QS Guide · Chapter 04

Contract Administration

Progress valuations, variation pricing, EOT cost claims, and cost reporting. The day-to-day commercial work of the QS during construction. Aligned with the Queensland BIF Act framework.

QS Guide Chapter 04 of 5
00Overview 01Introduction 02Methods of Measurement 03Cost Planning 04Contract Administration 05Final Account
Post-Award

Contract Administration

Once a contract is awarded, the QS shifts from cost planner to commercial administrator. The disciplines below are the QS's day-to-day work during construction.

Progress Valuations

The QS visits site monthly, measures work in place against the contract BOQ, and recommends the Payment Certificate value. Includes assessment of stored materials, retention, set-off for defective work, and any disputed items. In Queensland, valuations operate under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) which sets statutory timing and notice requirements for payment claims and payment schedules.

Variation Assessment

When the principal directs a change to scope, the QS assesses the variation cost using contract BOQ rates where applicable, derived rates for similar items, or first-principles 'star rates' for entirely new items. The variation is documented with full back-up calculations and recorded in a variation register. Independent assessment by an experienced QS is the single biggest protection against final account disputes.

Extension of Time (EOT) cost claims

When the contractor is granted an EOT, the cost component (prolongation costs, additional preliminaries, head-office overhead) is assessed using established formulae such as the Hudson, Eichleay, and Emden methods, and the actual contract preliminaries breakdown. The QS produces a defensible position that can survive subsequent expert review or adjudication.

Cost reporting & cash flow forecasting

Monthly cost reports compare actuals to budget, forecast cost-to-complete (FCTC), and project cash flow. Reports are structured around AIQS elements and the project WBS so that the same numbers tie to the cost plan, the BOQ, and management dashboards. Ready for board, lender, and Treasury consumption.

Risk & contingency drawdown

Project contingency is drawn down as risks materialise. The QS maintains the contingency register, recommends drawdowns, and reports remaining contingency at each cost report. This discipline prevents the common failure mode of contingency being silently absorbed into baseline scope.

Common Questions

Frequently Asked Questions

How do progress valuations work under the BIF Act in Queensland?

The Queensland Building Industry Fairness (Security of Payment) Act 2017 sets statutory timing for progress claims (monthly, by reference date) and payment schedules (10 business days to respond). The QS-prepared valuation forms the basis of the principal's payment schedule. Failure to issue a valid payment schedule on time exposes the principal to the full claim amount being payable by default.

How are variations priced when there is no comparable BOQ rate?

When a variation includes work not covered by the contract BOQ, the QS builds a 'star rate' from first principles — labour hours and rates, plant time and rates, materials, subcontractor quotes if relevant, plus contractor margin and overhead at contract levels. The build-up is documented and presented for principal's approval before the work proceeds.

How are EOT cost claims assessed?

EOT cost claims typically include prolongation costs (additional time-related preliminaries) and head-office overhead/profit. Methods include the Hudson, Eichleay, and Emden formulae, and direct cost build-up against the contractor's actual preliminaries breakdown. Cenex uses the most appropriate method for the contract form and the available data, and documents the methodology fully.

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