Notes on the parts of the job that cost money when they go wrong: payment timetables, valuations, variations, retention and final accounts. No product announcements.
An adjudicator's decision binds temporarily and is enforced by summary judgment in the TCC. Pay now, argue later. The defences are narrow, and insolvency can be one of them.
Construction ActUnder NEC the assessment date drives the timetable. With Option Y(UK)2 the payment becomes due seven days after it and the final date fourteen days after that. The gap is where a JCT habit costs a week.
RetentionNEC has no retention unless secondary Option X16 is included. Where it is, there is a retention free amount, a percentage, and a two-stage release at Completion and the Defects Certificate.
ReportsKeeping and handing over the golden thread of information is work. Work has a cost. Price it and put it in the estimate, rather than filing it under compliance and hoping.
ReportsThe same figures read for a different question. A client asks what it will cost; a funder asks whether the money already lent is still secured.
Construction ActAn application has to land in the right period and against the right due date. Serve it early or misdate it and it may do nothing, or nothing until the next cycle.
ReportsMonthly is the default and it is usually right. What matters more is that the report says what moved since the last one, and why.
Construction ActA termination made without proper grounds, or without following the procedure, can itself be a repudiatory breach. The other side can accept it and claim damages. Getting the ground and the process right is the whole game.
ReportsMost of what a surveyor knows about a project is not in the file. A handover that transfers only documents transfers about half of it.
Construction ActTen minutes with the contract particulars at the start of a job removes a category of error for its whole duration. What to extract, and what to do when the particulars are silent.
ReportsA cash flow forecast is not the valuation schedule with dates on it. It has to account for the payment timetable, retention, and the gap before payment lands.
ReportsThe obvious ones get declined. The damaging ones develop quietly on a project that started out perfectly clean.
ReportsOn a higher-risk building the Building Safety Act gateways are hard stops. A stop on the programme is a stop on the cash, and the QS has to price that in.
Construction ActContractual interest, statutory interest under the Late Payment of Commercial Debts Act, and the fixed compensation most claimants forget. Which applies, and why the choice is not freely yours.
Construction ActA payment notice has to say the sum considered due and how it is worked out, and it has to read as the notice it claims to be. Miss either and it is nothing.
ReportsA CVR compares what a project has earned with what it has cost, at the same date. Its value depends entirely on both sides being measured to the same point.
SecurityTitle to site materials passes to the employer once their value is certified and paid. But a contractor can pass only the title it holds, and a supplier's retention of title clause can defeat the employer even after payment.
ReportsAlmost every fee dispute is a scope dispute. The item that causes most trouble is what happens when the job runs a year late.
Construction ActWhether days are calendar or business days, whether the first day counts, and what happens when a deadline lands on a bank holiday. The small arithmetic that decides whether a notice was valid.
SubcontractorsInsolvency partway through a package raises questions about payment, materials, retention and completing the work. The answers depend on what was in place before.
ReportsProfit is earned when the work is done. Cash arrives weeks later, minus retention. Companies fail on the second of those, not the first.
ValuationsFor construction the tax point is usually the earlier of invoice or payment. Retention is different: its tax point waits until the retention is received or invoiced.
VariationsTime and money are separate entitlements with separate tests. Why an extension of time does not carry money with it, what has to be ascertained, and where these claims usually fail.
SubcontractorsSet-off is legitimate and routinely done badly. Without a valid pay less notice and a quantified basis, the deduction fails and the full sum falls due.
Construction ActTermination for default stops further sums becoming due until the account is drawn. Insolvency suspends the duty to pay or release retention from the insolvency event itself. The ordinary payment cycle no longer applies.
ReportsIt rarely disappears in one event. It leaks through small unrecovered items, each too minor to escalate, and the total only appears at the end.
VariationsUnder Design and Build a divergence between the ER and the CP is where money quietly disappears. Whether resolving it is a paid variation or the contractor's own risk depends on the contract, and on where the divergence sits.
ValuationsMonthly valuations, stage payments and milestones compared. How the date interacts with your own workload, and what happens to the statutory dates when the cycle slips.
SubcontractorsA subcontract described as back-to-back with the main contract usually is not, in the ways that matter. The gaps show up in payment dates, notices and delay.
Final accountWhen an employer terminates for contractor default, the reckoning that follows weighs cost of completion and damages against what the contractor would have been due. It is a different exercise from a final account.
SecurityEscrow, vesting certificates, staged payment and simply paying for less. Several cost nothing and are used far less often than bonds.
