Valuations and Interim Certificates

Valuations and interim
certificates
Purpose
Value the works taking account of:
–the physical work done on site;
–any extra work ordered by the client;
– the work of any specialist-nominated
subcontractors;
–the cost of running the site (the contractor’ s
preliminaries);
–the value of any materials delivered to site.
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
2
Timing
• In accordance with the JCT SBC/Q 2011, Interim
Valuations shall be made by the Quantity Surveyor
whenever the Architect/Contract Administrator
considers them necessary for the purpose of
ascertaining the amount to be stated as due in an
Interim Certificate
• Under the ICC – Measurement Version, the
methodology is different because it is the Contractor
who shall submit to the Engineer … a statement
showing the estimated contract value … carried out up
to the end of that month. It is the opinion of the
Engineer that decides the amount to be certified for
payment.
3
Methods of payment
• Stage payment
– Link to contract sum analysis and programme
– Link to agreed value profile
• Measure and value
– Remeasurement and application of contractor rates
• Payment notices
– The act requires notices to be provided.
• Retention
– Alternatives- bonds
– Release of moieties
– Retention limit under the ICC conditions
– the physical work done on site;

– any extra work ordered by the client;
– the work of any specialist-nominated subcontractors;
– the cost of running the site (the contractor’ s preliminaries);
– the value of any materials delivered to site.
4
Retention limits
5
Principles
• Accumulation
– Cumulative
• Deduction of previous payments
• Types of valuation
– External valuation
– Internal valuation
– Subcontract valuation
6
Valuations….
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd. 7
Techniques
• Inspection
– Easy and quick
– But inaccurate
• Measurement
– On site or from revised drawings
– Accurate and agreement assured
– Timely and difficult to isolate variations
• Ogive curve (reference to a model of planned expenditure)
– Simple and adjustments to forecasts can be made
– Inaccurate and slow progress may lead to over payment
• Gantt chart
– Easy to agree and relate to stage payment
– Inaccurate and can be abused by loading
8
Materials on site
• Lists and inspection
• Retention of title
– Sale of good act 1979
– Dawber Williamson
– Ensure entitlement
9
Interim valuation
10
External valuation- Contract
provisions
Components of an interim
•
valuation
measured work completed;
• ● incomplete measured work;
• ● work which may not be built to specification (but overlooked);
• ● work completed or partially completed which may be a variation to the contract;
• ● extra work carried out to the verbal instructions of the architect/engineer;
• ● work done by the contractor which may have to be valued on a prime cost basis
• (i.e. daywork);
• ● preliminaries, that is the contractor’ s fixed and time-related costs of running the site;
• ● materials brought to site which the contractor is entitled to be paid for;
• ● materials or components being prepared or fabricated off-site;
• ● the impact of progress which might be ahead of or behind the master programme;
• ● the contractor’ s entitlement to loss and expense for non-culpable delay and/or
• disruption;
• ● circumstances where the contractor may be entitled to extra preliminaries;
• ● the impact of adjustments to the time for completion of the contract;
• ● deductions from the contractor’ s payment due to set-off by the employer;
• ● deductions for liquidated and ascertained damages where the contractor has
• exceeded the time for completion of the contract.
12
Valuation of variations
• For similar items of work carried out under similar conditions with no
significant difference in quantity – use bills of quantities rates.
• For similar items of work carried out under dissimilar conditions and/or
with significant differences in quantity – use bills of quantities rates as a
basis for the valuation.
• For dissimilar items of work carried out under dissimilar conditions and/or
with significant differences in quantity – value the work at fair rates.
• Where an approximate quantity proves to be a reasonably accurate
forecast of the quantity of work required – use the rate or price in the bills
of quantities.
• Where an approximate quantity is not a reasonably accurate forecast of
the quantity of work required – use the rate or price in the bills of
quantities as a basis for valuation.
• Where the work involved in a variation cannot be properly valued by
measurement – use daywork as the means of valuation.
13
Daywork- prime cost and uplift
14
Daywork- records
15
Preliminaries
16
Internal valuation- relationship to
external valn.
17
Subcontractor valuations
18
Final accounts

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Valuations and Interim Certificates

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Valuations and interim

– the physical work done on site;

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