Interim valuations in construction refer to the periodic assessment and valuation of the work completed by a contractor during the course of a construction project. These valuations are typically carried out by a quantity surveyor at regular intervals, such as monthly or bi-monthly, as specified in the construction contract. Interim valuations serve as the basis for issuing interim payment certificates, which authorize the release of partial payments to the contractor for the work completed during a specific period.
The main purposes of interim valuations are to:
- Maintain cash flow: Interim valuations ensure that contractors receive regular payments for the work they have completed, helping them maintain adequate cash flow to cover labour, materials, and other project-related expenses.
- Monitor progress: The interim valuation process allows the client and quantity surveyor to monitor the progress of the construction work, ensuring that the project is on track and in compliance with the contract specifications.
- Identify discrepancies: Interim valuations help identify any discrepancies between the planned work and actual work completed, allowing for timely adjustments or corrective actions to be taken.
- Manage risk: Regular interim valuations provide an opportunity to identify and address potential risks, such as cost overruns or schedule delays, before they escalate into significant problems.
The interim valuation process typically involves the following steps:
- Site inspection: The quantity surveyor conducts a site inspection to assess the work completed, materials used, and other relevant factors.
- Measurement: The quantity surveyor measures the completed work and compares it to the project’s contract documents, such as the Bill of Quantities (BoQ) or Schedule of Rates.
- Calculation: Based on the measurements, the quantity surveyor calculates the value of the work done, taking into account any agreed-upon rates, deductions, or retentions specified in the contract.
- Payment certificate: The quantity surveyor prepares an interim payment certificate, which details the value of the work completed, any deductions or retentions, and the total amount due to the contractor. This certificate is submitted to the client for approval and payment.
Interim valuations play a crucial role in managing construction projects by ensuring fair compensation for the contractor, maintaining transparency, and promoting effective communication between project stakeholders.
