Constructor Milestone-Draw Terms
FOUNDATION CONSTRUCTOR MILESTONE-DRAW TERMS
(“Milestone-Draw Terms”)
Parties. These Milestone-Draw Terms bind any construction company or authorized representative (“Constructor,” “you”) that accepts an award or performs works under a Foundation vertical project, and the Foundation affiliate that administers the project and escrow arrangements (“Foundation”).
Incorporation. These Milestone-Draw Terms are incorporated by reference into the Constructor Program Terms, the Constructor NDA, the Tender Rules, every award notice, and the construction contract for the project. If the construction contract states a stricter rule on security, verification, or payment, the stricter rule controls for that project.
1. Purpose
1.1 Investor and project funds are not paid to Constructor at closing as an unrestricted advance.
1.2 Amounts allocated to construction are held in escrow (or an equivalent controlled account structure) and released only as draws against verified milestones.
1.3 The goals are: protect investor capital; align payment with real progress; prevent hostage behavior after underbidding; create an auditable trail investors can inspect from Capital.
2. Definitions
2.1 “Escrow” means the account or structure designated by Foundation (or its escrow agent) to hold construction-related funds pending release.
2.2 “Milestone” means a defined progress event in the project schedule (for example: foundations complete; structure watertight; MEP rough-in complete; temporary certificate / equivalent local sign-off), with objective completion criteria stated in the construction contract or milestone schedule.
2.3 “Verification” means written confirmation by Foundation’s designated engineer or an independent supervisor appointed by Foundation that the Milestone criteria are met, based on inspection, documents, and evidence - not solely on Constructor’s claim.
2.4 “Draw” means a release of a defined amount from Escrow to Constructor’s designated bank account following Verification.
2.5 “Verification Event” means the Platform (or escrow) record that stores the Verification outcome, evidence references, amount approved, and timestamp.
2.6 “Release Event” means the instruction to the escrow agent to pay the approved Draw. Under these Terms, Verification Event and Release Event are the same logical record: no separate informal “approval” outside that record.
3. Escrow - structural rule
3.1 Commitments from investors are directed to Escrow (or staged into Escrow per the Capital and project documents), not to Foundation’s general operating account as Constructor’s money, and not directly to Constructor.
3.2 At land closing or project start, only amounts expressly allowed under the project documents (for example land price, closing costs, agreed pre-construction items) may leave Escrow. Construction draws follow Milestones only.
3.3 Constructor has no property interest in Escrow funds until a Draw is properly released under these Terms and the construction contract.
4. Bank account for Draws
4.1 Draws are paid only to the bank account registered on the Platform whose account name matches Constructor’s legal entity name.
4.2 Mismatch, third-party accounts, or personal accounts of principals are not permitted without Foundation’s prior written waiver (rare and documented).
4.3 Constructor must keep account details current. Failed payment due to wrong details does not accelerate any Milestone or waive Verification.
5. Milestone schedule
5.1 The construction contract (or an annex) lists Milestones, completion criteria, target dates, and the maximum Draw amount or percentage associated with each Milestone.
5.2 Foundation may require a retention percentage (holdback) across Milestones, released at final completion or after a defects period, as stated in the contract.
5.3 Change orders that affect price or Milestone definition are valid only if agreed in writing through Foundation’s change-order process. Verbal site instructions do not move money.
6. How a Draw is earned
6.1 Constructor notifies completion of a Milestone only through the Platform (or the channel stated in the contract), with required evidence (photos, certificates, supplier tickets, survey, local authority sign-off, as specified).
6.2 Foundation or the independent supervisor inspects and either:
- Verifies (criteria met; full or partial amount as rules allow), or
- Rejects (with reasons and required remedial actions), or
- Verifies in part (if the contract allows partial Draws for partial completion).
6.3 Constructor’s own progress report, invoice, or percentage claim is not sufficient for release. Self-reporting without Verification does not trigger payment.
