Contract Administration Guideline
Saiyu only.
Progress Claims & Variations (Head Contract, NSW)
Applies to: Head contracts under AS 4000-1997 and AS 4902-2000, NSW Out of scope: Subcontract administration (Saiyu as Principal to subbies under AS 4901/4903) and HBA owner-occupier projects — both treated in separate guidelines.
§1 — Purpose, scope, audience
This guideline exists because the same confusion keeps surfacing across Saiyu projects: a variation is "raised" but its claim value is $0; a variation is "approved" but the work is not done; a variation is "on the register" but disputed by the Superintendent. Colleagues collapse what are actually five separate states into one, and the result is progress claims that are either under-claimed (cash flow lost) or over-claimed (Superintendent under-certifies and Saiyu has to chase via SOPA NSW adjudication).
Audience. Saiyu Project Managers, Contract Administrators, and Site Supervisors handling head-contract administration in NSW.
Scope. Progress claim cycle and variation lifecycle, head-contractor side (Saiyu → Principal). Both the contractual machinery (AS 4000 cl 36/37, AS 4902 cl 36/37) and the statutory overlay (Building and Construction Industry Security of Payment Act 1999 (NSW), "SOPA NSW") are treated together because every head-contractor progress claim has a dual identity.
Out of scope. Subcontract administration; HBA owner-occupier residential progress payments; Class 1 dwellings under HIA forms; final accounts; defects liability administration; insurance and security release. These deserve their own guidelines and shoehorning them in dilutes the core message.
How to read this. §3 and §7 are the spine — the 5-state model and the Variation Register. §5 is the day-to-day reference. §8 is the worked example to photocopy. §9 contains the three diagrams to pin above your desk.
§2 — Glossary, clause map and 中文对照
Operative legal meanings live in English. The Chinese column is a learning aid only — it does not carry contractual force. If a clause is cited, the English term and clause reference is authoritative.
| English term | Clause / Section | 中文对照 |
|---|---|---|
| Superintendent | AS 4000 cl 20 / AS 4902 cl 20 | 工程师 / 监理 (建议保留英文 Superintendent) |
| Direction | AS 4000 cl 20 (general), cl 36.1 (variation) | 书面指令 / 指示 |
| Variation | AS 4000 cl 36 / AS 4902 cl 36 | 工程变更 |
| WUC (Work Under the Contract) | cl 1 (definitions) | 合同范围内的工程 |
| Contract Sum | Item 14 Annexure Part A | 合同总价 |
| Annexure Part A | (front of contract) | 合同附录 A (项目特定参数) |
| Principal | cl 1 (definitions) | 业主 / 发包方 |
| Contractor | cl 1 (definitions) | 承包方 / 承建商 |
| Lump Sum | (commercial term) | 总价合同 |
| Schedule of Rates | Annexure Part C (AS 4000) | 单价表 |
| Provisional Sum | cl 3 | 暂列金额 |
| PPR (Principal's Project Requirements) | AS 4902 only (cl 2.2) | 业主项目要求 |
| Design Development | AS 4902 (concept; not cl-defined) | 设计深化 / 设计完善 |
| Site Instruction (SI) | (industry term, not contract-defined) | 现场指令 |
| Reference Date | Item 28 Annexure Part A | 进度款基准日 |
| Progress Claim (PC) | AS 4000 cl 37.1 / AS 4902 cl 37.1 | 进度款申请 |
| Payment Claim | SOPA NSW s13 | 法定付款申请 |
| Payment Schedule | SOPA NSW s14 | 付款方案 |
| Supporting Statement | SOPA NSW s13(7) | 主承包商声明 (分包商付款情况) |
| Adjudication | SOPA NSW Part 3 Div 2 | 快速裁决 / 法定裁决 |
| Adjudication Application | SOPA NSW s17 | 裁决申请 |
| Business Day | SOPA NSW s4 | 法定工作日 (排除周末、公众假期及 27–31 Dec) |
| EOT (Extension of Time) | AS 4000 cl 34.5 | 工期延长 |
| Latent Condition | AS 4000 cl 25 / AS 4902 cl 25 | 隐蔽情况 |
| Practical Completion (PC) | AS 4000 cl 34.6 | 实际竣工 |
| Defects Liability Period (DLP) | AS 4000 cl 35 | 缺陷责任期 |
| cl 41 Notice (Notification of Claims) | AS 4000 cl 41 / AS 4902 cl 41 | 索赔通知 |
| Dispute Resolution | AS 4000 cl 42 / AS 4902 cl 42 | 争议解决 |
Note on the two "PC" abbreviations. Progress Claim and Practical Completion share the abbreviation. In this guideline, PC = Progress Claim unless otherwise stated; Practical Completion is written in full.
