Skip to content
Quantsurv
Get in touch

Keep the cost records that would price the work without a contract

If the paper runs out, your work is valued from what you built and what it cost, so keep daily records of both. Allocate labour, plant and materials to work areas, so you can prove the cost of work beyond the letter instead of estimating it.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

With no agreed rates, the value of the work is usually argued from what it actually cost and what similar work is worth. Payroll and invoices show that money was spent, not what it was spent on. Without allocation to areas and dates, the cost of the work beyond the cap is just a share of the total. A share can be argued down. Daily allocation sheets, with delivery tickets filed against the area they served, give the valuation something solid to stand on.

How to do it

  1. Name the work areas once, from the drawings, and use the same names on every record.
  2. Allocate each day's labour and plant hours to the areas worked, on the day.
  3. File delivery tickets and material invoices against the area they served.
  4. Mark the date you passed the cap or the letter expired, so you can separate the work after it.

Example

Illustrative example. The scenario and figures are invented.

The facts

A mechanical subcontractor passes a letter of intent's £80,000 cap in month 3. It keeps working for 4 more months with no subcontract. Its site team allocates labour daily to the plant room, the risers and the floors, and files delivery tickets by area.

What happens

  1. When the main contractor disputes the account, the subcontractor uses the allocation sheets to separate the work after the cap by date and area.
  2. Labour for that period costs £96,000 and materials £71,000, each traced to an area.
  3. It adds an allowance for overheads and profit, then checks the result against the quote's rates for the same work, which give £178,000.

The outcome

The work beyond the cap is valued at £175,000, with every figure traced to a record, and settles at £168,000. Had it been claimed as a share of the job's total payroll, nothing would have shown which hours went into which work.

To have this set up for you, see our Letter of Intent Loss Prevention service.