  copy  of  the  notice  of  termination;  or

4.2 A provisional sequestration or liquidation court order has been granted against the Recipient and that the Guarantee for Advance
Payment  is  called  up  in  terms  of  4.0.  The  demand  notice  shall  enclose  a  copy  of  the  court  order      

5.0 The  aggregate  amount  of  payments  to  be  made  by  the  Guarantor  in  terms  of  3.0  and  4.0  shall  not  exceed  the  Guarantor's  maximum  liability  
in  terms  of  1.0

6.0 Payment by the Guarantor in terms of 3.0 or 4.0 shall be made within seven (7) calendar days on receipt of the first written demand notice
to  the  Guarantor

7.0 The Employer shall have the absolute right to arrange his affairs with the Recipient in any manner which the Employer deems fit and the
Guarantor shall not have the right to claim his release from this Guarantee for Advance Payment on account of any conduct alleged to be
prejudicial  to  the  Guarantor

8.0 The  Guarantor  chooses  the  physical  address  stated  above  for  all  transactions  in  connection  with  this  Security

9.0 This Guarantee for Advance Payment is neither negotiable nor transferable and shall expire upon payment of the final payment certificate
in terms of the Agreement or on payment in full of the guaranteed Advanced Payment Sum or on the expiry date of the Security, whichever
is the earlier, whereafter no claims will be considered by the Guarantor. The original Guarantee for Advance Payment form shall be
returned  to  the  Guarantor  after  it  has  expired

10.0 This Guarantee for Advance Payment, with the required demand notices in terms of 3.0 or 4.0, shall be regarded as a liquid document for
the  purpose  of  obtaining  a  court  order

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC®  Guarantee  for  Advance  Payment  ©  March  2014

 70

MWA  Guarantee  for  Deposit

For  use  with  the  JBCC®  Minor  Works  Agreement   state  edition  /date

GUARANTOR  DETAILS  
Guarantor:

Physical  address:

Guarantor's  signatory  1: Capacity

Guarantor's  signatory  2: Capacity

Employer:

Recipient:

Contractor  /  Subcontractor:

Principal  Agent:

Works:

Site:

Guaranteed  deposit  amount; Currency

…  amount  in  words:

Security  expiry  date:

AGREEMENT  DETAILS
Principal  Agent  issues JBCC®  format  Payment  Certificate,  Recovery  Statement

1.0     SECURITY  for  DEPOSIT

1.1 The  particulars  of  the  recoupment  of  the  guaranteed  deposit  amount  are  set  out  in  the  following  schedule:

Recoupment period (no. of months)

Recoupment period commencement (start month)

Monthly recoupment (amount)

Note: Where the recoupment amounts and/or periods are irregular

a schedule of recoupment amounts and dates is to be attached

1.2 The  Guarantor’s  liability  shall  be  limited  to  the  outstanding  diminishing  amounts  of  the  guaranteed  deposit  amount  as  follows:

1.2.1 The  guaranteed  deposit  amount  on  receipt  thereof  by  the  Recipient

1.2.2 The full outstanding balance after the deduction of each recoupment made in terms of the monthly payment certificate as
stated  in  1.1

1.2.3 After the deduction of the last scheduled recoupment payment or on settlement of the full outstanding balance this MWA
Guarantee  for  Deposit  shall  expire

2.0 The  Guarantor  acknowledges  that:-­‐

2.1 Any reference in this Guarantee for Deposit to the Agreement is made for the purpose of convenience and shall not be construed as
any  intention  to  create  an  accessory  obligation  or  any  intention  to  create  a  suretyship

2.2 Its  obligation  under  this  MWA  Guarantee  for  Deposit  is  restricted  to  the  payment  of  money

2.3 Reference  to  a  recovery  statement    or  a  Payment  Certificate  shall  mean  such  certificate  issued  by  the  Principal  Agent
 71

3.0 Subject to the Guarantor’s maximum liability referred to in 1.0 the Guarantor hereby undertakes to pay the Employer the sum certified
upon  receipt  of  the  documents  identified  in  3.1  to  3.3:-­‐

3.1 A copy of a first written demand notice issued by the Employer to the Recipient stating that payment of a sum certified by the
Principal Agent has not been made in terms of the Agreement and failing such payment within seven (7) calendar days, the
Employer  intends  to  call  upon  the  Guarantor  to  make  payment  in  terms  of  3.2