ReportsNine months at eight per cent margin, then two per cent in month ten. Nothing changed on site; the invoices simply caught up.
Subcontractors20% for verified registered subcontractors, 30% for unverified, 0% for gross payment status. The deduction comes off the labour element, not the whole payment.
Final accountDisruption is loss of productivity on work that still had to be done. It can arise with no delay to completion at all.
Construction ActConditional payment clauses are ineffective under section 113, with one narrow exception. What survives, what does not, and what fills the gap when a clause is knocked out.
SecurityThe main contract has a bond, a guarantee and warranties. The packages that will actually fail have a signed order and nothing else.
ReportsThe deepest point of the cumulative cash curve is the number a contractor has to be able to fund, and it arrives later than most people expect.
Final accountProlongation is the time-related cost of a longer job. The recurring error is calculating it at the tender rate over the wrong period.
VariationsAgreeing the price and the time effect of a change before work starts is better for everyone. Why the mechanism is used so rarely, and what acceptance actually settles.
VariationsThe CDP lets the contractor design a defined part of the works. It is valued by its own rules against the CDP Analysis, and keeping it on separate lines stops designed and measured work blurring in the certificate.
SecurityThe surety pays on presentation and questions afterwards. Courts will restrain a call only in narrow circumstances, which is why contractors resist them.
VariationsBetween the main contract and the packages there is always something no one included. Finding it early is cheap; finding it on site is not.
ValuationsSince 1 March 2021 the supplier of CIS construction services charges no VAT to a business customer who is not the end user. The customer accounts for it instead.
Final accountLoss and expense is reimbursement of actual loss, proved. The recognised heads are narrower than most claims assume.
ValuationsAssessment dates instead of valuation dates, Price for Work Done to Date instead of measured work, and a payment mechanism that differs by main Option. What a JCT surveyor needs to unlearn.
SecurityThe process is procedural and unforgiving. Most failed calls fail on the notice, the timing or the form rather than on the entitlement.
VariationsMost change control fails because it is slower than the site. A procedure that takes ten minutes gets used; one that takes a week gets bypassed.
Final accountJCT sets a period for the contractor to submit documents and a period for the account to be agreed. Both are routinely ignored until the account is two years old.
ValuationsMinor Works is a shorter form for simpler jobs. It still holds retention, but it has no loss and expense clause, and the differences catch surveyors who assume the SBC machinery is there.
Construction ActSection 112 gives a statutory right to stop work when the notified sum is not paid. The seven day notice, what can be suspended, and the costs and time recoverable when it is done properly.
SecurityThe wording decides everything: the trigger, the cap, the expiry and who proves what. Very few bonds are read before they are filed.
VariationsOnly the person named in the contract can vary the works. An instruction from anyone else is not one, however senior or however reasonable.
VariationsThe power to omit is a power to reduce the scope, not a power to give the work to somebody else. That distinction is a well-worn route into a damages claim.
SubcontractorsHalf an hour at Companies House before appointment is worth more than any amount of contract drafting afterwards. Most people do neither.
PracticeRebuilding the same spreadsheet every month, reformatting certificates, and finding out what was agreed. An honest look at the hours that do not appear on any fee proposal.
VariationsDetail that was always going to be needed is development. Detail that changes what was priced is a variation. That line is where design and build argues.
VariationsA prime cost sum is a placeholder for goods from a supplier the employer selects. It is adjusted against actual cost, and the adjustment is routinely forgotten.
SubcontractorsA claim is only recoverable upstream if it fits the main contract too, and the two sets of provisions rarely align as neatly as assumed.
VariationsA defined provisional sum is allowed for in the contractor programme and preliminaries. An undefined one is not. Getting the classification wrong changes what happens to time and preliminaries.
Time & completionThe employer can engage others and recover the cost, but only after giving the contractor the opportunity first. Skipping that caps the recovery.
ValuationsPreliminaries are not a percentage and they do not accrue evenly. Valuing them on the same curve as the works is the quickest way to over or under certify.
SubcontractorsEverybody knows which package is late. Very few files contain what would actually be needed to do anything about it.
Time & completionWear, damage by the occupier, failure to maintain and design changes dressed as defects. Sorting them out is most of the negotiation.
ValuationsFront-loading moves money forward without changing the contract sum. How it appears in a bill, in an activity schedule and in an application, and what a client-side surveyor can properly do about it.
ValuationsFixed price contracts assume prices stay still. When they do not, the fluctuations provisions decide who carries the difference, and most say the contractor does.
