Understanding of issuing Payment Certificate: Clause 14.6 of the FIDIC Contract

Asad Ali

Wed, 16 Jul 2025

Today we are going to discuss Clause 14.6, which is about issuing the Interim Payment Certificate (IPC).

In previous lessons, we covered Clauses 14.1 to 14.5, which address various aspects of payment applications—what can be claimed and the different clauses that enhance communication between the contractor and the client. Now, the contractor has submitted the payment application, and it’s in the engineer's hands. In this article, we will explore how the engineer handles the payment statement, and we will dive into more related topics in upcoming sessions.

Clause 14.6 focuses on issuing the IPC. When a contractor submits a payment application, the engineer must review it. Based on this review, the engineer will decide whether to approve or adjust the payment amount.

Conditions for Payment

Before any payment can be made, two main conditions must be met:

1. Performance Security: According to Clause 4.2.1, the contractor must provide performance security, which is a key contractual obligation. For more details, you can refer back to our earlier discussions on performance security.
2. Contractor’s Appointee: As outlined in Clause 4.3, the contractor must appoint a representative, often the project manager or director, who will have the authority to manage contractual matters with the engineer.

Sub-Clauses 14.6.1 to 14.6.3

• Sub-Clause 14.6.1: Issuing the IPC
  Once the contractor submits a payment application (typically on or before the 20th of each month), the engineer has 28 days to review and issue the IPC. This timeframe is crucial. If the engineer fails to respond within 28 days, the contractor's application is deemed accepted, and the employer must make payment based on the contractor’s submission.
• Sub-Clause 14.6.2: Reasons for Withholding the IPC
  There are specific reasons an engineer may withhold an IPC:
1. The total payment is below the contract minimum.
2. Work or materials are not up to standards.
3. The contractor has not fulfilled obligations.
4. There are errors in the contract documents.

The engineer must explain why payment is withheld and what needs to be corrected.

• Sub-Clause 14.6.3: Corrections to the IPC
  If any errors are found in a previous IPC—whether by the engineer or contractor—this sub-clause allows for corrections to be made. If the contractor feels that payments were missed, they can highlight these in the next payment request. If issues remain unresolved, the contractor can formally request a review.

Conclusion

In this lesson, we explored the process of payment certification, including conditions for payment, time-bar clauses, scenarios where payment can be withheld, and how mistakes can be corrected.