Where a substantial part of a contract is cost based then a cost based progress claim is utilised.
In many cases the Head Contractor has a Fixed Price or Percentage of Adjusted Contract Value as a builders margin, so a pair of projects are created with builder’s fixed prices works invoice to the construction management job for the value of work done, and the single claim on the client. As the client may have an active role in approving and paying subcontracts, this provides a proven construction management environment .
Now, the claim is against the final forecast cost of the project using the project allocation framework.
Note: Variations should still be processed on a construction management job to support the value for money proposition although the cost has increased.
