ARCHIVED GC5 - Terms of Payment

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GC 5.1 Definitions

For the purposes of this section:

"Payment Period" means a period of 30 days or such other longer period as 
may be agreed between the Contractor and the Departmental Representative.

an amount is "Due and Payable" when it is due and payable by Canada to the 
Contractor in accordance with the terms of the Contract.

an amount is "Overdue" when it remains unpaid after the day upon which it 
is due and payable.

"Date of Payment" means the date of the negotiable instrument of an amount 
due and payable by the Receiver General for Canada.

"Fixed Price Arrangement" means that part of the Contract that prescribes a 
lump sum as payment for performance of the Work to which it relates.

"Unit Price Arrangement" means that part of the Contract that prescribes 
the product of a Unit Price multiplied by a number of Units of Measurement 
of a Class as payment for performance of the Work to which it relates.

"Unit Price Table" means the table set out in the Tender and Acceptance.

"Bank Rate" means the rate of interest established from time to time by the 
Bank of Canada as the minimum rate at which the Bank of Canada makes short 
term advances to members of the Canadian Payments Association.

"Average Bank Rate" means the simple arithmetic mean of the Bank Rates in 
effect at 4:00 EST each day during the calendar month which immediately 
precedes the calendar month in which payment is made, where the "Bank Rate" 
means the rate of interest established from time to time by the Bank of 
Canada as the minimum rate at which the Bank of Canada makes short term 
advances to members of the Canadian Payments Association.

"Duration of the Work" means the number of calendar days required to 
complete the Work, commencing on the first day following receipt by the 
Contractor of the fully executed Contract and ending the day on which the 
Departmental Representative verifies that the Work has been satisfactorily 
completed.

GC 5.2 Payment - General Provisions

1.     It is a condition precedent to Canada's obligation under subsection 
       4 of GC 5.4, subsection 1 of GC 5.5 and subsections 1 and 2 of GC 5 .6, 
       that the Contractor has made and delivered to the Departmental 
       Representative, a statutory declaration as described in subsection 2 
       of GC 5.2.

2.     A statutory declaration in a form acceptable to Canada shall contain 
       a declaration that the Contractor has complied with all lawful 
       obligations with respect to workers, to the Labour Conditions if 
       applicable, and that all lawful obligations towards Subcontractors 
       and suppliers in respect of the Work under the Contract have been 
       fully discharged.

3.     A payment by Canada pursuant to this section shall not be construed 
       as evidence that the Work is satisfactory or in accordance with the 
       Contract.

4.     Delay in making payment by Canada under GC 5.2 shall not constitute 
       a breach of Contract.

5.     Without limiting any right of setoff or deduction given or implied 
       by law or elsewhere in the Contract, Canada may retain from amounts 
       payable to the Contractor under the Contract, any amount payable to 
       Canada by the Contractor under the Contract or any other current 
       contract.

6.     No additional payment shall be made for delays where the cause of 
       the delay was under the control of the Contractor.

7.     Except as provided for in these General Conditions, the amount 
       payable to the Contractor under the Contract shall not be increased 
       or decreased by reason of any increase or decrease in cost of the 
       Work brought about by any increase in the cost of labour, Plant or 
       Material.  In the event of a change, including a new imposition or 
       repeal, of any tax, customs or other duty, charge, or any similar 
       imposition that is imposed under sales or excise tax legislation of 
       the Government of Canada or any Provincial or Territorial 
       legislation, affects the cost of the Work to the Contractor, and 
       occurs

       (a)    after the date of submission by the Contractor of the 
              Contractor's tender; or
       (b)    if the Contractor's tender was revised, after the date of 
              submission of the last revision;

       the Contract Amount shall be adjusted by an amount equal to the 
       increased or decreased cost to the Contractor, which amount shall be 
       determined through a detailed examination of the Contractor's 
       records.

GC 5.3 Final Completion

1.     For a Contract in which the duration of the work is greater than 
       thirty (30) days, a Final Certificate of Completion shall be issued 
       to the Contractor on the date on which the Work has been completed 
       and the Contractor has complied with the Contract and all orders and 
       directions made pursuant thereto, all to the satisfaction of the 
       Departmental Representative.

