INTERIM PAYMENT

DEFINITION

Interim payment is sum of money that must be paid to the

contractor periodically as stipulated in the contract for the
works that have been completed including the building
materials supplied according to the contract.

PURPOSES
To ensure that the contractor is regularly paid throughout the
progress of the works.
To maintain the contractor's cash-flow and thus minimizing any deficit
which may affect the smooth running of the project.
To assist contractor to overcome cash-flow problems.
To provide a source of self-financing in respect of their own
commitments to suppliers and sub-contractors.
To relieve the contractor of the burden of financing the whole of the
works until completion.

IMPORTANCE
The flow of money in and out continuously and with a reasonable
amount is very important to ensure that a project is more viable and
implemented at an economical cost.
The contractor actually needs payment from the client from time to
time to finance the costs that have been spent.
The payment received allows the contractor to make payments to
construction material suppliers, construction workers, general
overhead and other related parties.

METHOD OF INTERIM PAYMENT

METHOD 1
MONTHLY - superintending officer is allowed to make interim payments more than
once a month at his discretion.
METHOD 2
ACCORDING TO WORK LEVEL - it means the contractor will only be paid when a scope of
work agreed at the initial stage has been implemented.
METHOD 3
LUMP SUM - for projects of small value with a short construction period can use this
method.

BASIS OF EVALUATION
Works carried out by the main contractor.
Works carried out by named sub-contractors.
The materials supplied by the named supplier.
Adjustment of fluctuations in the price of building materials.
Specific and fixed damages.

DCQ 40182
PROFESSIONAL PRACTICE 2
MOEHAMAD AFEEQ DANISH BIN ROSLI
15DUB20F2001