Valuation

How it's calculated

On a measured contract (with BoQ), the QS measures the actual quantity executed and multiplies by the BoQ rate. On a lump-sum contract, the QS assesses the percentage of work complete against each activity. On a target contract (NEC C/D), Defined Cost is assessed against the activity schedule.

Variations approved during the period are added. Materials on site (if the contract permits) are valued. Retention is deducted (typically 3–5%). The result is the gross valuation for the period; less previously certified gives the next interim payment.

How it connects to other commercial surfaces

Each valuation moves the actual line on the project cashflow. The PCSR's committed and anticipated columns move when variations approved during the valuation period flow through. Final account is reached when the last valuation equals the contract sum plus all approved variations less retention recovered.

Common pitfalls

• Valuing materials on site without proper safeguards. If materials on site are valued and paid for, the contract should require they be tagged, insured, and ringfenced. Otherwise the client pays for materials that walk off-site.
• Inconsistent variation treatment. Variations agreed during the valuation period should be in the valuation. Variations pending pricing should not. Many consultancies are sloppy here, leading to under- or over-valuation.
• Missing the certifier deadline. JCT typically requires the certificate within 5 days of valuation. Late certification triggers interest. Consultants who batch valuations are exposed.

Related

• What is a PCSR? →
• What is a final account? →
• Cashflow forecasting module →