Note on AS 4000-2024. A draft revision of AS 4000 has been circulated by Standards Australia (in consultation through 2024–2025). It is not yet in force. All references in this guideline are to the current AS 4000-1997 (incorporating Amendments 1, 2 and 3) and AS 4902-2000 (incorporating Amendment 1, March 2005). Refresh when AS 4000-2024 is published.
§3 — The 5-state model
This is the spine of the guideline. A variation is not a single event — it is a journey through five states. Each state has a distinct trigger, a distinct document, and a distinct status entry in the register.
| State | Name | What just happened | Triggering document | Register update |
|---|---|---|---|---|
| 1 | Instructed | The Superintendent has issued a direction that may give rise to a variation | Direction letter / Site Instruction / email | Open new VO row; flag origin (direction, latent, RFI, etc.) |
| 2 | Priced | The Contractor has submitted a quotation (cost + time impact) for the directed work | Variation Quotation (Contractor's letter) | Record quotation amount + EOT claimed |
| 3 | Approved | The Superintendent has valued and accepted the variation under cl 36.4; the priced VO is now contractually recognised and the Contract Sum is adjusted | Priced Variation Order issued by Superintendent | Record approved amount + EOT granted; status = Approved (or Disputed if Superintendent has rejected/under-valued and Contractor disagrees) |
| 4 | Executed | The varied work has been performed on site (0–100%) | Site records, photos, ITPs, supervisor sign-off | Update % executed at each reference date |
| 5 | Claimed & Certified | The value (or % of value) of the executed variation has been included in a Progress Claim and certified by the Superintendent in the Payment Schedule | Progress Claim + Payment Schedule | Update Claimed to date and Certified to date |
Critical point your colleagues miss: The date of each state is different, sometimes by weeks. A VO can be Approved on 24/05/2026 (state 3) and still appear in PC-1 dated 31/05/2026 at a claim value of $0 — because at the reference date, % Executed (state 4) was still 0%. The claim value follows execution, not approval.
Instructed ──► Priced ──► Approved ──► Executed ──► Claimed & Certified
(1) (2) (3) (4) (5)
│ │
▼ ▼
Rejected Disputed ──► cl 41 / SOPA s17 adjudication
A clean variation walks 1→2→3→4→5 in sequence. A disputed variation forks at state 3 (or at certification in state 5) and may run on the dispute track (cl 41 / SOPA s17) in parallel with the works track.
§4 — What counts as a variation — AS 4000 vs AS 4902 callout
This is the largest divergence between the two contract forms and the most common source of unrecoverable cost on D&C jobs.
Under AS 4000-1997 (Construct Only / Lump Sum)
The Principal supplies the design. The Contractor builds to the issued drawings.
A variation under cl 36 arises when the Superintendent directs a change to WUC — typically a change to the issued drawings, specifications, sequencing, or quality. If the drawings change after the Contract Sum is fixed, a variation has almost certainly arisen.
Trap to avoid: treating drawing clarifications and RFI responses as "free". If the Superintendent's response to an RFI changes WUC (even slightly — e.g. confirms an upgrade in finish, adds a fixing detail not previously shown), it is a variation. Notify under cl 41 within the timeframe; if you proceed without raising it, you risk losing the right to claim under the Contract.
Under AS 4902-2000 (Design & Construct)
The Contractor supplies the design. The Principal supplies the Principal's Project Requirements (PPR) — a functional brief, not detailed drawings.
A variation under cl 36 arises only when the PPR changes — not when the design develops. Design development to satisfy the existing PPR is at the Contractor's cost and risk; that is the bargain the D&C form strikes.