2.     Where the Contract is, in whole or in part, a Unit Price Arrangement, 
       the Departmental Representative shall, at the same time as the 
       issuance of the Final Certificate of Completion, issue a Final 
       Certificate of Measurement setting out the Authorized Quantities 
       used or employed in respect of the classes and units set out in the 
       Unit Price Table under TA 6 of the Tender and Acceptance form and 
       any subsequent amendments thereto, such certificate to be binding 
       upon the Contractor and Canada.

3.     For Contracts in which the duration of the work is equal to or 
       lesser than thirty (30) days, the Departmental Representative shall 
       issue a written notice to the Contractor following the date that the 
       work has been successfully completed and the Contractor has complied 
       with the Contract and all orders and directions made pursuant 
       thereof, all to the satisfaction of the Departmental Representative, 
       confirming its successful completion.

GC 5.4 Progress Payments

1.     Where the duration of the Work is greater than thirty (30) days, the 
       Contractor shall be entitled to receive progress payments upon 
       submitting a progress claim in a form approved by the Departmental 
       Representative.

2.     On the expiration of a Payment Period, the Contractor shall deliver 
       to the Departmental Representative

       (a)    a written progress claim that fully describes any part of the 
              Work that has been satisfactorily completed and any Material 
              that was delivered to the site of the Work but not 
              incorporated into the Work during the Payment Period for 
              which the progress claim relates;

       (b)    a completed and signed statutory declaration as described in 
              subsection 2 of GC 5.2 ; and

       (c)    in the case of the initial progress claim and the request for 
              final payment, satisfactory evidence of compliance with 
              workers' compensation legislation that is applicable to the 
              place of the Work.

3.     Not later than ten (10) days after receipt of a progress claim 
       properly submitted in accordance with subsection 2 of GC 5.4, the 
       Departmental Representative shall issue a progress report, a copy of 
       which shall be given to the Contractor, indicating the value of the 
       part of Work and the Material described in the progress claim that, 
       in the opinion of the Departmental Representative, is in accordance 
       with the Contract, and was not included in any previous progress 
       report.

4.     Not later than thirty (30) days after the receipt by the 
       Departmental Representative of a properly submitted progress claim 
       and supporting documentation, Canada shall pay the Contractor an 
       amount that is equal to 90% of the value that is indicated in the 
       progress report.

GC 5.5 Payments - Duration of Work equal to or less than 30 Days 
1.     Upon verification by the Departmental Representative and subject to 
       GC 5.4, payment of the Contractor's invoice for the value of the 
       Work satisfactorily completed, shall be made no later than thirty 
       (30) days after receipt, by the Departmental Representative, of the 
       said invoice, the statutory declaration referred to in subsection 2 
       of GC 5.2 and any schedule or update to the schedule as may be 
       specified elsewhere in the Contract.

2.     If, within fifteen (15) days of receipt of the invoice referred to 
       in subsection 1 of GC 5.5, additional information is requested by 
       the Departmental Representative, the 30-day payment period shall 
       commence upon receipt of the requested information.

GC 5.6 Payment - Duration of the Work over 30 Days

1.     In the case of a Fixed Price Arrangement, Canada shall pay the 
       Contractor for 90% of that portion of the Work that is 
       satisfactorily performed and 90% of the price for the Material that 
       is delivered to the site of the Work but not yet installed during 
       the payment period for which the progress payment relates.  A 
       progress payment shall be 90% of

       (a)    the Contract Amount; plus

       (b)    the aggregate of any increases and decreases to the Contract 
              Amount as may be provided for in the General Conditions or 
              agreed to by the Contractor and the Departmental 
              Representative; less

       (c)    the aggregate of all previous amounts paid for Work 
              satisfactorily performed under the Contract; less

       (d)    the aggregate of all amounts withheld from previous progress 
              payments; less

       (e)    an amount estimated by the Departmental Representative that 
              is equal to the cost to complete the remainder of the Work 
              and correct any known deficiencies; less

       (f)    the aggregate of any amounts payable to or costs and damages 
              claimed by Canada or by a Claimant, against the Contractor.

