How to prepare an interim and final payment certificate (with a worked example)

Types of certificate: interim, final and subcontractor

In Egyptian public contracts, article 93 of the Executive Regulation of Law 182 of 2018 provides for final statements after provisional taking-over, paying what is due less earlier payments, and then the final account after final taking-over at the end of the guarantee period, when the final security is returned. Under the FIDIC Red Book 2017 the contractor submits a Statement at completion within 84 days of the completion date (sub-clause 14.10), then the Final Statement (14.11), and the Engineer issues the Final Payment Certificate (14.13).

What a certificate contains

Cumulative item value = cumulative quantity × unit rate × payment percentage

Amount due = (cumulative gross − cumulative deductions) − net of earlier certificates

Deductions taken from a certificate

Price adjustment is not a deduction as such: it is an addition paid to the contractor when the prices of an item's inputs rise, and a deduction when they fall. It is worked out separately from retention.

Checking, approving and paying a certificate

The contractor submits the certificate with the measurement records; the supervising engineer or consultant checks quantities, rates and payment percentages and may adjust some quantities before approval; the employer then pays the approved net. The contract sets the periods and rates; here is how two common references handle them:

Common mistakes

• Taking deductions on the period value in one certificate and on the cumulative value in another, which breaks the balance. Pick one method; the safer one is cumulative, then deduct the previous.
• Copying previous quantities from the contractor's own file instead of the last approved certificate after the consultant's changes.
• Exceeding an item's contract quantity without a variation order. In Egyptian public works contracts each item may change by up to 25% at the same rates, under conditions (art. 46); anything beyond that is governed by the contract and the text in force.
• Mixing additional works into the original items, so the reviewer cannot trace them.
• Missing signed measurement records, the first thing a reviewer asks for.
• Rounding differences between the table and the total, or writing the net in words differently from the figure.
• Submitting late, which delays payment too, because the period runs from submission.

Worked example: interim certificate no. 3

A project with three items; the previous certificate (no. 2) is approved. Rates and percentages are illustrative: retention 5% and advance recovery 10% of the value of work, deductions taken on the cumulative value. Amounts in Egyptian pounds.

Amount due now = cumulative net 1,127,100 − net of earlier certificates 663,000 = EGP 464,100, the same as the net of the current column. Taking deductions on the period value alone gives the same figure while the rates stay fixed, but the cumulative method corrects any change to earlier quantities automatically.

Steps to prepare an interim certificate

1. Gather the contract terms: item rates, retention rate, advance and its recovery rate, taxes and the certificate period.
2. Measure the work done on site with the supervising engineer and sign the measurement records.
3. Take previous quantities from the last approved certificate, not from your own copy.
4. Enter the current quantity of each item and work out the cumulative, checking it does not pass the contract quantity without a variation order.
5. Multiply quantities by unit rate and payment percentage for previous, current and cumulative.
6. Add additional works and variations in a separate table.
7. Apply the deductions to the cumulative gross.
8. Deduct the net of earlier certificates to get the amount due, and write it in words.
9. Attach the documents, submit the certificate and keep proof of the submission date.
10. Follow the review and approval, and carry the approved quantities, after any change, into the next certificate.