Deliver the contract and get paid (Benin)

Winning the contract is only half the journey. It is during delivery that a small firm makes or loses money, most often because of work done without a written order or a payment that runs late. This article follows the contract from notification to the last guarantee released. Your contract prevails over what follows, so read all of it before you start.

From notification to start of work

The order and names of these steps change with the country and the buyer, but you will find them almost everywhere.

Notification
The buyer officially tells you the contract is awarded to you. The time for what follows often starts on this date. Keep the proof of receipt.
Signature and approval
You sign the contract. Depending on the amount and the country, an authority must still approve it before it takes effect. Reread the amounts, time limits and attachments before signing.
Performance guarantee
You hand it over within the time set. Delaying this document can lose you the contract. See Bonds and guarantees.
Registration
Where the rules require it, the contract must be registered with the tax administration, which has a cost. Without this, your payments may be blocked.
Start order
The start order (ordre de service) is the written instruction to begin. Your delivery period generally runs from its date, or from the date it states. Do not start without it, and note the date you received it.
Advance payment
If the contract provides for an advance, ask for it as soon as you can with the required guarantee. It helps fund the start, but do not count on it arriving at once: plan to be able to manage without it.

During delivery: everything in writing

Your best protection is a complete record. When a disagreement breaks out, what is not written does not exist.

Keep the diary. On a works site, the site diary records each day's workforce, equipment, weather, deliveries, visits and problems. For supplies or services, keep the equivalent: delivery notes, attendance sheets, meeting notes. This record is what later shows that a delay came from the buyer and not from you.

Never work without a written order. An official on site asks you for extra work, or a change of model. Without something in writing from the person with the power to order it, you may never be paid for that work, even if it was done in good faith. Reply politely, and ask for the written order or the amendment (avenant, the act that changes the contract) before you begin.

Report problems straight away. Wrong drawings, access to the site refused, late payment: write as soon as the problem appears, asking for an extension of time if needed. Many contracts set a limited time for making claims.

Watch the penalties. A late delivery penalty (pénalité de retard) is usually calculated on the length of the delay and deducted from your payments, sometimes up to a cap beyond which the contract can be terminated. It applies to delay for which you are responsible. Hence the value of the diary, and of written requests for more time for anything that does not come from you.

Get acceptance in stages. When the contract allows it, have each delivered part or completed phase recorded in minutes. This triggers payments and limits arguments at the end. On a site, have work that will be covered up inspected before it disappears.

The payment chain

In a public contract, your payment generally passes through several hands, and each step can stall. Understanding the chain tells you who to talk to.

Your request
An invoice or, for works, a payment certificate (décompte), the dated statement of what has been done and what is owed. Attach the documents the contract requires: acceptance minutes, delivery notes, measurement sheets.
Verification
The supervising engineer, inspector or technical department checks the quantities, then the buyer certifies that the work was done. This is where most returns and corrections happen.
Payment order
The competent authority orders you to be paid (ordonnancement). It gives the formal instruction to the accountant, with the amount and the payee.
Payment
The public accountant, or the project's finance department, makes the transfer after its own checks and depending on available cash.

On a funder-financed project the chain often goes through the project unit, and it may need action by the funder or the State for their respective shares. An international organisation or a private company has its own circuit, usually shorter. The contract or the finance department will tell you.

Why it stalls

The most common causes are an incomplete or non-compliant invoice, a signature waiting because someone is away, a budget that is not available, tight public cash, a change of official, or a funder's money that has not arrived. You cannot solve everything, but you can avoid the first two.

How to follow it

File each invoice with a copy, and have it stamped or signed. This receipt proves the date from which any delay is calculated.
Keep a simple table: invoice number, amount, filing date, stage, person to contact, date of the last reminder.
Follow up regularly and courteously at each stage of the chain, and confirm in writing what you are told verbally.
If a document is missing, correct it the same day: any delay on your side pushes your payment back.

Late-payment interest

Where the applicable text or the contract provides for it, payment after the set period gives a right to late-payment interest (intérêts moratoires), which is interest owed by the buyer for its delay. This right does not exist in the same way everywhere, and you often have to claim it in writing. Many firms hesitate to do so. At the very least, keep the proof of dates, which leaves you the choice.

The rule in Benin

Advance payment

An advance may be provided for in the tender dossier. Cap: 20% of the initial contract for works and intellectual services, 30% for supplies and other services. It is only paid once the required guarantees are in place and is repaid by deduction from instalments or the balance.[1]
The advance must be backed by a refund guarantee for its full amount. Micro, small and medium enterprises are exempt for advances that do not exceed 20% of the contract.[1]

Retention

Where the contract has a warranty period, the buyer may withhold 5% of each payment, set in the specifications. It is released at the end of the warranty period and cannot be assigned.[1]

Payment

Payments are made by bank transfer. The buyer pays instalments and balance within 60 days of receiving the invoice, unless a longer period is set for the balance of some categories of contracts. Communes may grant shorter periods to small and medium enterprises. Beyond that, after a formal notice left unanswered for 8 days, default interest runs at the legal rate set by the BCEAO. Directly paid subcontractors benefit from these rules.[1]
Instalments are due for work started, but optional for contracts shorter than three months. Late penalties require a formal notice and are capped by the specifications. A change of bank details is done by amendment. The code sets a regulation fee of 0.50% of the amount excluding tax of contracts awarded.[1]

Financing the wait

The need for cash is one of the first dangers of a public contract for a small firm. Plan for it when you price, as Price your financial bid shows, and talk to your bank before you sign. Several tools exist depending on the bank and the country.

An overdraft or cash facility: short-term credit attached to your account, to cover the gaps between your spending and your receipts.
A pledge of the contract (nantissement de marché): you give the bank a right over this contract's payments in exchange for credit. It often requires payments to go through your account with it, and the buyer often has to be informed in the prescribed form.
Invoice discounting or assignment of a receivable: the bank or a specialist firm advances you the amount of a validated invoice, less a fee, without waiting for the buyer to pay.
Supplier credit: a payment period negotiated with your suppliers. It is not a bank product, but it is often the first lever.

Always calculate the cost and compare it with your margin. Credit that is too expensive can swallow the contract's profit.

Acceptance and release of guarantees

For works, the end of a contract usually comes in two stages. A simple supply may have only one.

Provisional acceptance (réception provisoire). The buyer records that the work is complete, with minutes and possibly a list of snags, the defects to fix. It generally stops the risk of late penalties and opens the warranty period. Request it in writing as soon as you are ready, and clear the snags without delay.

Final acceptance (réception définitive). At the end of the warranty period, if defects have been fixed, the buyer issues final acceptance. This is generally when you get back the retention and the remaining guarantees.

These releases do not always come by themselves. Write to request the release (mainlevée), the act that frees the bank, and the balance of the retention. A forgotten guarantee keeps costing you fees and keeps your money blocked.

Your next reference

At acceptance, ask for a certificate of good performance (attestation de bonne exécution) signed by the buyer, with the subject of the contract, the amount, the dates and an assessment. This is what will let you prove this reference in your next bid, as Write a technical bid that gets through explains. The longer you wait, the harder it gets to obtain, because officials move on.

Deliver the contract and get paid