2.     In the case of a Unit Price Arrangement, Canada shall pay the 
       Contractor 90% of the actual quantity of each Class of labour, Plant 
       and Material that was performed, used or supplied to the site of the 
       Work during the Payment Period for which the progress payment 
       relates.  The Departmental Representative reserves the right to 
       increase or decrease the quantities submitted by the Contractor if 
       there is a disagreement between the Contractor's invoiced quantities 
       and the quantities shown in the records maintained at the site of 
       the Work.  A progress payment shall be 90% of the aggregate of

       (a)    the product of the actual quantity for each Class of labour, 
              Plant and Material that was performed, used or supplied to 
              the site of the Work for that Payment Period; multiplied

       (b)    in each case, by the corresponding Unit Price, Goods and 
              Services Tax/Harmonized Sales Tax (GST/HST) extra, as set out 
              in the Unit Price Table; less

       (c)    any amounts payable to or costs and damages claimed by Canada 
              or by a Claimant, against the Contractor.

3.     Subject to subsections 4, 5 and 6 of GC5.6, the Departmental 
       Representative and the Contractor may, by an agreement in writing, 
       amend a Unit Price as set out in the Unit Price Table for any Class 
       of labour, Plant or Materials provided the Final Certificate of 
       Measurement shows that the Authorized Quantity of the Class of 
       labour, Plant or Material actually performed, used or supplied by 
       the Contractor in performing the Work is

       (a)    less than 85% of the Estimated Quantity; or
       (b)    in excess of 115% of the Estimated Quantity.

4.     In no event shall the total amount of an Item set out in the Unit 
       Price Table that has been amended pursuant to paragraph 3. (a) of GC 
       5.6 exceed the amount that would have been Payable to the Contractor 
       had the Estimated Quantity actually been performed, used, or 
       supplied.

5.     An amendment that is made necessary by paragraph 3. (b) of GC 5.6 
       shall apply only to the quantities that are in excess of 115%.

6.     Where the Departmental Representative and the Contractor fail to 
       agree on the amount of any adjustment to a Unit Price as 
       contemplated by GC 5.6, the amended Unit Prices shall be determined 
       in accordance with GC 5.9.

7.     Thirty (30) days after the issue of the Final Certificate of 
       Completion and, in the case of the Unit Price Arrangement, the Final 
       Certificate of Measurement, there shall become due and payable to 
       the Contractor an amount equal to the aggregate of the final 
       Contract Amount, less the aggregate of any amounts payable to or 
       costs and damages claimed by Canada or by a Claimant, against the 
       Contractor, less  the aggregate of all progress payments made 
       pursuant to GC 5.4 and GC 5.6.

GC 5.7 Interest on Overdue Accounts

1.     Canada shall be liable to pay, to the Contractor, simple interest at 
       the Average Bank Rate plus 3% per annum on any amount that is 
       Overdue.  The interest shall apply from the date such amount becomes 
       Overdue until the day prior to the Date of Payment inclusively.

2.     Interest shall be paid to the Contractor without demand on Overdue 
       payments, except, in respect to amounts which are less than fifteen 
       (15) days Overdue, in which case, no interest shall be paid unless 
       the Contractor so demands.

3.     Canada shall not be liable to pay interest on Overdue advance 
       payments or where Canada is not responsible for the delay in paying 
       the Contractor.

GC 5.8 Payment in the event of Termination

1.     In the case of a Fixed Price Arrangement, if the Contract is 
       terminated pursuant to GC 7.4, Canada shall pay the Contractor

       (a)    an amount, as agreed upon by the Contractor and the 
              Departmental Representative, for all labour, Plant and 
              Material performed, used or supplied by the Contractor as at 
              the date of termination plus

              (i)    any fully supported termination costs incurred by the 
                     Contractor, less

              (ii)   any amounts payable to or costs and damages claimed by 
                     Canada or by a Claimant, against the Contractor; or

       (b)    failing such an agreement, an amount calculated in accordance 
              with subsection 2 of GC 5.9.

2.     In the case of a Unit Price Arrangement, if the Contract is 
       terminated pursuant to GC 7.4, Canada shall pay the Contractor

       (a)    the product of the Authorized Quantity as described in the 
              Final Certificate of Measurement for each Class of labour, 
              Plant and Material that was performed, used or supplied to 
              the site of the Work as at the date of termination; 
              multiplied

       (b)    in each case, by the corresponding Unit Price, GST/HST extra, 
              as set out in the Unit Price Table or as amended pursuant to 
              subsection 3 of GC 5.6, less

       (c)    any amounts payable to or costs and damages claimed by Canada 
              or by a Claimant, against the Contractor.

