Ref : LW(G) 119/2 II LANDS AND WORKS BRANCH

GOVERNMENT SECRETARIAT
MURRAY BUILDING
GARDEN ROAD
HONG KONG

4 February 1987

Lands and Works Branch Technical Circular No. 7/87

Minimum Amount of an Interim Payment

1. Introduction

This is a revision of PWD TC 8/77 (part) and PWD TC 14/79 which are hereby cancelled.

2. Tender Documents

The following table and formula is to be used to determine the minimum amount of an interim
payment to be entered into the Appendix to the Form of Tender pursuant to Clause 79(2) of
the General Conditions of Contract for both Civil Engineering & Building Works, 1985
Editions for contracts including monthly interim payments.

Contracts for which the period for interim payment entered in the Appendix in the Form of
Tender is not one month should be assessed on an individual basis, using the provisions in
this Circular as a guide.

LWBTC No. 7/87

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(a) For proposed contracts $2.0 m and over

Estimated Contract Sum Minimum Amount

$ 2.0 m up to and including $ 5.0 m $70,000

over $ 5.0 m" " " " $ 10.0 m $110,000
over $ 10.0 m" " " " $ 25.0 m $160,000
over $ 25.0 m" " " " $ 50.0 m $250,000
over $ 50.0 m" " " " $ 100.0 m $350,000
over $ 100.0 m" " " " $ 250.0 m $500,000
over $ 250.0 m" " " " $750,000

(b) For proposed contracts with an estimate contract sum of less than $2.0m,

Estimated Contract Sum

Minimum Amount = F
Period for completion in months

where "F" is a factor normally ranging between 0.6 and 0.8 at the discretion of the Officer
preparing the tender documents to suit the type and timing of the proposed work but in any
event the Minimum Amount is not to exceed $500,000.

3. Certificates for Less than the Minimum Amount

Minimum payments are specified to avoid the unproductive use of the administrative effort
necessary to prepare an interim certificate and may give incentive to the contractor to proceed
with due diligence. It is recognised that in some circumstances a low value of completed
work is the natural result of the type and timing of the work being undertaken or delays in
making a part of the site available for work to proceed and, therefore, is not due to any failure
by the contractor to make diligent progress. When there are circumstances of this nature
Engineer/Architects/Surveyors are hereby encouraged to exercise their discretionary powers
in favour of certifying payment for an amount less than that shown in the Appendix to the
Form of Tender.

( G. Barnes )
Secretary for Lands and Works

LWBTC No. 7/87