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PAYMENT METHODS FOR GOODS SUPPLIED

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Re: PAYMENT METHODS FOR GOODS SUPPLIED

Post  RJM on Mon Jan 25, 2010 6:16 pm

Galibona, I think this is a valid observation. If the time between delivery of goods and issuing of the acceptance certificate is not specified in the contract this means that Purchaser will issue the referred certificate at “reasonable time” which is dilemma to the Supplier and in business terms this does provide equity to the parties to the contract. I think the worry in the Suppliers’ perspective is how long it will take to be paid after supplying the goods so that any risk can be accommodated in the offer to be submitted.

However, the time of 14 days you are proposing for issuing certificate of acceptance could be short or longer if you take into account diversity of the goods procured by the Procuring Entities. I think there are those which take short time to inspect and test and those require adequate time to finalize inspection and testing process. I have the opinion that the time for issuance of the referred certificate to be specified in the contract by the Procuring Entities depending on inspections and tests that the Procuring Entity will be perform to certify the goods delivered. Clause 10 [Inspections and Tests] of the SBD for Goods requires Purchaser to specify what inspections and tests to be performed in the Special Conditions of Contract and Specifications. Based on this, I believe it is prudent that the time of issuing the certificate of acceptance should be set based on the time required to carry out inspections and tests to the satisfaction of Procuring Entity.

I think Clause 10 [Inspections and Tests] can be modified/amended to accommodate your suggestion of specifying the time between delivering of goods and issuing of the acceptance certificate. This can done by adding Sub-Clause “The Purchaser after inspecting and testing the delivered goods shall issue certificate of acceptance within the time specified in the SCC. This way the payment terms described in the SCC can remain as it is.

RJM

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PAYMENT METHODS FOR GOODS SUPPLIED

Post  Mathias Galibona on Thu Jan 21, 2010 10:10 pm

I have been supplying various goods to different Procuring Entities. The documents we have been using to participate in the tender are the Standard Bidding Documents - Goods and subsequently being awarded the tender.

The method of payments for goods is described in GCC Clause 18 and the SCC. My main concern is payment made on acceptance as stipulated in the documents:
"On Acceptance: .....% of Contract price shall be paid to the Supplier within thirty (30)days after the date of acceptance certificate for the respective delivery issued by the Procuring Entity."

The period between delivery of goods and PE issuing the acceptance certificate is not known, thus, difficult for the Supplier to estimate when he will get paid. It can take a long time before being given the acceptance certificate due to various reasons, e.g. the PE is still verifying the goods if they conform to the required specifications.

Suggestion: A time frame between receiving the goods and issuing the acceptance certificate should be set e.g. fourteen (14) days. The paragraph should be read as: "On Acceptance: .....% of Contract price shall be paid to the Supplier within thirty (30)days after the date of acceptance certificate for the respective delivery issued by the Procuring Entity. Whereas the acceptance certificate should be issued within fourteen (14) days after receiving the goods"

Your comments will highly be appreciated.

Mathias Galibona

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