2022-03-26（193）Engineering law and the ICE Contracts

The method says that in each interim certificate a part of the item is added or deducted in the proportion that “the amount referred to in cl. 60(2)(a)” of the Conditions included in the interim certificate bears to the total of the bill of quantities without the item (provisional items and P.C. sums, etc. are not deducted). Cl. 60(2)(a) refers to “the amount…less a retention” and it appears, and makes sense, that the words just quoted from the method mean the initial amount. The method says specifically that any interim addition or deduction is to be made before deduction of retention, and therefore will affect the amount of retention. Such interim additions or deductions are not to exceed the amount of the item, and conversely if the whole of the item has not been added or deducted by the date of issue of the completion certificate for the whole works the balance is to be added to or deducted from the retention money due on the certificate. (What if the retention is used up by the employer to make good defects, etc?) 

Thus under an adjustment item where the contractor is entitled to payment for variations at or based on his rates in the bill only the figures in the rates column of the bill apply and not the item. Where the contractor is entitled to payment of his costs or a fair valuation under cl. 52(2), or possibly even an “appropriate increase or decrease of any rates or prices” under cl. 56(2), the rates and prices in the bill strictly speaking do not govern (p. 211), but if either party refers to those rates and prices as having some relevance to the payment due to the contractor it seems that the contractor in the case of an addition or the employer in the case of a deduction may refer to the fact that the rates and prices were to some extent affected by an adjustment item.