GC 5.9 Determination of Price

1.     Prior to Undertaking the Work

       (a)    where a Lump Sum Arrangement applies to the Contract or a 
              part thereof, the price of any change shall be the aggregate 
              estimated cost of labour, Plant and Material that is required 
              for the change as agreed upon in writing by the Contractor 
              and the Departmental Representative under the authority of 
              the Minister, plus an allowance for overhead, margin and the 
              risk of undertaking the work within the stipulated amount, 
              which shall be equal to

              (i)    20% of the aggregate estimated cost for that portion 
                     of the work done by the Contractor's own forces; and

              (ii)   15% of the aggregate estimated cost for that portion 
                     of the work that is done by subcontract;

       (b)    where a Unit Price Arrangement applies to the Contract or a 
              part thereof, the Contractor and the Departmental 
              Representative under the authority of the Minister may, by 
              agreement in writing, add Items, Units of Measurement, 
              Estimated Quantities and Unit Prices to the Unit Price Table;

       (c)    a Unit Price referred to paragraph 1.(b) of GC 5.9 shall be 
              determined on the basis of the aggregate estimated cost of 
              labour, Plant and Material that is required for the 
              additional Item as agreed upon by the Contractor and the 
              Departmental Representative under the authority of the 
              Minister, plus an amount equal to the allowance set out in 
              paragraph 1. (a) of GC 5.9;

       (d)    and to facilitate approval of the price of the additional 
              Item, the Contractor shall submit a cost estimate breakdown 
              identifying, as a minimum, the estimated cost of labour, 
              Plant, Material, each subcontract amount, and the amount of 
              the appropriate percentage allowance as described in 
              paragraph 1. (c);

       (e)    if no agreement can be reached as contemplated in paragraph 1. 
              (a) of GC5.9, the price shall be determined in accordance 
              with subsection 2 of GC 5.9; and

       (f)    if no agreement can be reached as contemplated in paragraphs 
              2. (b) and 2. (c) of GC 5.9, the Departmental Representative 
              shall determine the Class and the Unit of Measurement of the 
              Item of labour, Plant or Material and the Unit Price shall be 
              determined in accordance with subsection 2 of GC 5.9.

2.     Following Completion of the Work

       (a)    where it is not possible to predetermine, or where there is 
              failure to agree upon the price of a change in the Work, the 
              price of the change shall be equal to the aggregate of

              (i)    all reasonable and proper amounts actually expended or 
                     legally payable by the Contractor in respect of the 
                     labour, Plant and Material that fall within one of the 
                     classes of expenditure described in paragraph 2. (b) 
                     of GC 5.9, that are directly attributable to the 
                     performance of the Contract; plus

              (ii)   an allowance for profit and all other expenditures or 
                     costs equal to 10% of the sum of the amounts referred 
                     to in subparagraph 2. (a)(i) of GC 5.9; plus

              (iii)  interest, if any, paid by the Contractor on the 
                     amounts determined under subparagraphs 2. (a)(i) and 2. 
                     (a)(ii) of GC5.9, calculated in accordance with GC 5.7.

       (b)    The cost of labour, Plant and Material referred to in 
              subparagraph 2. (a) of GC5.9 shall be limited to the 
              following categories of expenditure:

              (i)    payments to Subcontractors and suppliers;

              (ii)   wages, salaries and traveling expenses of employees of 
                     the Contractor located at the site of the Work and 
                     that portion of wages, salaries, bonuses, living and 
                     traveling expenses of personnel of the Contractor 
                     generally employed at the head office or at a general 
                     office of the Contractor provided they are actually 
                     and properly engaged on the Work under the Contract;

              (iii)  assessments payable under any statutory authority 
                     relating to workers' compensation, employment 
                     insurance, pension plan or holidays with pay, 
                     provincial health or insurance plans, environmental 
                     reviews, and GST collection costs;
 
              (iv)   rent that is paid for Plant, or an amount equivalent 
                     to the said rent if the Plant is owned by the 
                     Contractor, that is necessary for and used in the 
                     performance of the Work, if the rent or the equivalent 
                     amount is reasonable and use of that Plant had been 
                     approved by the Departmental Representative;

              (v)    payments for maintaining and operating Plant necessary 
                     for and used in the performance of the Work, and 
                     payments for effecting repairs thereto that, in the 
                     opinion of the Departmental Representative, are 
                     necessary for the proper performance of the Contract, 
                     other than payments for any repairs to the Plant 
                     arising out of defects existing before its allocation 
                     to the Work;

              (vi)   payments for Material that is necessary for and 
                     incorporated in the Work, or that is necessary for and 
                     consumed in the performance of the Contract;

              (vii)  payments for preparation, delivery, handling, erection, 
                     installation, inspection, protection and removal of 
                     the Plant and Material necessary for and used in the 
                     performance of the Contract; and

              (viii)        any other payments made by the Contractor with 
                     the approval of the Departmental Representative that 
                     are necessary for the performance of the Contract in 
                     accordance with the Contract Documents.

