Contractor’s Quantity Surveyor (QS) Reducing Your Payment?

Stop The Contractor’s QS Reducing Your Payment?

You can bet your mortgage on the fact that if you are working for a Main Contractor, their Quantity Surveyor will want to pay you less than you apply for.

This post mainly provides help and advice regarding:

  • Contractor’s Quantity Surveyor (QS) reducing your payment.
  • The Contractor’s QS reducing the Subcontractors account/payment.
  • Ways to ensure you get paid the full amount.
  • Ways to ensure your account is properly valued.
  • Making sure your applications for payment are properly detailed.
  • Payment and Pay Less Notices.
  • The Contractor’s obligation to value your works fairly and reasonably.
  • Section 110(2) of the Housing Grants Construction and Regeneration Act 1996 (Construction Act).

contractor's quantity surveyor (qs) reducing your paymentWhether this is company policy, secret training that only Main Contractor’s surveyors receive, human nature or plain stupidity, is neither here nor there. It is a fact, and it’s a problem our Consultants are regularly helping you guys to resolve every day of the week.

Even if the Contractor pays you close to what you ask for during the progress of the work, they will almost certainly undervalue your payments towards the end of your work.  This is particularly the case where variations have occurred and you are now applying for more than the original contract sum.

Contractor’s Quantity Surveyor (QS) reducing your payment?  For the moment, it does not matter why they are paying you less. What we are talking about here is how to try and stop them doing it!

How To Prevent Under-valuation

This can be done by a combination of two techniques.

Technique 1

Firstly, your applications need to be very well detailed. This needn’t be such a chore once you get organised. Use the Tender Summary or the Bill of Quantities as a basis for your applications.  Make sure that they are well presented and set out clearly so that they are easy to follow.

Do not use shortcuts or add items together for convenience, and don’t assume that anyone else is as familiar as you are with your works and your claim.

If necessary, break larger sections of works down into smaller components, even if they aren’t broken down that way on the tender summary.  For instance, let’s take a simplified example, and say you had a tender summary item and claimed as follows:

Value £ % Complete Claim
Fire Alarm 25,000.00 85% 21,250.00

 

Without any further detail, it is not easy to determine whether this item is 85% complete or 50% complete.  Don’t forget we are talking about the percentage complete from a financial point of view, not necessarily a physical point of view.

You may therefore wish to break the item down into its component parts, as follows:

Fire Alarm  Value £  % Complete  Claim
 Local Zone Panel  5,000.00  80%  4,000.00
 Cabling  8,000.00  100%  8,000.00
 Terminations  2,000.00  100%  2,000.00
 Traywork  4,000.00  100%  4,000.00
 Breakglass Points  1,000.00  50%  500.00
 Smoke Detection  5,000.00  50%  2,500.00
 Prelims  250.00  100%  250.00
 Total  £21,250.00

 

The first difference to note between these two different ways of presenting broadly the same facts, is the number of items that the Contractor’s surveyor has to consider.  If he or she wants to disagree with our simple 85% version, he/she can simply and arbitrarily say “I think it’s only about 70% complete” and suddenly we are £3,750.00 worse off.

Under-valuation by 15% across the board can amount to a massive reduction!

In the second presentation, he/she has to work a lot harder to find something to disagree with and here is where the second part of the strategy comes in.

Technique 2

You must develop a working relationship with the person certifying your account for payment.  Don’t allow them to simply value your account in isolation without consulting you.  They may want to do it that way but don’t allow that to happen.

Suggest that you meet on site to agree your valuation or at the very least, go through it together over the telephone. If he/she doesn’t agree with what you have claimed, ask them to tell you why.  As a very minimum, you should seek to get a copy of their valuation, which in all probability will be your application with their annotated quantities or values.

Try and keep this on a friendly and co-operative level. After all, you are only trying to make their life easier.

If you can’t keep it friendly, then be assertive.  Ordinarily they have an obligation to value your works fairly and reasonably, and you should be familiar with what the contract actually states.

You should be aware that you now have a statutory right to know how the value being paid has been calculated, by virtue of the Housing Grants Construction and Regeneration Act 1996. Section 110(2) of the Act, which states:

“Every construction contract shall provide for the giving of notice by a party not later than 5 days after the date on which a payment becomes due ….. specifying the amount (if any) of the payment to be made …… and the basis on which that amount was calculated.”

Make no mistake, producing and agreeing interim applications can be a bit of a time-consuming process. However, if you don’t do it properly, then don’t get angry when your applications are undervalued.

Don’t make it easy for the Contractor’s Quantity Surveyor to undervalue your account!

Want To Know More?

So, there we have it.  We are here to provide you with not only great free advice via our website, but we also provide practical hands-on help to apply the right strategies, principles and techniques at the appropriate time, to make your business even more successful.

I have been assisting Specialist Contractors just like you, to resolve payment and all sorts of other problems for the last 30 years.  And, Streetwisesubbie.com via our network of Consultants has been providing services to our Buddies (members) for the last 12 years.

We are pretty confident that we can help you if the contractor’s Quantity Surveyor (QS) reducing your payment, so please feel free to contact our friendly team and speak directly to an expert on 01773 712116.  Initial advice is free, subject to you being a UK based Specialist Contractor, Trade Contractor or Subcontractor.


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