CHOP | Chapter 2.3.10 | pp. 7

In typical stipulated-sum construction contracts, the architect is responsible for preparing Certificates for Payment indicating when and how much a client must pay the contractor. Certificates for Payment are based on: 

• the schedule of values agreed to and prepared at the start of construction;
  
• the architect’s determination of the percentage of work completed, based on a field review;
  
• the applicable holdbacks required in the provincial or territorial lien legislation.

Schedule of Values

Usually the contractor submits a schedule of values at the start of the project. The schedule of values is typically sub-divided by divisions, major sub-trades or quantifiable elements related to the construction. The work performed by the general contractor’s own forces — as well as the costs for mobilization, supervision, overhead, and profit —are usually indicated. The value of sub-trade contracts and sub-trade breakdowns assists in determining the appropriate Certificates for payment and the progressive release of holdback monies for lien purposes. The architect should review the schedule of values for completeness and for an accurate and realistic distribution of cost. It can be compared with the most recent construction cost estimate to identify significant discrepancies.

Percentage of Work Complete

Payments to a general contractor under a construction contract are usually made on a monthly basis in response to the contractor’s submission of a “progress claim.” The architect should conduct a field review to determine if the percentage of work completed corresponds with the contractor’s progress claim. Any discrepancies should be discussed with the contractor in order to provide an opportunity to make changes to the progress claim or to identify work which the architect may have overlooked. Assistance in determining the percentage completed of certain structural, mechanical, and electrical components will require a field review and advice from the engineering consultants. Once the architect has determined a representative percentage, a Certificate for Payment can be prepared.

Statutory Holdbacks

The architect prepares a Certificate for Payment based on the percentage of work complete and the contractor ’s progress claim. Change Orders must be accounted for in the Certificate for Payment as well as the appropriate holdback required by the provincial or territorial lien legislation.

See Also: 3.5 Completion MORE >>

 

You (the architect) can issue a certificate of payment to the owner, but not to any other third party [See Practice Tip PT. 17].

Design-Build

In a design-build project, payment certification is usually done by the Design-Builder. It may be performed by the consultant to satisfy the Owner’s bank. If payment certification is done by the consultant then letters are required from the engineers responsible for structural, mechanical, electrical, etc. M & E and often structural engineers usually work for M & E and steel contractors and may balk at certifying themselves.