Progress Claims in Construction

July 1, 2024

Progress Claims in Construction

What Are Progress Claims in Construction?

A progress claim, also known as a progress payment, is a document submitted by a builder to their client, requesting payment for work completed to date based on an agreed-upon payment schedule. These claims are regulated by the construction contract between the involved parties and may be made as one-off payments, at regular intervals (monthly or quarterly), or after specific project stages are completed.

Why Are Progress Claims Important?

Progress claims serve several crucial functions in the construction industry:

  • Ensuring steady cash flow for contractors and subcontractors.
  • Facilitating progress tracking throughout the entire project.
  • Aiding in dispute resolution.
  • Managing risks associated with delayed payments.
  • Assisting contractors in receiving fair and timely payments.

These benefits contribute to greater transparency, effective time and resource management, and promote fairness in construction projects.

Difference Between Progress Claims and Invoices

Both progress claims and invoices are used to request payments in the construction industry:

  • Progress Claims: Periodic requests for payment for work completed, based on a percentage of the total work.
  • Invoices: Requests for payment for services delivered, including total service costs.

When a project is divided into stages, the client may approve the progress claim and send payment to the contractor without needing a separate invoice.

What is a Payment Schedule?

A payment schedule is a document that outlines the terms and conditions related to progress claims, typically including:

  • Frequency of Payment: Monthly, quarterly, etc.
  • Payment Amounts: Specified amounts for each installment.
  • Basis for Payment: Criteria such as project milestones or percentage of work completed.
  • Due Dates: Specific dates when each payment is due.

This schedule is generally included in the construction contract.

Progress Claim Template

To comply with regulatory standards, a progress claim template might include:

  • Project Name and Number
  • Contractor Name
  • Date
  • Payment Claim Number
  • Summary of Work Completed
  • Total Claim Amount
  • Previous Payments
  • Total Amount Due
  • Total Amount with GST
  • Contractor’s Signature
  • Notes

Documentation for Progress Claims

The specific documentation can vary, but commonly includes:

  • Statement of Work Completed: Detailed report of completed tasks or milestones.
  • Progress Report: Overview of project progress, ongoing activities, and upcoming phases.
  • Schedule of Values: Breakdown of total project costs into individual work items.
  • Invoices from Subcontractors and Suppliers: Detailed invoices for services provided.
  • Photographs as Proof of Work: Visual evidence of progress.
  • Quality Control Records: Documentation confirming work meets quality standards.
  • Certification of Accuracy: Signed verification of claim accuracy.
  • Payment Schedule: Outlines specific payment milestones.
  • Legal Documents: Licenses, permits, and other legal compliance documents.

How to Submit a Valid Progress Claim

Follow these steps to prepare and submit a valid progress claim:

  1. Review the Construction Contract: Understand the payment types, claim details, required documentation, and completion criteria.
  2. Calculate the Claim Amount: Based on the specified percentage of completed work.
  3. Gather Necessary Documentation: Collect all required supporting documents.
  4. Prepare the Progress Claim Form: Include all necessary details such as claim date, work completed, and claim value.
  5. Submit the Progress Claim: Follow the submission procedures defined in the construction contract.

Contact Us

For assistance with your progress claims, reach out to us at Cost Logic. Our experienced professionals are ready to help you ensure smooth and accurate progress claims for your construction projects.