Payment in JCT Design and Build

The method of payment in the JCT Design and Build Contract is by way of a lump sum payment, which is referred to as the contract sum. The contract sum is the amount specified in article 2 (exclusive of VAT).

The contract sum is not to be adjusted or altered except in accordance with the terms of the contract (clause 4.1). Therefore, while the contract sum may never be changed, it may be adjusted.

Adjustments

Adjustments to the contract sum can only be made in accordance with clause 4.2. Such adjustments can be made to reflect an amount agreed for a change (under clause 5.2), a variation in the premium for insurance Option A or for any deductions or additions specified in clauses 4.2.2 or 4.2.3 respectively.

Interim payments

Interim payments are to be made in accordance with 1 of 2 methods of gross valuation.

The gross valuation is not equivalent to the contract sum as it instead quantifies the cumulative value of the work up to a particular stage (Alternative A at clause 4.13) or period (Alternative B at clause 4.14) less the following:

• retention;
• advance payments due for reimbursement; and/or
• the total amount of interim payments previously paid (clause 4.7).

The method of gross valuation is to be selected in the contract particulars. If no method is chosen the gross valuation and therefore the interim payments shall be made at periods not exceeding 1 month.

The 2016 update revises interim valuation dates, which will operate at main contract, subcontract and sub-subcontract levels with interim payment cycle post completion moving from a bi-monthly cycle to a monthly cycle.