Trap to avoid: PMs raising a VO every time the Contractor's architect issues updated drawings. The architect's updates are design development unless they respond to a PPR change. Raising a VO that the Superintendent rightly rejects burns goodwill, clutters the register, and trains colleagues to disbelieve the variation count.
Mirror trap: failing to recognise a PPR change disguised as a "Superintendent's preference". If the Principal asks for, say, an increase in apartment ceiling height from 2.55 m to 2.70 m and the PPR previously stated 2.55 m, that is a PPR change → variation under cl 36 → claim it. Verbal preference is not enough — get the PPR change in writing.
What stays the same across both forms
| Mechanism | Treatment under both AS 4000 and AS 4902 |
|---|---|
| Pricing methods | cl 36.4 hierarchy: (a) prior agreement, (b) Schedule of Rates if applicable, (c) reasonable rates/prices |
| Notification of claims | cl 41 — written notice within stated timeframe |
| Progress claim mechanics | cl 37.1 (claim) and cl 37.2 (certificate) |
| EOT framework | cl 34.5 |
| Latent conditions | cl 25 (compensable; D&C contracts often modify risk allocation in Annexure Part A — check) |
| Defects liability | cl 35 |
| Dispute resolution | cl 42 |
Reminder. Annexure Part A is project-specific. Reference dates, payment schedule periods, EOT notification windows, and many other timing parameters live in Annexure Part A items, not in the general conditions. Always check the executed Annexure for the project before applying timeframes from this guideline.
§5 — Variation lifecycle: state-by-state checklist
§5.0 — The Superintendent wears two hats
Before walking through the states, settle one thing: the Superintendent acts in two distinct capacities, and which one applies determines whether Saiyu can challenge a decision.
| Mode | When | Duty | What Saiyu can do if Saiyu disagrees |
|---|---|---|---|
| Agent of the Principal | Issuing directions, instructing variations, granting access (cl 20) | Acts for the Principal — partisan permitted | Comply (cl 36.5 — direction to proceed), then claim under cl 36/41 |
| Independent certifier/valuer | Valuing variations (cl 36.4); assessing EOT (cl 34.3–34.5); certifying progress claims (cl 37.2); certifying Practical Completion (cl 34.6) | Must act honestly and impartially — Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd [2002] NSWCA 211 | Issue cl 41 notice of dispute; in parallel, serve the PC as a SOPA Payment Claim to access adjudication (s17) |
Each state below is tagged with the hat the Superintendent is wearing. When colleagues feel "the Superintendent has already decided so we can't push back" — they have usually mistaken agent decisions (which can always be disputed) for certifier decisions (which can be challenged via cl 41 and SOPA, just through a different lever).
State 1 — Instructed
Superintendent's hat: Agent Trigger: Superintendent's direction (in writing — and only in writing under cl 36.1; oral directions must be confirmed in writing per cl 7). Documents in: Direction letter / Site Instruction / Superintendent's email. Documents out: Contractor's acknowledgement; register row opened.
Saiyu actions:
- Open a new VO row in the register. Assign next sequential VO number (project-prefixed: e.g. K7-VO-014).
- Record the direction date, origin (Principal-requested, Superintendent-initiated, latent condition under cl 25, RFI response, etc.), and a one-line description.
- If the direction was oral, write to the Superintendent the same day confirming the direction in writing. Do not commence varied work on the basis of an oral direction alone.
- If the work is urgent and the Superintendent will not confirm in writing, escalate immediately to the Project Manager and consider cl 41 notice while proceeding under protest.
Trap: assuming an RFI response, drawing markup, or shop drawing comment is not a direction. Anything that changes WUC is a direction. The test is the substance, not the document type.
State 2 — Priced
Superintendent's hat: Agent (reviewing); will switch to Certifier when valuing under cl 36.4. Trigger: Contractor's quotation submitted to Superintendent. Documents in: none. Documents out: Variation Quotation letter with breakdown.
Saiyu actions:
- Submit quotation within the timeframe stated in Annexure Part A or in the direction itself (typically 7–14 calendar days).
