If you work with JCT Design and Build, one of the key payment choices at tender or contract stage is whether interim payments are made under Gross Valuation Alternative A vs Gross Valuation Alternative B.
At first glance, they can seem very similar. Both are methods of calculating what is due at each interim valuation. But the practical difference is important, because it affects how progress is valued and how easy it is to administer the payment process.
Start with the basics: What is a gross valuation?
A gross valuation is essentially the total value of work properly executed up to the valuation date, before deducting what has already been paid.
From that gross figure, you then typically deduct:
- previous payments
- retention
- any other permitted deductions
That produces the amount due for the interim payment.
Under JCT DB 2024, the contract provides two ways of arriving at that gross valuation: Alternative A and Alternative B.
Alternative A – Stage or Milestone Style Payments
Under Gross Valuation Alternative A, payments are based on a pre-agreed structure, usually linked to stages, milestones, or other predetermined payment amounts.
This means the parties agree in advance what value attaches to certain parts of progress. For example:
- completion of foundations
- watertight shell
- first fix complete
- practical completion of defined areas
So rather than assessing the exact value of all work done from scratch each month, the valuation follows the agreed payment structure.
Why parties use Alternative A
Alternative A is often attractive where:
- the scope is clear
- the works can be broken into defined stages
- the employer wants predictable payment events
- the parties want simpler valuation administration
Strengths of Alternative A
- easier to administer once the stage values are agreed
- less room for monthly argument about measurement
- can improve cashflow certainty
Weaknesses of Alternative A
- less flexible if progress does not follow the planned sequence
- arguments can arise over whether a stage is truly complete
- can become awkward if the stage breakdown is poorly drafted
In practice, Alternative A works best where the payment schedule is carefully prepared and there is little ambiguity over what triggers entitlement.
Alternative B – Traditional Value of Work Done
Under Gross Valuation Alternative B, the interim valuation is based more traditionally on the value of work properly executed to date.
This is the more familiar approach for many QSs. Instead of asking, “Has this milestone been achieved?”, you ask, “What is the value of the works completed up to this valuation date?”
That tends to involve assessing:
- completed work on site
- materials and goods properly included
- other sums properly due under the contract
This approach is often seen as more fluid because it reflects actual progress as it happens, rather than locking payment into pre-set stages.
Why parties use Alternative B
Alternative B is often preferred where:
- the works are complex
- progress is unlikely to follow neat milestones
- monthly valuation needs to reflect actual output
- the employer wants a more conventional valuation approach
Strengths of Alternative B
- more responsive to actual progress on site
- often more suitable for complex or evolving works
- familiar to many contract administrators and QSs
Weaknesses of Alternative B
- requires more detailed monthly assessment
- can create more room for disagreement over value
- can be more admin-heavy than milestone payments
So what is the real difference?
The simplest way to explain it is this:
Alternative A = payment by pre-agreed stage or milestone structure
Alternative B = payment by valuation of actual work done to date
That is the core commercial distinction.
Alternative A is more about whether agreed payment events have been achieved.
Alternative B is more about what the work completed is worth at the valuation date.
Which one is better?
Neither is automatically better. It depends on the job.
For a straightforward project with a clean programme and clearly identifiable stages, Alternative A can work very well.
For a more complex build, or where progress is likely to be uneven, Alternative B is often more practical because it allows the valuation to follow reality on site.
That may be why JCT treats Alternative B as the default if no alternative is selected.
Final thought
From a QS point of view, the choice between Alternative A vs Alternative B is really a choice between certainty of structure and flexibility of valuation.
If the payment mechanism is not properly understood at the outset, disputes can arise quickly. So it is always worth checking the Contract Particulars carefully before the first valuation is prepared.
