How to Submit Progress Claims Under Clause 37 of AS4000

It is common practice in the Australian construction industry to adhere to standard contractual frameworks, such as those provided by Standards Australia. For one, it helps in achieving payment by contractors and keeping capital works projects moving forward.

One of the commonly used Standards Australia contracts in the industry is the AS4000. In this article, we navigate the AS4000 general conditions of contract and its clauses for client side project managers overseeing payment.

What is AS4000?

The AS 4000-1997 General Conditions of Contract (or simply, AS4000 or AS 4000-1997) is a widely used contract throughout the construction industry developed by Standards Australia. This contract has one key clause – Clause 37 – that helps in conducting payments for the project.

You can read more about AS4000 in our blog "What is AS4000? An Introduction to AS4000-1997 for Client Side Project Managers."

You can buy a copy of the AS 4000 here.

Key Clauses for Payment under AS4000

A critical part of the contract is Clause 37 Payment, which preludes many other clauses and sub-clauses for handling progress claims, progress certificates and the payment claim process. Let’s refine our focus to provide a more granular understanding of how these clauses dictate the submission, assessment, and payment of progress claims throughout. We’ll also look at several adjacent clauses and how they relate throughout.  

Clause 37: Payment

Clause 37.1 Progress Claims:  

• Establishes the contractor’s right to submit progress claims on specified intervals.
• Contractors should ensure they follow the Security of Payments Act and provide comprehensive documentation for each claim.  
• Each progress claim shall be given in writing to the superintendent and shall include details as per the clause (e.g., work completed).

Clause 37.2 Certificates:  

• Stipulates that the superintendent (often fulfilled by the client side project manager) reviews progress claims and issues progress certificates within 14 days, signifying the approved amount for payment.  
• If not issued within 14 days of receiving the progress claim, that progress claim shall be deemed to be the relevant progress certificate, and payment in full can be enforced.  

• The principal shall, within seven days after receiving both certificates (progress claims and progress certificate) and within 21 days after the superintendent receives the progress claim, pay the invoice.
• Retentions can be deducted from the payment under this clause.

Clause 37.4 Final Certificate:

After fulfilling all contractual obligations, the issuance of the final certificate within 28 days marks the end of the payment process, confirming the completion of payment duties under the contract.

Clause 37.5 Final Payment:

Aligns the final payment process with the terms of the final certificate, ensuring any remaining payments are processed, thereby concluding the contractual financial obligations.

Clause 38 Payment of Workers and Subcontractors:

Emphasizes the contractor’s responsibility to ensure timely payment to workers and subcontractors, reflecting the ethical and financial commitments of the contracting party.

Clause 42 Valuation of Work:

Addresses how work under the contract is appraised for payment, including variations and daywork, ensuring equitable compensation.

Implications and Best Practices

Understanding and navigating these specific clauses within AS4000 is crucial for principals, client side project managers (acting as superintendents), and contractors.

Check out our guide on how to respond to a progress claim under the SOP.

Conclusion

The AS4000 general conditions of the contract provide a comprehensive and balanced framework for managing progress claims in the Australian construction industry. By closely adhering to the specific clauses related to progress payments, parties can ensure that the financial aspects of the contract are managed effectively, contributing to the successful completion of construction projects.

Understanding these clauses is not only crucial for compliance but also for fostering a positive contractual relationship between principals and contractors, ensuring mutual success.The AS4000 general conditions of contract provide a comprehensive and balanced framework for managing progress claims in the Australian construction industry. By closely adhering to the specific clauses related to progress payments, parties can ensure that financial aspects of the contract are managed effectively, contributing to the successful completion of construction projects.

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