- Quotation must include: cost breakdown (labour, plant, materials, subcontractor, preliminaries, margin), time impact (EOT claimed under cl 34.5 if applicable), and any contingent or follow-on impact (e.g. effect on adjacent trades).
- If the work is already underway under a direction to proceed (cl 36.5), record actual costs as they accrue and flag this in the quotation.
- Cost basis: under cl 36.4(a) prior agreement prevails; otherwise (b) Schedule of Rates if WUC is similar; otherwise (c) reasonable rates and prices. Saiyu should propose the basis being relied on in the quotation.
Trap: quoting without an EOT claim when one is warranted. The cl 34.5 EOT and the cl 36 variation are separate entitlements arising from the same event. Quote both, and notify the EOT under cl 41 within the Annexure Part A timeframe — typically tight (often 14 days from when the cause first arose) and not extendable for the contractual entitlement (though SOPA may preserve the claim).
State 3 — Approved
Superintendent's hat: Certifier (must act impartially when valuing under cl 36.4). Trigger: Superintendent values the variation and issues the priced VO. Documents in: Priced Variation Order from Superintendent. Documents out: Contractor's acknowledgement; register updated.
Saiyu actions:
- Compare the Superintendent's valuation to the Contractor's quotation. Three outcomes:
- Accept — Superintendent valued at quoted amount (or within tolerance Saiyu is willing to accept). Update register: status = Approved; record approved amount.
- Dispute on quantum — Superintendent valued below quoted amount. Update register: status = Disputed. Issue cl 41 notice of dispute within the Annexure timeframe. Continue to record approved amount as the Contractor's assessed value (i.e. the quoted amount, or some intermediate position Saiyu can defend), because this is the figure Saiyu will claim in the next PC.
- Dispute on entitlement — Superintendent rejects the variation altogether ("not a variation, within WUC scope"). Same as above — status = Disputed; cl 41 notice; assessed value in register reflects the Contractor's position.
- Update the Approved date and Approved $ columns (column 7 in §7 register schema).
- If EOT was granted, update the time column. If granted at less than claimed, flag for cl 41.
Trap 1: treating Superintendent's rejection as the end of the matter. It is not — the Superintendent is a certifier here, not a judge, and the dispute mechanisms exist precisely for this case. Peninsula Balmain [2002] NSWCA 211 establishes that the Superintendent's duty to act impartially when valuing is enforceable against the Principal.
Trap 2: leaving the register row blank for a disputed VO. Disputed VOs stay on the register — they are tracked at the Contractor's assessed value, and the disputed amount becomes adjudicable under SOPA at the next PC cycle.
State 4 — Executed
Superintendent's hat: N/A (factual matter). Trigger: Varied work performed on site. Documents in: ITPs, site diary entries, photos, supervisor sign-off, subcontractor invoices. Documents out: Updated register at each reference date.
Saiyu actions:
- Update the % Executed column at every reference date (typically end of month).
- Basis for % calculation: cost-to-complete is the cleanest method (cost incurred to date / total approved cost). For variations that are lump-sum approved but discretely measurable (e.g. "install 12 additional anchors"), physical measurement is acceptable.
- Photographic and ITP evidence supports the % claimed and is the primary defence if the Superintendent under-certifies.
Trap: front-loading the % executed. Adjudicators (and Superintendents) routinely audit cost-to-complete. Over-claiming early erodes Saiyu's credibility for the rest of the project and invites scrutiny on every subsequent claim.
State 5 — Claimed & Certified
Superintendent's hat: Certifier when issuing the Payment Schedule (cl 37.2; must act impartially). Trigger: PC served on the Principal at the reference date. Documents in: Payment Schedule (cl 37.2 and SOPA s14) from the Superintendent. Documents out: Progress Claim with attached register, Supporting Statement (SOPA s13(7)), and any cl 41 notices for under-certified items.
Saiyu actions:
- The PC line for each variation =
Approved $ × % Executed − Certified to date. (See §7 for the formula and §8 for a worked walk-through.) - The PC must be served as a Payment Claim under the SOPA NSW (s13). Best practice: a single sentence on the cover page reading "This is a Payment Claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW)." Without this identification, Saiyu retains contractual rights but the SOPA timeline (and adjudication access) is not engaged.
