Creating an Effective Schedule of Items for your Payment Claims

It is important to use an accurate schedule of contract items for claiming progress payments because it gives your client sufficient information to make a proper assessment and it is much more difficult to have your claim cut down or brushed off. If it is, you want to be able to challenge it immediately.

Bills of Quantities or bid take-off is often used as the basis for a schedule of items for progress payment claims. The bill of quantities is an important tool in the contractual interface between the parties, but it is not the right cost breakdown for claiming payment for a number of reasons, namely:

1) The BQ is not related to the flow of work, so relating completed work to each item is something of a guess;

2) It is too detailed for the purpose. Inspections for progress claims should be able to be done quickly. Adding % complete to the many labour and sundry items in a bill of quantities is time-wasting and of no benefit.

The value of the bill of quantities is in contract establishment and valuing variations.

The correct cost breakdown structure for valuing progress payments is the construction program or schedule. Bill of quantities items can be easily allocated to program activities. Most estimating programs have a facility to allocate bq items to other codes, including activity codes. Alternatively it can be done using a spreadsheet matrix.

Spreadsheets can be quickly imported into the powertool to create a meaningful schedule of items for quick site assessment of the value of work in progress (earned value). Using a hand held device, such as iPhone or iPad, linked to the powertool makes this a very efficient process.

Thepowertool automatically builds and serves your Payment Claim to comply with Australian (and NZ, Singapore and Malaysian) security of payment legislation. The schedule can also be used to update progress on your construction program.

Contact john.lowry@thepowertool.com.au for more information on setting up an effective payment schedule for your project.