GC 5.10       Claims Against and Obligations of the Contractor or 
Subcontractor

1.     The Contractor shall ensure that all its lawful obligations arising 
       out of the performance of the Work are discharged and satisfied at 
       least as often as the Contract requires Canada to pay the Contractor.  
       The Contractor shall provide the Departmental Representative with a 
       Statutory Declaration, as referred to in subsection 2 of GC 5.2.  
       Among other things, the Statutory Declaration shall also clearly 
       identify the existence and condition of any disputed claims and 
       outstanding obligations.

2.     In order to discharge lawful obligations of and satisfy lawful 
       claims against the Contractor or a Subcontractor arising out of the 
       performance of the Work, Canada may

       (a)    pay an amount from money that is due and payable to the 
              Contractor pursuant to the Contract directly to the claimant 
              against the Contractor or the Subcontractor; or

       (b)    withhold from any amount that is due and payable to the 
              Contractor pursuant to the Contract the full amount of the 
              claim or any portion thereof.  Monies withheld for this 
              purpose shall not be subject to any interest payment in the 
              event such claims are rejected.

3.     The amount referred to in paragraph 2. (a) of GC 5.10 shall be that 
       amount which the Contractor would have been obliged to pay to such 
       claimant had the provisions of the Provincial or Territorial lien 
       legislation, or in the province of Quebec, the law relating to 
       mortgage, been applicable to the Work.  Any such claimant need not 
       comply with the provisions of such legislation setting out the steps 
       by way of notice, registration, or otherwise as might have been 
       necessary to preserve or perfect any claim for lien or mortgage 
       which the claimant might have had.

4.     For the purposes of GC 5.10 a claim shall be considered lawful when 
       it is so determined

       (a)    by a court of competent jurisdiction;
       (b)    by an arbitrator duly appointed to arbitrate the said claim; 
or
       (c)    by written notice delivered to the Departmental 
              Representative and signed by the Contractor authorizing 
              payment of the said claim(s).

5.     A payment made pursuant to subsection 2 of GC 5.10 is, to the extent 
       of the payment, a discharge of Canada's liability to the Contractor 
       under the Contract and may be deducted from any amount payable to 
       the Contractor under the Contract.

6.     Subsection 2 of GC 5.10 shall only apply to claims and obligations 
       where

       (a)    the notification of which has set forth the amount claimed to 
              be owing and the person who by Contract is primarily liable;
 
       (b)    the notification or a copy of the notification was received 
              by the Departmental Representative in writing before final 
              payment is made to the Contractor and within one hundred and 
              twenty (120) days of the date on which the claimant

              (i)    should have been paid in full under the claimant's 
                     Contract with the Contractor or Subcontractor where 
                     the claim is for money that was lawfully required to 
                     held back from the claimant; or

              (ii)   performed the last of the labour or furnished the last 
                     of the Plant or Material pursuant to the claimant's 
                     Contract with the Contractor or Subcontractor where 
                     the claim is not for money referred to in subparagraph 
                     6. (b)(i) of GC 5.10; and

       (c)    the proceedings to determine the right to payment for the 
              claim shall have commenced within one year from the date that 
              the notice referred to in paragraph 6. (b) of GC 5.10 was 
              received by the Department Representative.

7.     The Departmental Representative shall inform the Contractor in 
       writing of receipt of any notification of claim and of the intention 
       of Canada to withhold funds pursuant to subsection 2 of GC 5.10.  
       The Contractor may, at any time thereafter and until payment is made 
       to the claimant, post with Canada, security in the form of a 
       Claimant's Payment Bond acceptable to Canada and in an amount equal 
       to the value of the said claim.  Upon receipt of such security 
       Canada shall release to the Contractor any funds which would be 
       otherwise payable to the Contractor, that were withheld pursuant to 
       the provisions of subsection 2 of GC 5.10.