- A Supporting Statement under s13(7) must be served with every PC where Saiyu is the head contractor. This is a written declaration that all subcontractors have been paid amounts due and payable. Knowingly false statements are a criminal offence under SOPA — treat this seriously.
- Track the Superintendent's Payment Schedule date carefully. Under s14(4) the Schedule must be served within the earlier of (a) the time stated in the Contract (Annexure Part A) or (b) 10 business days after the Payment Claim is served. Contract may shorten this period but cannot extend it (Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd [2025] NSWCA 161).
- If the Payment Schedule under-certifies any line, the adjudication window opens — see §6.
§6 — The Progress Claim cycle: contractual + statutory dual timeline
Every PC has two simultaneous identities:
| Lens | What the PC is | What governs |
|---|---|---|
| Contractual | A progress claim under AS 4000 cl 37.1 / AS 4902 cl 37.1 | Reference date per Annexure Part A Item 28; Superintendent's certificate due per Annexure Part A Item 30; payment due per Annexure Part A Item 31 |
| Statutory | A Payment Claim under SOPA NSW s13 | Payment Schedule due within earlier of contractual period or 10 BD (s14(4)); adjudication under s17 if under-certified |
The two clocks run in parallel. Where they conflict on timing, the shorter period prevails (because SOPA caps but does not extend contractual periods).
The reference date and what can be claimed
Under SOPA s13, generally one payment claim per calendar month (unless the contract specifies differently — many AS 4000/4902 contracts adopt the end of each month as the reference date). The PC may cover work performed (or "promised to be performed") in the relevant period, including:
- Lump sum component: % complete × Contract Sum
- Approved variations: per the formula in §7
- Provisional sum adjustments (cl 3)
- Schedule of Rates work, measured at the reference date
- EOT-related delay damages or compensation if Annexure Part A Item is in Contractor's favour (cl 34.9)
- Adjustments for unfixed plant and materials (cl 37.3)
- Less: amounts previously certified; retention (if any); other deductions per the Contract
Payment Schedule mechanics (SOPA NSW s14)
The Payment Schedule must:
- identify the Payment Claim to which it relates (s14(2)(a))
- indicate the scheduled amount (s14(2)(b))
- if the scheduled amount is less than the claimed amount, state reasons why and any reason for withholding payment (s14(3))
If the Superintendent rejects a variation line item entirely and the Payment Schedule simply records "$0 — under assessment" without a reason, this may render the Schedule defective for SOPA purposes (s14(3)). A defective Schedule is treated as no Schedule under s14(4).
Three adjudication paths under SOPA s17
The path depends on what the Principal did (or didn't do). Each path has a different window — and missing the window forfeits adjudication rights for that claim.
| If… | Section | Adjudication window | Within… |
|---|---|---|---|
| (a) Payment Schedule served, but scheduled amount < claimed amount | s17(1)(a)(i) | 10 BD from receipt of the Payment Schedule | (no notice required) |
| (b) Payment Schedule served, scheduled amount accepted, but Principal fails to pay by due date | s17(1)(a)(ii) | 20 BD from the due date for payment | (no notice required) |
| (c) No Payment Schedule served, no payment made | s17(1)(b) + s17(2) | Serve s17(2) notice within 20 BD of due date; give Principal 5 BD to provide a Schedule; if still nothing, lodge within 10 BD of the end of that 5-day period | s17(2) notice mandatory |
For the typical Saiyu case — variation under-certified by Superintendent in a properly served Payment Schedule — path (a) applies: 10 business days from receiving the Payment Schedule. This is a tight window; the adjudication application takes 2–3 days of work to prepare even with a well-maintained register. Diary it the moment the Payment Schedule arrives.
Business day calculation (SOPA s4)
"Business day" under SOPA excludes Saturdays, Sundays, NSW public holidays, and 27, 28, 29, 30, and 31 December. The Christmas exclusion matters: claims served in mid-December and schedules due in early January are routinely miscalculated.
Supporting Statement (s13(7))
Saiyu, as head contractor on the head contract, must serve a Supporting Statement with each Payment Claim. The form is prescribed (see the Regulation under SOPA). It is a declaration that all subcontractors have been paid amounts owing in respect of the construction work to which the Payment Claim relates. False statements are a criminal offence; the declaration is signed by an authorised officer of Saiyu.
