None of it is the arithmetic. The due date, the remeasure, double counting with variations, cost fluctuation in a negative month and a reason for every difference.
A payment claim goes wrong in the same handful of places every month. None of them is the arithmetic. The Construction Contracts Act means a late schedule, or one without reasons, can make the claimed amount payable whether or not the work was done, so these checks are not about being difficult. They are about getting a defensible number out the door on time.
Work out when the schedule is due under the contract and put it in the diary before you open the claim. A perfect assessment issued a day late is worth nothing. Check the claim is in the form the contract requires and was served the way it requires, because a defective claim changes the timetable.
Quantities get checked against what is in the ground, from survey, dockets or my own measurement. Verified items pass. Adjusted items carry a reason. Items I can’t verify are named as such, not guessed at. On one monthly claim I went back to site and remeasured before the schedule went out. That is a normal part of the job. If a quantity depends on a hold point that hasn’t been released, it isn’t complete yet, whatever the QA sheet says.
This is the one that catches people. A variation assessment moves extra quantities of a measured item into the remeasure, because that is where they belong. The following month the contractor claims them in the remeasure, correctly, but also leaves the variation figure where it was. Or a lump sum item covers work that a variation has also priced. Check every variation line against the schedule items it touches. Everything gets paid once.
A claimed percentage is the contractor’s opinion. The schedule states the assessed percentage and why, particularly on preliminary and general items, which are often claimed evenly across the programme regardless of what has been delivered, or on structures where the last pour hasn’t happened. Not finished means not paid as finished.
Instructed and valued, or provisionally assessed, goes in. Claimed on the basis that the contractor believes it is a variation, without an instruction, gets a line in the schedule saying exactly that. Silence on an item is where the later argument comes from. Where a deduction or back charge is being assessed but isn’t ready, it is stated and reserved under its clause, not quietly netted off. When a back charge holds →
On NZTA contracts the cost fluctuation adjustment is worked under the contract’s formula each month. When the index moves the wrong way the adjustment is negative. It is not zero. It is carried and trued up. The cumulative position is what matters. I have seen a contract administrator and a contractor take opposite views on this for months. Work it from the formula, show the cumulative and put the method in the schedule so it stops being an argument.
Retention at the contract rate to the contract limit, stated separately. Then the part that matters most under the Act. Where the scheduled amount is less than the claimed amount, the schedule shows how the scheduled amount was calculated and why it differs, item by item. “Not agreed” is not a reason. “Assessed at 60 percent, the last 2 spans not yet poured, site record 14 September” is a reason.
An Engineer’s Representative can do every check above and prepare the schedule. Certifying it is the Engineer’s own power unless it has been delegated in writing. Sort that out before the first claim arrives. What can and can’t be delegated →
The same treatment on a small job as a large one. Verified items pass, adjusted items carry a reason, unverified items are named. The variation register and the remeasure are checked against each other every month so nothing is paid twice. And the reasons are written so the contractor can see exactly where the number came from and the Engineer can sign it without a second look. On my current contract that is every claim so far without a dispute on the schedule itself.
If you want a claim checked before the schedule goes out, send me the claim, the schedule of prices and the variation register. Turnaround is set on the first call so the schedule is not late. Claim assessment →
Common questions
If no valid schedule is served within the time allowed, the claimed amount can become payable in full. That is why the due date is the first thing to work out when a claim arrives, before the assessment starts.
No. This is a common error. Where a variation assessment has moved extra quantities of a measured item into the remeasure, the variation figure has to come down by the same amount. Check every variation line against the schedule items it touches each month.
The adjustment for that month is negative. It is carried and trued up against the cumulative position, not treated as zero. State the method in the schedule so it is not re-argued monthly.
No. The Act requires the schedule to show how the scheduled amount was calculated and the reason for any difference from the claimed amount. A bare statement that it is not agreed does not meet that test.
Only if the Engineer has delegated that power in writing. Otherwise the ER prepares and the Engineer certifies.
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