3.2 A first written demand notice issued by the Employer to the Guarantor at the Guarantor’s physical address with a copy to the
Recipient stating that a period of seven (7) calendar days has elapsed since the issue of the first written demand notice in terms of
3.1 and that the sum certified has still not been paid to date. The Employer herewith calls up this Guarantee for Deposit and
demands  payment  of  the  sum  certified  from  the  Guarantor

3.3 A copy of the recovery statement and payment certificate which entitles the Employer to receive payment in terms of the
Agreement  of  the  sum  certified  in  3.0

4.0 Subject to the Guarantor’s maximum liability referred to in 1.0 the Guarantor undertakes to pay the Employer the guaranteed deposit sum
or the full outstanding balance upon receipt of a first written demand notice from the Employer to the Guarantor at the Guarantor's
physical  address  calling  up  this  MWA  Guarantee  for  Deposit  stating  that:-­‐

4.1 The Agreement has been terminated due to the Recipient's default and that the MWA Guarantee for Deposit is called up in terms of
4.0.  The  demand  shall  enclose  a  copy  of  the  notice  of  termination;  or

4.2 A provisional sequestration or liquidation court order has been granted against the Recipient and that the MWA Guarantee for
Deposit  is  called  up  in  terms  of  4.0.  The  demand  shall  enclose  a  copy  of  the  court  order    

5.0 The  aggregate  amount  of  payments  to  be  made  by  the  Guarantor  in  terms  of  3.0  and  4.0  shall  not  exceed  the  Guarantor's  maximum  liability  
in  terms  of  1.0

6.0 Payment by the Guarantor in terms of 3.0 or 4.0 shall be made within seven (7) calendar days upon receipt of the first written demand
notice  to  the  Guarantor

7.0 The Employer shall have the absolute right to arrange his affairs with the Recipient in any manner which the Employer deems fit and the
Guarantor shall not have the right to claim his release from this MWA Guarantee for Deposit on account of any conduct alleged to be
prejudicial  to  the  Guarantor

8.0 The  Guarantor  chooses  the  physical  address  stated  above  for  all  transactions  in  connection  with  this  Security

9.0 This MWA Guarantee for Deposit is neither negotiable nor transferable and shall expire upon payment of the final payment certificate in
terms of the Agreement or on payment in full of the guaranteed deposit amount or on the expiry date of the Security, whichever is the
earlier, whereafter no claims will be considered by the Guarantor. The original MWA Guarantee for Deposit form shall be returned to the
Guarantor  after  it  has  expired

10.0 This MWA Guarantee for Deposit, with the required demand notices in terms of 3.0 or 4.0, shall be regarded as a liquid document for the
purpose  of  obtaining  a  court  order

Signed  at Date

Guarantor’s  Signatory  1 Guarantor’s  Signatory  2

Witness Witness

Guarantor’s  seal  or  stamp

JBCC®  MWA  Guarantee  for  Deposit  ©  Macrh  2014

 72

CALCULATING THE FLUCTUATION OF COSTS (ESCALATION)

!
!
The calculation and payment of fluctuations is an integral part of interim valuations. Fluctuations are referred to as Contract
Price Adjustment Provisions (CPAP) in the built environment. The most commonly applied formula for calculating CPAP for
building contracts in South Africa was (originally known as) the Haylett Formula. Please refer to the CPAP indices application

!
Manual and the Work Groups Composition and weighting of sub-indices

! The indices are calculated and compiled by Statistics SA and are available from their webpage free of charge:-

!
www.statssa.gov.za/publications/mystats.asp?myfavpubl=1&myfavpubln=P0151

! The weighting of the indices are also useful when analysing unit rates

! The formula: A = 0.85 V (Ie/Io-1)

Where: A = the amount of adjustment

0.85 = a constant which provides for a 15% non-adjustable element
V = the work value for adjustment in such work group and the valuation period
Ie = the value of the index applicable to such work group and the valuation period which
shall be the value for the month

! Io = the value of the index applicable to such work group for the base month

The formula is applied to the net amount certified for every workgroup. The net amount is determined by deducting the
amount previously certified from the accumulative amount for the current month for each workgroup. The base month index
(Io) remains constant throughout the contract for each workgroup. The only time where this would not be the case is when
work is undertaken at a different time than that of the initial tender. An example would be an item that was included in the
tender as a provisional sum and that is tendered at a later stage than the main contract. The current month index (Ie) moves

!
along month by month according to the date of the certificate

The format according to which the escalation is calculated resembles that of the detail of the certificate and also starts off
with the cumulative total for each workgroup less the amount previously certified to obtain the amount that needs to be
adjusted. It is important to realise that the result arrived at is no longer a cumulative amount and therefore the adjustments
of all the certificates need to be added together to obtain a cumulative amount for inclusion in the valuation