SOPA licensing precondition (s8(2))
Saiyu must hold the appropriate licence (NSW Builder's Licence for residential, etc.) and required insurance to use SOPA. An unlicensed or uninsured contractor cannot use SOPA to recover. Saiyu's licensing is current — but Saiyu must verify subcontractors' licensing before they invoke SOPA against Saiyu (a defensive point on the inbound side).
§7 — The Variation Register: schema and the canonical formula
One row per variation. Live document, updated at every reference date (and whenever a state transition occurs).
Schema (14 columns)
| # | Column | Type | Notes |
|---|---|---|---|
| 1 | VO No. | text | Project-prefixed sequential: e.g. K7-VO-001 |
| 2 | Title | text | Short description |
| 3 | Origin | enum | Superintendent direction / Contractor proposal / Latent condition (cl 25) / RFI response / PPR change (AS 4902) / PS adjustment (cl 3) |
| 4 | State 1: Instructed date | date | DD/MM/YYYY |
| 5 | Instruction ref | text | Letter / email / SI number |
| 6 | State 2: Priced date + $ | date + AUD ex GST | Contractor's quotation date and amount |
| 7 | State 3: Approved date + $ | date + AUD ex GST | Superintendent's priced VO date and approved amount. If disputed, use Contractor's assessed value here and flag in col 8. |
| 8 | Approval status | enum | Under Review / Approved / Disputed / Rejected |
| 9 | EOT (days) | integer | Days granted (claim figure in parentheses if disputed) |
| 10 | State 4: % Executed (at reference date) | % | Updated each reference date — 0%, 25%, 60%, 100% |
| 11 | State 5: Claimed to date | AUD ex GST | Cumulative across all PCs |
| 12 | State 5: Certified to date | AUD ex GST | Cumulative across all Payment Schedules |
| 13 | This PC claim value | AUD ex GST | Formula: (col 7 × col 10) − col 12 |
| 14 | Notes / status flag | text | Disputes, RFIs outstanding, pending docs, cl 41 notices issued |
Derived footer totals
- Σ col 7 = Cumulative Contract Sum adjustment (approved variations only)
- Σ col 13 = Variations component of this Progress Claim
- Σ col 11 − Σ col 12 = Outstanding variation claim exposure (the SOPA-adjudicable amount, by line)
The canonical formula
This PC claim value (col 13) = (Approved $ × % Executed) − Certified to date
= (col 7 × col 10) − col 12
Read this aloud to anyone confused: "What I should claim now equals the value of work approved and done, less what's already been certified." The formula handles every case correctly:
- Approved but not started: col 10 = 0% → col 13 = $0 (correct — claim nothing this cycle)
- Approved and 60% done, never claimed before: col 13 = $X × 60% − 0 = $0.6X (correct)
- Approved, 100% done, partially certified previously: col 13 = $X × 100% − previously certified (correct — claim the balance)
- Disputed and partially done: col 7 = Contractor's assessed value, col 13 follows; difference between col 11 and col 12 becomes the adjudicable position
Register hygiene rules
- Never delete a row. Rejected and disputed VOs stay on the register — they are the audit trail. If a Rejected VO is later upheld at adjudication, the row reactivates with state and value updated.
- Stamp the register with the reference date when issuing a PC. Saiyu attaches a frozen copy of the register at each PC reference date to the PC document. Without this, reconstructing what was claimed and on what basis becomes painful in a dispute.
- Reconcile to the running Contract Sum at each PC. Original Contract Sum + Σ col 7 = current adjusted Contract Sum. Mismatch = error in the register; find and fix before submitting the PC.
§8 — Worked example: VO-007 (clean path) and VO-012 (disputed path)
Project context
Generic Saiyu project: 6-storey Class 2 residential, Kiama. Lump sum head contract under AS 4000-1997. Contract Sum $14,800,000 ex GST. Reference date = last day of each month (per Annexure Part A Item 28). Payment Schedule period = 10 business days (per Annexure Part A Item 30). Project month 8 of 18.