6.4 Upon Verification, the Platform records the Verification Event / Release Event and Foundation instructs the escrow agent to pay the approved amount to the registered account.
7. Independent supervision
7.1 Foundation may use its own qualified staff or an external independent supervisor. Constructor shall provide safe access to the site and to documents reasonably required for Verification.
7.2 Obstruction of inspection, falsified evidence, or staged temporary works intended to mislead Verification is material breach and grounds for suspension of Draws, termination rights under the construction contract, and Platform enforcement.
7.3 Disputes over whether criteria are met are resolved under the construction contract’s dispute mechanism; meanwhile, unreleased amounts remain in Escrow.
8. Underbidding, hostage risk, and suspension
8.1 If Constructor cannot perform because the bid was below a credible cost to complete, Foundation may, without prejudice to other rights: suspend Draws; require a recovery plan; call on performance security; replace Constructor per the contract; and recover excess costs as the contract allows.
8.2 Stopping work to force early or unverified payment (“hostage” conduct) is material breach.
8.3 Foundation may suspend Draws if insurance lapses, required license/grade becomes invalid for the works, bond is not maintained, or serious safety/legal breaches occur, until cured.
9. Performance security
9.1 Performance bond or bank guarantee must remain in force as required by the award and construction contract for as long as stated (often through completion plus defects period).
9.2 Failure to maintain security is grounds to withhold Draws and exercise contract remedies.
9.3 Calling on security follows the instrument and the construction contract; these Terms do not limit those rights.
10. Investor updates and transparency
10.1 Investor-facing updates on Capital are based on Milestone records: what was verified, what was released, evidence references, next Milestone and target date - not marketing narrative alone.
10.2 Constructor agrees that Verification and Release records (and reasonable related photos/certificates) may be shown to investors and auditors under the project and Platform terms.
10.3 On-time, verified Milestones may improve Constructor’s Platform score; repeated failures, false evidence, or suspended Draws may reduce it and affect future tender eligibility.
11. Taxes, withholdings, and set-off
11.1 Constructor is responsible for taxes on amounts received.
11.2 Foundation or the escrow agent may withhold amounts required by law or by the construction contract (including retention, set-off for defects, back-charges, or liquidated damages if the contract provides).
11.3 Payment of a Draw is not acceptance of defective work and does not waive defect claims.
12. Final completion and retention
12.1 Final Draw and retention release require Verification of final completion criteria (and local completion / occupancy equivalents as applicable), delivery of as-builts, warranties, keys, and any other close-out items in the contract.
12.2 Defects liability or warranty obligations survive payment as stated in the construction contract.
13. No advance against unverified work
Except for items expressly listed in the project documents as payable at start (if any), Constructor is not entitled to advance payment for unverified work. Any goodwill advance would require separate written approval and security; none is promised by these Terms.
14. Records
14.1 Constructor shall keep project records for the period required by law and the construction contract (and at least five years where law is shorter and the contract so requires).
14.2 Foundation may audit Draw-related records on reasonable notice.
15. Breach and enforcement
15.1 Breach of these Milestone-Draw Terms is a material breach of the Constructor Program Terms and the construction contract remedies framework.
15.2 Foundation may suspend Platform bid rights, suspend Draws, terminate access, and pursue damages, injunctive relief, and security calls as applicable.
15.3 False evidence submitted for Verification is Material Misrepresentation.
16. Governing law
These Milestone-Draw Terms follow the governing law and dispute resolution provisions of the Constructor Program Terms for the vertical running the project, except that disputes under the construction contract may follow the dispute clause of that contract if it expressly so provides.
17. Amendments
Foundation may update these Milestone-Draw Terms with Platform or email notice. For a given project, the version referenced in the award / construction contract controls that project. New versions apply to new awards after the effective date.
IN WITNESS WHEREOF, acceptance is effected by electronic acknowledgment on the Platform (apply checklist, legal wall, award acceptance, or contract signing package) and is binding on the Constructor and its authorized representative.