Interim Certification Under Pressure from Client and Contractor
A QS is the client's certifier on a $28 million mixed-use development. The contractor's interim payment application 14 is $2.4 million. The QS's assessment is $1.6 million: $300,000 of work is defective and not yet rectified; $250,000 relates to variations not instructed in writing; and $250,000 is for materials delivered but not yet incorporated, which the contract does not allow to be paid before installation. The client's finance director telephones the QS and says the company's bank covenant is close and the QS must certify only $1.1 million as a commercial favour, adding that future phases will follow. The contractor's project manager says work will stop unless at least $2.0 million is certified within 48 hours. The QS's firm relies heavily on this client for future work. The QS has measurement records and a site diary supporting the $1.6 million assessment.
1. State the amount the QS should certify and justify the treatment of each of the three disputed categories.
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The QS should certify $1.6 million, not $1.1 million and not $2.0 million.
The $300,000 for defective work should be excluded until the defects are rectified and accepted, unless the contract expressly provides otherwise. Certification is for value properly executed; paying for defective work would transfer the risk of non-compliance to the client.
The $250,000 for variations should be excluded from this certificate because there is no written instruction. If the work was done under an oral instruction, it may become payable once the instruction is confirmed or ratified under the contract, but the certifier cannot treat an uninstructed change as a certified variation merely because the contractor has performed it. The QS should identify the items and ask for the instruction to be regularised.
The $250,000 for delivered but unincorporated materials should be excluded because the contract does not allow payment before installation. The QS should not create a special payment route outside the contract, even if the materials are stored on site.
The resulting certificate is $2.4m - $0.3m - $0.25m - $0.25m = $1.6m. The QS should issue the certificate with a clear breakdown and, where the contract requires, a withholding notice or statement of reasons. The assessment should be supported by the measurement records and site diary.
2. Explain how the QS should respond to the finance director's instruction and the contractor's threat. Include the professional and commercial risks of certifying either $1.1 million or $2.0 million.
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The QS should respond in writing to the finance director, politely but firmly, that certification is a contractual valuation, not a commercial favour. The letter should enclose the breakdown and explain that $1.1 million is unsupported by the assessment and could expose the client to a payment dispute, interest, adjudication costs or a suspension of work. The QS should not accept a instruction to under-certify without recording that it is contrary to professional advice.
The contractor's threat to stop work is a separate commercial and contractual issue. It does not justify over-certifying. The QS should acknowledge the threat, ask the contractor to substantiate the amount claimed and deal with any genuine entitlement through the correct valuation and early-warning process. Certifying $2.0 million would pay for defective work, uninstructed variations and unincorporated materials, and would expose the client to irrecoverable overpayment.
Professionally, certifying either figure against the QS's own assessment undermines impartiality and independence. It risks disciplinary action, loss of registration or accreditation, and negligence liability to the client. It also damages the firm's reputation with contractors and auditors. Commercially, the client may later recover an overpayment, but the QS may still be liable for the consequences of a certificate that was not a proper valuation. Yielding to pressure because the firm relies on future work is exactly the conflict the profession expects the QS to resist.
The QS should document the calls, confirm the advice in writing, escalate internally to a partner or ethics lead, and if the client insists on an improper certificate, refuse to issue it and consider whether the engagement can continue.