VO-007 "Additional ground anchors at southern retaining wall" — clean path
Latent condition under cl 25 (geotech encountered weaker rock than baseline).
| State | Date | Event | Register update |
|---|---|---|---|
| 1 Instructed | 10/05/2026 | Superintendent's direction issued following geotech review | Row K7-VO-007 opened; origin = latent (cl 25) |
| 2 Priced | 17/05/2026 | Contractor submits quotation: $52,400 ex GST + 8 days EOT | Col 6 updated |
| 3 Approved | 24/05/2026 | Superintendent's priced VO at $48,500 ex GST (rate-rationalised under cl 36.4(b)) + 5 days EOT granted | Col 7 = $48,500; col 8 = Approved; col 9 = 5 (claim 8) |
| 4 Executed | (rolling) | Work commences 28/05/2026; progresses across three reference dates | Col 10 updated monthly |
VO-007 across three Progress Claims
| Reference date | Col 10 (% Exec) | Col 11 (Claimed to date, prior) | Col 12 (Certified to date, prior) | Col 13 = (col 7 × col 10) − col 12 | |
|---|---|---|---|---|---|
| PC-1 | 31/05/2026 | 0% | $0 | $0 | $48,500 × 0% − $0 = $0 |
| PC-2 | 30/06/2026 | 60% | $0 | $0 | $48,500 × 60% − $0 = $29,100 |
| PC-3 | 31/07/2026 | 100% | $29,100 | $29,100 (assumes certified in full) | $48,500 × 100% − $29,100 = $19,400 |
Reconciliation: $0 + $29,100 + $19,400 = $48,500 ✓ (matches approved amount, col 7).
This resolves the confusion in the brief. VO-007 paper-dated 24/05/2026 (Approved) appears on PC-1 dated 31/05/2026 at value $0 — the 7-day gap is real and correct, because % Executed was still 0%. The variation is on the register from state 3 onward; the claim value follows execution. By PC-2 (30/06/2026) it appears at $29,100; by PC-3 (31/07/2026) it appears at $19,400 (the balance).
VO-012 "Façade brick infill at GF lobby" — disputed path
| State | Date | Event | Register update |
|---|---|---|---|
| 1 Instructed | 05/06/2026 | Site Instruction from Superintendent (says "complete the brick infill, refer drg A-201 Rev C") | Row opened |
| 2 Priced | 12/06/2026 | Contractor's quotation: $36,800 ex GST | Col 6 |
| 3 Rejected | 22/06/2026 | Superintendent rejects: "within WUC, refer drg A-201 Rev B issued for construction — not a variation" | Col 8 = Disputed; col 7 = $36,800 (Contractor's assessed value); cl 41 dispute notice served 24/06/2026 |
| (proceed under cl 36.5) | 25/06/2026 onward | Saiyu writes to Superintendent confirming work performed under protest; rights preserved | Notes column updated |
| 4 Executed | 30/06/2026 | 40% complete at reference date | Col 10 = 40% |
PC-2 (30/06/2026): how VO-012 is treated
- Saiyu claims col 13: $36,800 × 40% − $0 = $14,720 under SOPA s13.
- Cover page identifies the PC as a Payment Claim under SOPA NSW.
- Supporting Statement attached (s13(7)).
- Notes column flags: Disputed under cl 41 notice dated 24/06/2026; proceeding under cl 36.5 direction to proceed.
Payment Schedule from the Superintendent
Assume the Payment Schedule is served on 14/07/2026 (within the 10-BD window from PC-2 dated 30/06/2026, accounting for the EOFY weekend). The Payment Schedule:
- Certifies the lump sum component as claimed.
- Certifies VO-007 at $29,100 as claimed.
- Schedules VO-012 at $0, with reason: "not a variation; within original WUC scope; refer cl 36.5 direction is a clarification not a variation".
The 10-BD adjudication window opens
Saiyu has 10 business days from 14/07/2026 to lodge an adjudication application under SOPA s17(1)(a)(i). Counting business days (assuming no NSW public holiday): 15, 16, 17, 18, 21, 22, 23, 24, 25, 28 July 2026 is the 10th business day. Lodge by close of business 28/07/2026.
