Checking a subcontractor's payment application before approving it
The electrical subcontractor's claim for a four-storey rehabilitation centre arrives on the 25th, a day before your own billing to the owner is due. Level 3 rough-in shows 60 per cent complete, up from 20 last month.
Before approving a trade's claim, check its lines and arithmetic against the schedule of values, its percentages against the work in place at the cut-off, any stored material against the subcontract, and the required documents. Approve what you can support, and tell the trade in writing what you cut and why. A claim is the trade's own estimate; paid unchecked, it can fund work not yet done, money that is hard to recover if the trade fails. Your own claim to the owner is a progress billing.
The monthly check
- Check the package: the agreed form and date, lines matching the schedule of values, approved changes on lines of their own, and every document the subcontract makes a condition of payment, such as a declaration that last month's payment reached the trade's workers and suppliers.
- Check the arithmetic: previous totals equal last month's approval, not last month's claim; no pending changes; no line over its value; holdback retained as your contract and the law require.
- Walk the work at the cut-off with the claim, ideally with the trade's foreman, measuring each line by the rule agreed at start-up — rooms, metres, devices — and photographing each area.
- Keep stored material on its own line, paid only where the subcontract allows it, for material marked for this job, protected and invoiced, and, if it is off site, with the proof of ownership and insurance the subcontract asks for.
- Approve what the walk supports, and carry that figure into your own billing. The same day, tell the trade what you cut on each line, why, and what will release it.
Common mistakes
- Approving at the desk because the total looks reasonable.
- Checking this month's percentages but not the previous totals.
- Cutting a line without telling the trade, who finds out when the payment is short.
Checklist
Before you approve the claim
- Previous totals match last month's approval
- Every line measured on site at the cut-off
- Stored material allowed, marked and invoiced
- Required documents attached
- Each cut explained in writing the same day
Check your understanding
The foreman says level 3 is 60 per cent done because the wire for every room is on the floor. How do you treat the wire?
