The Progress Claim With No Measured Work
A $6.2 million school extension is let on a lump-sum contract with monthly interim payments based on measured work. The contractor's month-4 claim is $980,000, against the architect's assessment of $610,000. The difference is largely a $300,000 item for 'preliminaries and site establishment' claimed in full, although the contract provides for preliminaries to be spread pro rata over the contract period. The contractor has also claimed $70,000 for variations it says were instructed verbally on site by the architect's clerk of works. The architect's clerk of works confirms he told the contractor to 'move a couple of partitions' but did not issue a written instruction. The contractor is threatening to slow the works if the certificate is not increased.
1. How should the architect assess and certify the month-4 payment?
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The architect should certify the assessed amount of $610,000 (adjusted for any valid variation) and give reasons for each disallowed item.
Reasoning:
- Preliminaries. The contract spreads preliminaries pro rata. Claiming them in full at month 4 front-loads the contract and is contrary to the payment mechanism. The architect should calculate the pro rata amount and disallow the balance, explaining the basis.
- Verbal instructions. The contract almost certainly requires variations to be instructed in writing. However, the clerk of works did give a direction, and the work appears to have been done. The architect should not simply reject the $70,000; instead, value the work actually carried out if it is a genuine change, and regularise it by issuing a written confirmation/instruction now. Rejecting valid work on a technicality invites a dispute the architect may lose.
- Check the measurement. Before certifying, the architect should verify measured quantities against the assessment, not just accept the contractor's figures or the QS's without review.
- Do not respond to the slowdown threat by inflating the certificate. Certification must reflect the architect's honest assessment. Paying more to avoid friction is a breach of the certifier's duty and exposes the architect to a claim from the client.
- Issue the certificate and a separate assessment note setting out allowed and disallowed items, so the contractor understands the basis and can challenge it through the contract's dispute procedure.
2. What should the architect do about the clerk of works' verbal direction and the contractor's threat to slow the works?
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Two separate management actions:
On the verbal direction:
- Regularise it in writing immediately. Issue a written instruction confirming the partition move, dated now, and note that it is a confirmation of a prior verbal direction. This closes the procedural gap and lets the variation be valued.
- Clarify authority. The clerk of works should not be issuing instructions that change the works. The architect should remind the clerk of works, in writing, of the limits of delegated authority, and remind the contractor that only written instructions from the architect are valid.
- Value the change properly. Obtain a quotation or measure the work, agree the valuation, and include it in the next certificate rather than this one if it cannot be agreed in time.
On the slowdown threat:
- Do not negotiate under threat. The architect should record the threat in writing and remind the contractor of its obligation to proceed regularly and diligently.
- Notify the client. The client needs to know that delay may follow and that the contract's delay and damages provisions may apply.
- Follow the contract. If the contractor does slow down, the architect should document progress against programme, issue notices as the contract requires, and let the contractual machinery operate rather than making ad hoc concessions.
- Keep the certification independent. The payment decision and the progress dispute should be handled on separate tracks, each documented.