last updated: 31st July 2011

Payments made in stages during the course of the contract should only be made when the buyer can demonstrate overall savings to the institution. In general advanced payments should not be made to suppliers/contractors unless

  • the payments are linked to material received/work completed
  • the supplier agreed to provide a Certificate of Ownership for materials received or work completed by the supplier

Advance payments should not exceed the value of the goods received/work completed.  For custom-built equipment it is not unusual to offer advance payment on approval of drawings and plans.  Payments in this case are normally in the region of 10% of total value.

Where advance or stage payments are being considered it is important to minimise the risk of the supplier failing to fulfil the contract and the payments made being lost. In such instances the institution should consider the use of bonds and guarantees to minimise the risk.  For more information, please click here.

For further advice, please contract your Head of Procurement.

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