!
The indices are obtained from the P0151 publication and the monthly indices and inserted into the sheet as illustrated below;

Assume the following:- Tender date: November 2009 Date of Certificate no 1: January 2010

ESCALATION CALCULATIONS
PROJECT: NEW WAREHOUSE
CERTIFICATE NO: CERTIFICATE NO. 1 (ONE)
DATE: 20 JANUARY 2010

WORK- DESCRIPTION ACCUMULATIVE PREVIOUSLY NET AMOUNT BASE CURRENT ADJUSTMENT

GROUP VALUE CERTIFIED TO BE MONTH MONTH
CERTIFIED ADJUSTED
V Io Ie A
104 Earthworks 100 000.00 0.00 100 000.00 352.7 353.7 241.00
110 Concrete 60 000.00 0.00 60 000.00 464.9 477.3 1 360.29
111 Formwork 45 000.00 0.00 45 000.00 371.1 374.3 329.83
114 Reinforcement 50 000.00 0.00 50 000.00 472.8 462.6 (916.88)
116 Brick and Blockwork 120 000.00 0.00 120 000.00 427.3 439.8 2 983.85
190 Preliminaries 200 000.00 0.00 200 000.00 374.3 375.3 454.18
575 000.00 0.00 575 000.00 4 452.28

TOTAL CERTIFICATES NO 1 to _____ 0.00

CURRENT CERTIFICATE

" TOTAL TO DATE 4 452.28

Note that the adjustment for workgroup 114 reinforcement is negative. This indicates the cost of reinforcement

!
has decreased since the date of tender. The next certificate would be as follows

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014
 73

ESCALATION CALCULATIONS
PROJECT: NEW WAREHOUSE
CERTIFICATE NO: CERTIFICATE NO. 2 (TWO)
DATE: 20 FEBRUARY 2010

WORK- DESCRIPTION ACCUMULATIVE PREVIOUSLY NET AMOUNT BASE CURRENT ADJUSTMENT

GROUP VALUE CERTIFIED TO BE MONTH MONTH
CERTIFIED ADJUSTED
V Io Ie A
104 Earthworks 100 000.00 100 000.00 - 352.7 353.7 -
110 Concrete 80 000.00 60 000.00 20 000.00 464.9 477.3 453.43
111 Formwork 60 000.00 45 000.00 15 000.00 371.1 374.3 109.94
114 Reinforcement 75 000.00 50 000.00 25 000.00 472.8 462.6 (458.44)
116 Brick and Blockwork 180 000.00 120 000.00 60 000.00 427.3 439.8 1 491.93
190 Preliminaries 300 000.00 200 000.00 100 000.00 374.3 375.3 227.09
795 000.00 575 000.00 220 000.00 1 823.95

TOTAL CERTIFICATES NO 1 to 1 4 452.28

CURRENT CERTIFICATE 1 823.95

" TOTAL TO DATE 6 276.23

Figure 21: Calculating fluctuations (escalation)

There may be instances where the value of work is based on information that does not stem from the same time as the
tender - for instance items that were included in the tender documentation as cost price items and that are adjusted to the
correct cost according to invoices that are to be submitted as soon as the work the pertain to is executed. Such an event can
be handled in two ways - either these values can be grouped together in a total that is not subject to escalation, or the rates
may be de-escalated back to the same base month as the tender and then included with the other work and escalated
together with the other work. To de-escalate a value the inverse of the formula must be applied

Assume the value of the tiling at current value is R 10 000

! Current index (Ie) for January 2010 for tiling is 361.2;

1 .
Base index (Io) for November 2009 for tiling is 360.4

Adjusted (de-escalated) amount = V x [1+ 0.85 (Ie/Io -1)]

= R 10 000 x 1 / [1+0.85(361.2/360.4-1)]
= R 10 000 x 1/[1+0.0019]
= R 10 000 x 0.9981

! = R 9 981

It is important during the final account stage to double check that the indices used to calculate the fluctuations are correct in
all the certificates. The indices prepared by Statistics SA are issued on a monthly basis. When the CPAP is calculated and
the indices for the current month are not available the latest available indices are used. Should any of the indices be
incorrect the specific month’s calculations must be redone as well as all subsequent calculations to correct the cumulative

!!
value for the CPAP

Source: University of Pretoria – Department of Construction Economics – lecture notes

©JBCC® Guide to Completion, Valuation, Certification and Payment - Edition 6.1, March 2014