| S.No. | Field / Checkpoint | Reference | Status |
|---|---|---|---|
| A. ADVANCE REQUEST | |||
| A1 | Contract reference + value + advance % requested Acceptance: Within contract clause limits | Typically 10% of contract value, max 20% (CPWD Para 39) | OK NC NA |
| A2 | Mobilisation Bank Guarantee — 110% of advance Acceptance: Original BG enclosed | BG from scheduled bank | OK NC NA |
| A3 | Interest rate applicable (typically Bank Rate + 2%) Acceptance: Computation method documented | Per contract clause | OK NC NA |
| B. RECOVERY SCHEDULE | |||
| B1 | Recovery from RA Bills (typically 10% of each bill until fully recovered) Acceptance: Recovery schedule signed by both parties | Or fixed instalments per contract | OK NC NA |
| B2 | Recovery before final payment Acceptance: Audit trail in each RA bill | Full recovery before FPC | OK NC NA |
Mobilisation Advance is a working capital advance typically provided by the client to the contractor at the start of a project. The contractor uses this to: secure equipment + plant, hire initial workforce, establish site office + facilities, procure initial materials, build start-up infrastructure.
Typical mobilisation advance: 5-10% of contract value, secured by a Bank Guarantee equal to the advance amount + interest. The advance is recovered from RA bills at typically 10% of bill value, so by 50-60% project completion the advance is fully recovered.
Without mobilisation advance: contractor has cashflow problems at project start; slow mobilisation; delayed material procurement; loss of project schedule.
The Mobilisation Advance Request is the formal application by the contractor to the client requesting the advance per contract terms.
Mandatory information: 1. Reference to LOA / contract 2. Contract value + mobilisation % per contract + amount being requested 3. Bank Guarantee details: bank name, BG instrument number, BG amount = advance amount, BG validity period (must cover advance recovery period + safety margin) 4. Bank details for advance receipt — bank name, branch, account number, IFSC code 5. Justification + planned use — equipment procurement, site setup, initial material procurement (for client transparency) 6. Authorized signatory details + supporting power-of-attorney / board resolution 7. Acknowledgment field for client's processing
Standard recovery terms: - Recovery rate: 10% of each RA bill value (typically) - Recovery period: typically months 2-12 of project execution - Interest on advance: typically prime lending rate + 1-2% (varies by contract) - Bank Guarantee release: BG release matches recovery completion + 30-60 day buffer
Typical processing timeline: - Contractor submits request: Day 0 - Client review + acceptance: Days 7-14 - BG submission by contractor: Days 7-14 (concurrent) - Advance disbursement: Days 14-30 (after BG verified)
1. BG issuing delays — contractor's bank takes too long to issue BG; advance disbursement delayed. 2. BG amount mismatch — BG amount differs from advance request; client rejects. 3. BG validity inadequate — validity ends before full recovery; client demands BG extension. 4. Wrong bank — contractor uses non-authorized bank; client refuses to accept BG. 5. Conditional vs unconditional BG — contract requires unconditional; contractor submits conditional; rejected. 6. Interest rate dispute — contract doesn't clearly specify interest rate on advance; later dispute. 7. Recovery rate dispute — contractor requests slower recovery (5% vs 10%); client refuses. 8. Advance utilization questioned — contractor uses advance for unauthorized purposes (e.g., debts elsewhere); client audit raises questions. 9. Advance not recovered — for projects that get terminated early, advance may not be fully recovered; recovery from contractor's other dues becomes contentious. 10. No accountability for proper use — advance disbursed; contractor doesn't actually mobilize as planned; project still slow.
Companion formats: - Letter of Award (FMT-TND-014) — references contract terms - Performance BG Submission (FMT-TND-015) — separate BG for project performance - Performance BG Tracker (PMC-BIL-LOG-003) — for BG management - Deductions Register (PMC-BIL-REG-002) — advance recovery tracking - Contract Amendment Log (PMC-BIL-LOG-004) — for advance terms amendments - Plant Mobilization Report (PMC-EQP-RPT-002)
Contractual framework: - FIDIC General Conditions — Clause 14.2 (Advance Payment) - NHAI / MoRTH / CPWD standard contracts — Indian government-specific mobilisation terms - Indian Contract Act 1872 — Sections 73-74 (compensation + breach) - RBI Master Direction on LCs + BGs — banking regulations for mobilisation BG