THE contractor’s QS’s knocking your dayworks back! In other words, despite your best efforts the contractor’s QS doesn’t want to pay you for the time and effort you have put in to help the contractor overcome the problem about which he turned to you for help.
A common source of disagreement
Daywork can be a great source of disagreement and even argument! Contractors generally dislike dayworks, and even some specialist contractors are not keen. But, dealt with correctly they should form a very important part of your strategy for getting paid when changes occur.
Typically, the contractor always wants things done in a hurry. Especially if some unexpected problem has arisen which he wants you to overcome by way of extra work. The site team will tell you to get on with it and agree that you record the work on a daywork basis.
The problems then arise when it comes to payment and getting it past the QS.
What are dayworks?
Most standard form contracts provide for the valuing of variation work which cannot be properly measured and valued at contract rates, by recording the work on daywork sheets and using daywork rates. These daywork rates should be agreed in the contract.
Where no such rates are stipulated, it is common to use the actual prime cost of your materials, transport, plant/equipment, tools, scaffolding and labour for the variation work, plus a percentage to cover supervision, overheads and profit.
The general principle is that where work is to be carried out on a daywork basis, you must maintain daywork sheet/s duly completed and countersigned by the contractor or its authorised representative, as the case may be, to verify the resources employed on the variation work before any payment on this basis can be considered.
Completing daywork sheets
Whether you use a daywork sheet, allocation sheet or record of resource sheet, you’ll inevitably present a document to the contractor that describes what work you have done, the hours that your operatives and plant have spent on the work, and what materials have been used, as well as any other costs that you have incurred in completing the work.
You must then present it to the contractor for signature as soon as possible, and the contractor should then sign it. Contractors have a habit of stating ‘for record purposes only’ or ‘FRPO’ when signing, but in reality, this has little or no effect on your rights. Because that’s exactly what it is, a contemporaneous record of what has been done.
The contractor is merely signing that the work was carried out, the resources as described were utilised and the hours claimed are correct. Nothing more and nothing less.
He is not agreeing to pay you for the work on the daywork sheet, unless this has expressly been agreed beforehand, as it may be that the work carried out is already covered in the Contract or that contract rates may apply. So what effect does the signature have?
The value of a signature
When the contractor signs the daywork sheet, he is agreeing that those resources were used on that operation. So if he won’t sign it the first thing to do is ask him why? After all, he asked you to undertake the work on daywork and it is merely a record of the works carried out and resources used.
The second thing to do if he’ll not sign your dayworks is to take advice, and we’re here to help, but more of that later.
Most contractors incorporate into subcontracts a ‘Daywork Procedure’ which describes the procedure that should be taken when daywork arises, typically it involves some dialogue with the contractor’s representative beforehand and his approval or signature afterwards.
So, check the procedure and refer him to it if it supports your argument. If you haven’t complied with the procedure, or there isn’t one, you might want to refer him to the following:
During the foot-and-mouth crisis in the UK in 2001, a firm called JDM Accord was appointed by the secretary of state to slaughter animals, bury and dispose of them. The terms were specifically payment on a time recorded basis.
Daywork sheets were submitted contemporaneously, ignored and left unsigned by the secretary of state. When the time for payment arrived, payment was refused owing to unsigned timesheets leading to legal action in JDM Accord v The Secretary of State for the Environment, Food and Rural Affairs (2004).
The court held that payment of the dayworks were due in full. Having failed to sign or deal with the daywork sheets contemporaneously received from the contractor, the onus of proof shifted to the Secretary of State to disprove them when it came to payment, which they could not do.
Can the QS reduce the hours?
The QS may argue it isn’t a variation, or it should be valued at contract rates, or it should be valued at pro-rata rates, or even it should be valued at new rates using the sheets to establish your costs, or any other excuse to avoid paying dayworks in principle.
He cannot however (unless fraud is proven) once it has been agreed to be paid on a dayworks basis, alter or amend the hours duly authorised and signed off by the contractor’s representative.
It’s highly unlikely that any ‘Daywork Procedures’ which gives the QS the right to hack at the hours, once duly authorised would be sustainable.
So, my advice is simple, if you’re asked to do daywork:
- get a written instruction
- check the ‘Daywork Procedure’ in the Contract
- make sure you understand and comply with the procedure
- if there is no procedure try and agree one before you start the work
Then if the QS gives you any trouble give us a call.
As always if you want to have a free no obligation discussion about improving any aspect of your business,
Barry is MD and co-founder of StreetwiseSubbie.com which provides business solutions for Specialist Contractors throughout the UK