Building and Construction Industry Security of Payment Act 2004 · 2020 Revised Edition · Part 2 · Rights to Progress Payments
7. Valuation of construction work, goods and services
Feedback & supportConstruction work carried out, or goods or services supplied, under a contract are to be valued —
construction work
“construction work” means —(a)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures (whether permanent or not) that form, or are to form, part of the land;(b)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works that form, or are to form, part of the land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for the purpose of land drainage, coast protection or defence;(c)the installation in any building, structure or works of fittings that form, or are to form, part of the land, including systems of heating, lighting, air conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, and security or communications systems;(d)any operation which forms an integral part of, is preparatory to, or is for rendering complete, works of the kind mentioned in paragraph (a), (b) or (c), including —(i)land reclamation;(ii)site clearance, earth moving, excavation, tunnelling and boring;(iii)the laying of foundations;(iv)the erection, maintenance or dismantling of scaffolding;(v)the prefabrication of components to form part of any building, structure or works, whether carried out at or on the construction site or elsewhere; and(vi)site restoration, landscaping and the provision of roadways and other access works;(e)the external or internal cleaning of buildings, structures or works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension; or(f)the painting or decorating of the external or internal surfaces of any building, structure or works;
in accordance with the terms of the contract; or
if the contract does not contain such provision, having regard to the matters specified in subsection (2).
For the purpose of subsection (1)(b), construction work carried out, or goods or services supplied, under a contract are to be valued —
goods
“goods” means —(a)materials or components to form part of any building, structure or works arising from construction work; or(b)plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;
having regard to —
the contract price for the construction work, goods or services;
any other rate or price specified in the contract; and
any variation agreed to by the parties to the contract by which the contract price, or any other rate or price specified in the contract, is to be adjusted by a specific amount,or, in the absence of the matters mentioned in sub‑paragraphs (i), (ii) and (iii), then having regard to the rates or prices prevailing in the building and construction industry at the time the construction work was carried out, or the goods or services were supplied;
if any part of the construction work, goods or services is defective — having regard to the estimated cost of rectifying the defect; and
in the case of materials or components that are to form part of any building, structure or works arising from the construction work — having regard to the basis that the only materials or components to be included in the valuation are those that have become or, on payment, will become the property of the party for whom the construction work is being carried out.