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Progress claims are a big headache for you and
EVERYONE in construction. Here are five ways to get
paid faster when working in construction.
Well-crafted contracts (and subcontracts) will clearly highlight the agreed
deadlines for submission and approval of claims. Be sure you know these
dates and hit them, same time every time. Informal arrangements will
inevitably lead to misunderstandings and avoidable aggro.
Whilst most pro-forma contracts (and subcontracts) set out the broad
content of information to be supplied with each claim, many do not
specify the form of the claim. Before work is commenced, agree on a
precise format. If you are the contract writer, provide a template at the
tender stage and confirm the requirement for it to be used before
awarding the contract. If you are the contract recipient be sure you
understand precisely what is required and that your staff and systems can
cope efficiently and effectively.
Revisit the awarded tender price and agree on a way to break down the
cost that works for both contract parties. Assessors will need sufficient
information to be able to assess a claim effectively. The tender
submission may have only required one figure, which will make it
impossible to make an effective judgement. A 20-page, full Bill of
Quantities breakdown may similarly be of little use as the level of
information may be too cumbersome to measure efficiently.
Always claim and approve on a project-to-date basis and never treat
variations separately. Many contractors and subcontractors fall into the
trap of issuing and accepting periodic tax invoices (only) in lieu of
correctly presented contract reconciliations. As a consequence of this
short-cut they inevitably suffer problems related to variation claims and
retention, much of which could have been avoided.
Building is a process of team work. It is in everyone’s interest that
everyone else gets paid on a timely basis for the work that they have done
(properly). The responsibility for payment administration should be
shared equitably; each party has an obligation to
provide sufficient information in respect of a claim and an equal and
opposite right to receive sufficient information in respect of that claim.
These top tips are brought to you by Progressclaim.com. Progressclaim.com is a unique platform specific to the Australian
construction industry that enables contract parties to administer payment
claims collaboratively online. It’s cloud based, can be accessed anywhere
and is super simple to use.
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