SubcontractorsA variation instructed above does not become a subcontract variation automatically. The two accounts are separate and they routinely diverge.
Time & completionTwo lists that look identical and do different jobs. One is a pre-completion tidy-up; the other is a document that releases retention.
Construction ActOne adjudication asks whether the notices were served. A different one asks what the work is worth. Confusing the two is how a payer ends up funding both.
ValuationsWhere quantities are approximate, the work is measured as executed and valued at the bill rates. The trap is the rate that stops being reasonable.
SubcontractorsMoney in a ring-fenced account, released to everyone on the same date. It protects the supply chain and constrains the main contractor.
Time & completionUnder JCT it usually is not, and that surprises both sides. Under NEC the Accepted Programme is central to how everything is assessed.
Audit trailAn adjudicator decides on documents in twenty-eight days. What contemporaneous means in practice, and why a reconstructed record damages the case it was built to support.
ValuationsPaying for materials before they reach site is possible under JCT, but only where they are listed and a set of conditions is met. Each one exists for a reason.
Final accountAn auditor is not looking for fraud. They are looking for figures that cannot be traced to a document, and every account has some.
Time & completionIf the machinery for fixing the completion date breaks down, the obligation becomes one to finish in a reasonable time. A narrow argument.
SubcontractorsA justified deduction made without the contractual mechanism is an unjustified deduction. Notice requirements, evidence, and why netting a contra charge inside a valuation is the wrong place.
Construction ActThe payment and adjudication provisions apply to construction contracts, and the definition has exclusions that catch people out.
Final accountA saving found by the contractor and a saving instructed by the client are different things. The contract rarely says so.
Time & completionOne is a commercial deal with a price attached. The other is a claim built on a refused extension, and it is a much harder argument.
Final accountOn JCT contracts the final certificate has conclusive effect on certain matters unless proceedings are commenced within a short window. What it settles, and what it does not.
Construction ActTwenty-eight days from referral to decision, binding until finally determined, and each side usually bears its own costs. What a QS needs to know before it starts.
Final accountMost accounts are not disputed, they are abandoned. Two or three items stall and the whole document sits there for two years.
Time & completionThe slack between when an activity can finish and when it must. Under most standard forms the answer is nobody, which satisfies neither side.
VariationsDayworks are the last resort in the valuation hierarchy, not the convenient one. When they are properly used, what the sheets must show, and the checks that take five minutes.
Construction ActThe Act puts the payment notice on the payer. Which document you issue depends on which side of the contract you are on, and the labels in use do not always match.
Final accountBoth sides know roughly where it will land. Getting there needs a structure, because item-by-item argument on ninety lines never converges.
Time & completionOccupation with neither partial possession nor practical completion leaves insurance, damages, retention and defects all unresolved at once.
Time & completionIt is not a warranty and it does not limit liability. It is a right to return and put things right, and it benefits the contractor as much as the employer.
ValuationsUnfixed materials are the most common source of interim overpayment. The conditions for certifying them, why off-site materials are treated differently, and what happens on insolvency.
Construction ActOnce the notified sum is fixed, that is what falls due on the final date for payment, whatever anyone thinks the work was worth.
Final accountAn account is only as good as what supports it, and those documents are created during the job or they are not created at all.
Time & completionBoth let the employer occupy part of the works early. One is planned in the contract, the other is the mechanism for when it was not.
Construction ActIf no payment notice is served, the payee can serve one instead, and the sum it states becomes the sum that must be paid. Why silence is the most expensive response to an application.
VariationsDaywork additions are stated separately for labour, materials and plant. Blending them into a single figure produces a total that cannot be agreed.
RetentionEverybody downstream dislikes it and the arguments against are strong. It survives because every alternative shifts the risk rather than removing it.
SecurityBy the time a hidden defect appears, limitation may have run and the contractor may have dissolved. Cover has to be arranged before the work starts.
VariationsA verbal instruction binds nobody until it is confirmed in writing. The confirmation route is in the contract, and it has a deadline.
ReportsA flat percentage contingency is a guess with a decimal point. How to build a register that produces a number, keep it current, and answer the question every client eventually asks.
RetentionThe remedies are the ordinary payment ones: an application, an adjudication, or interest. What does not work is waiting and asking again.
SecurityIt responds to the claim made this year, not the advice given six years ago. That distinction decides what happens when a policy lapses.
Time & completionThe certificate of making good releases the balance of the retention and clears the way for the final certificate. It is also the one nobody chases.
