What you should pay the contractor are those items of work in the bill of quantities that it has carried out, see clauses 50.2 and 11.2(28). If it has carried out none then it will be due nothing. So, the answer will depend upon the items you have in the bill of quantities and the rules set out in the method of measurement you have specified in the contract data.

You cannot withhold any monies for the lack of bond, unless you have an item in the bill of quantities for the bond – in which case that item will not be paid until the bond is provided. However, you should not let the matter rest there. A suitable bond should have been provided within 4 weeks of the contract date and all the time you do not have it you are at risk if the contractor defaults. 

Ultimately you are entitled to terminate if the situation continues – see the second bullet of clause 91.2. We suggest that your project manager gives the contractor a default notice under this clause. That will then enable you to terminate if this default continues for a further 4 weeks after your project manager’s notice has been given. It will, of course, be up to you whether or not to use this sanction, but your project manager should issue a notice in any event to give you the option.

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