The final account is the last chance to settle everything the contract has left open. Items missed at this point are hard to recover, because the contract usually limits what can be claimed after the final payment. This checklist sets out the documents and steps that bring a construction contract to a clean close. It is general information, not legal advice; your contract sets the periods and the process.
The FIDIC sequence (1999 Red Book, for reference)
In the 1999 Conditions of Contract for Construction:
- The Taking-Over Certificate is issued (Sub-Clause 10.1).
- Within 84 days of receiving it, the Contractor submits a Statement at Completion with supporting documents and an estimate of all sums it considers due (Sub-Clause 14.10).
- The Performance Certificate is issued when the Defects Notification Period ends and defects are cleared (Sub-Clause 11.9).
- Within 56 days of receiving the Performance Certificate, the Contractor submits a draft final statement (the application for the Final Payment Certificate) (Sub-Clause 14.11), with a written discharge (Sub-Clause 14.12).
- The Engineer issues the Final Payment Certificate (Sub-Clause 14.13).
- The Employer's liability ends except for amounts properly included in the final statement and the Statement at Completion (Sub-Clause 14.14).
The 2017 conditions follow a similar sequence (Statement at Completion, Final Statement, Discharge, Final Payment Certificate) but the names, periods and procedures differ in places. Use your own contract's text for the dates.
Checklist
1. Contract and records
- Contract documents, Particular Conditions and all amendments in one set.
- Register of notices given and received.
- Register of instructions and Engineer's determinations.
- Programme and as-built programme.
2. Measurement and valuation
- Final measurement of executed work against Bills of Quantities, signed or agreed where the contract requires.
- Adjustment of provisional sums and prime cost items, and of provisional quantities.
- Daywork records agreed.
- Price adjustment calculations.
3. Variations
- Variation register reconciled: every instruction valued, approved and included in a payment certificate or in the final account.
- Financier clearance recorded where it was required.
4. Claims and time
- Each claim and notice listed with its status: agreed, determined, withdrawn or open.
- Extensions of time agreed and the completion date recorded.
- Time-related cost claims supported by records.
- A clear statement of anything the Contractor intends to keep open, made before the contract's cut-off.
5. Payments
- Schedule of all payment certificates, amounts paid and dates.
- Advance payment recovered in full.
- Retention: amounts held, released and outstanding.
- Late-payment amounts calculated where the contract provides for them.
- Currency and exchange-rate treatment reconciled.
6. Subcontractors and suppliers
- Subcontract final accounts agreed and recorded.
- Back-to-back items reconciled with the main account.
- Subcontractor discharges obtained where the subcontract requires.
7. Completion deliverables
- Taking-Over Certificate and any snag lists closed.
- As-built drawings and operation and maintenance manuals delivered.
- Performance Certificate issued.
- Performance security and other bonds released as agreed.
8. Close-out
- Statement at Completion and draft final statement prepared, with the discharge.
- Final Payment Certificate issued and paid.
- Project file archived with an index, ready for audit.
- Lessons recorded for the next project.
Why final accounts stall
- Records are scattered between site, head office and subcontractors.
- Variations from months earlier were never agreed or valued.
- Claims were left open without a decision on whether to pursue or release them.
- Retention and security release conditions were not tracked.
- The people who knew the history have left the project.
A sensible order of work
Start before completion, not after it, and give one named person responsibility for the whole account. While the works are being finished, reconcile the variation register first, then the claims register, then the measurement, then the payments. Present a single statement with an index and the supporting records, and agree it with the Engineer and the Employer in stages, recording each agreement in writing. Keep a short list of open items with an owner and a date against each, and review it at every meeting until it is empty.
On donor-funded contracts, add the financier's close-out requirements to the list at the start, because they may set additional reports, audits or document retention periods. Also check what the contract and the Particular Conditions say about the last date for raising claims after the final payment, and put that date in the calendar.
Questions about a specific contract can be sent to info@ceacm.co.ke. This page gives general information about contract and commercial management. It is not legal advice. Where a matter needs legal advice, we recommend you consult an advocate.
Sources: Howard Kennedy, “FIDIC 1999: Clause 14” (summary and commentary hosted by the International Construction Knowledge Hub); FIDIC 1999 and 2017 Conditions of Contract for Construction, Clauses 10, 11 and 14.