SubcontractorsProfit and cash are different questions and a job can be healthy on one and dangerous on the other. What to measure, how often, and the four figures that tell you where a project stands.
RetentionThe end of the rectification period is silent. No invoice, no application, no meeting, and that is exactly why the money sits there.
SecurityA fire two days after practical completion and a fire two days before are the same fire with entirely different consequences for who pays.
Time & completionThe contract gives the certifier a period to assess and a standard to apply. What it does not give is permission to wait and see how the job turns out.
RetentionHeld should equal cumulative value at the applicable rates, less releases. When it does not, one of three specific things has gone wrong.
Final accountHow to get from a submitted account to an agreed one. Sequencing the items, dealing with the three that are genuinely contentious, and why one meeting rarely does it.
SecurityPaying before the work happens reverses the normal risk of construction. The bond should reduce as the advance is recovered, and frequently does not.
Time & completionConcurrency is where an employer risk event and a contractor risk event both delay completion over the same period. The usual answer is time, without money.
RetentionVariations attract retention because they are work. Loss and expense normally does not, because there is no work in it that can be defective.
RetentionRetention held from subcontractors outlives the packages, the surveyors and sometimes the relationship. Why release is missed downstream more often than upstream.
SecurityThe contractor keeps its money and the employer keeps its security. Almost. The gap between those two positions is the whole of the negotiation.
Time & completionThe list of relevant events decides what can carry an extension of time. It is not the same list as the one that carries money.
RetentionThe direction matters entirely. Money you hold and money somebody holds for you behave in opposite ways when a company fails.
VariationsNot every instruction is a variation and not every variation arrives as an instruction. How to tell the difference, and what to do about verbal instructions on site.
SecurityThey create a contract where none existed, letting a funder or tenant sue the designer directly. Most projects have far fewer executed than the schedule suggests.
Time & completionA certificate of non-completion is a precondition to deducting liquidated damages under JCT. Without it the deduction fails, however clear the delay.
RetentionThe clause is in the contract. The separate bank account usually is not, because nobody asked for it while the money still felt safe.
ValuationsGross valuation, less retention, less previous payments, less deductions. The order the deductions come off in changes the answer, and the wrong order is surprisingly hard to spot.
Construction ActA pay less notice is the only lawful way to pay less than the notified sum. What it must contain, when it must arrive, and the four ways surveyors lose the right to serve one.
ReportsA cost report answers what the job will cost when it finishes, not what it has cost so far. What belongs in it, how to treat risk and unagreed variations, and why the first bad report matters.
SecurityA PCG costs nothing to give and is worth exactly as much as the parent behind it. Checking that parent is the whole exercise, and it takes twenty minutes.
Time & completionEach section has its own completion date, its own damages and its own retention release. Treating them as one contract quietly holds money that should have gone back.
RetentionMany contracts cap the total. Once the cap is reached, deductions stop, and continuing past it is over-deduction rather than security.
SubcontractorsTwo contracts, two timetables, and a main contractor in between funding the difference. How the gap arises, how large it gets, and what can be done at procurement.
Time & completionThe calculation is the easy part. The deduction fails if the certificate of non-completion or the notice is missing, and the whole sum becomes repayable.
SecurityIt has a cap, an expiry and a trigger, and most of the disappointment comes from the trigger. Conditional bonds are claims to be established, not forms to be filled in.
RetentionThree per cent, five, or nil. The contract particulars decide, and the choice is a judgement about risk rather than a convention to be followed.
Final accountThe structure of a final account, from contract sum to final balance. Which adjustments belong where, why netting destroys reconciliation, and the checks that find the missing few thousand pounds.
Time & completionPractical completion is not a tidy site or a finished snagging list. It is a certificate, and the moment it is issued five separate things change at once.
RetentionSecurity that the contractor will return and put things right. Not a discount, not a performance incentive, and not a reserve against the account.
RetentionThe rate halves at practical completion and the balance falls away at the end of the rectification period. Why the second release is the most commonly forgotten money in the industry.
VariationsContract rates, pro-rata, fair rates, dayworks or a lump sum quotation. The rules in order, and why recording which one you used matters more than the number itself.
ValuationsMeasured work, variations, materials, fluctuations, loss and expense. What is properly included at interim stage, what waits for the final account, and why the distinction protects you.
Construction ActDue date, payment notice, final date for payment and pay-less notice. What each one means, how the days are counted, and what happens when you miss the one that matters.
Something you would like covered? Write to support@qscope.co.uk. The list of topics comes from what surveyors actually ask.
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