If Saiyu misses 28/07/2026, the right to adjudicate the VO-012 claim for this PC cycle is gone. The cl 41 dispute remains live (and could go to final dispute resolution under cl 42, including arbitration), but the fast cash-flow remedy under SOPA is forfeited for that month.
Teaching points from VO-012
- Disputed VOs stay on the register at the Contractor's assessed value. Col 7 is $36,800 (what Saiyu believes the variation is worth), not $0 (what the Superintendent has rejected).
- Saiyu still claims its assessed value × % executed in the PC. $14,720 in PC-2, even though the Superintendent will schedule $0.
- The SOPA s17 10-BD window is the only fast lever to convert a Superintendent's rejection into actual money. Twenty business days is for a different adjudication trigger (failure to pay scheduled amount); a different 20-BD window applies to s17(2) notice when no Schedule is served at all. Know which window applies to which situation — see §6 table.
- Document the cl 36.5 direction to proceed. Working under protest preserves Saiyu's contractual rights. Working without protest can be argued by the Principal as acceptance that the work was within WUC.
§9 — Diagrams, common traps, and one-page checklist
Diagram 1 — Variation State Machine
Diagram 2 — Dual Timeline (Contractual + Statutory)
Diagram 3 — Register → Progress Claim derivation
Common traps (FAQ)
"The VO was approved last week — why is the PC value $0?" Because % Executed at the reference date is 0%. Approval (state 3) doesn't put money in the PC; execution (state 4) does. The variation is on the register; the claim value follows execution.
"The Superintendent rejected the variation. Should I delete the row?" No. Disputed and rejected VOs stay on the register. They are tracked at the Contractor's assessed value and are the audit trail for cl 41 / SOPA s17 dispute resolution. Deletion = destruction of evidence.
"The Superintendent gave an oral instruction. Is that a direction?" Under AS 4000 cl 7 and cl 36.1, written form is required. Confirm the oral direction in writing the same day. Do not commence varied work on an oral direction alone — if there is no written confirmation, there is no variation and no compensable claim.
"It's the same thing every month — can I just copy last month's PC and bump the percentages?" No. The Variation Register must be frozen and attached at each reference date. Copying without refreshing the register risks claiming amounts already certified (over-claim) or missing newly executed variations (under-claim). And SOPA does not tolerate "I forgot" — missed items can sometimes be claimed in the next month, but rights to dispute past Schedules expire.
"The Principal called and said don't worry about SOPA, we're paying." Identify the PC as a Payment Claim under SOPA every time — without exception. The verbal assurance is worth nothing if the Principal later fails to pay. SOPA identification is one sentence and costs nothing; not including it can cost Saiyu its fast remedy.
"The Payment Schedule arrived but it just says 'under assessment' for VO-012." This may render the Schedule defective for SOPA purposes — s14(3) requires reasons. A defective Schedule is treated as no Schedule under s14(4), shifting Saiyu into the path (c) adjudication route (s17(2) notice within 20 BD of due date). Seek legal advice before relying on this — the case law is unforgiving on procedural detail.
"I missed the 10-BD adjudication window on last month's PC." For that PC cycle, SOPA's fast remedy is forfeited. The underlying contractual claim survives — it can still be pursued via cl 41 / cl 42 dispute resolution, or potentially re-included in the next PC if the underlying entitlement endures (some adjudicators have held that a claim repeated in a later PC opens a new SOPA window; others have not). Get advice; don't rely on serial re-claiming as a strategy.
"The Superintendent has been chronically under-certifying. Can I just suspend the works?" Under SOPA s27, the Contractor may suspend after giving 2 business days' written notice if a scheduled amount has not been paid by the due date, or if no Schedule was served and no payment made by the due date. Suspension is a serious step — coordinate with the Project Manager and legal counsel before invoking. Get the procedural elements right (notice form, timing, scope of suspension); a defective suspension can constitute Contractor's default under cl 39.
One-page PM checklist (print and pin)
At the start of each project:
- Locate the executed Annexure Part A and record Items 28 (reference date), 30 (Payment Schedule period), 31 (due date for payment), and the cl 41 notification window.
- Confirm contract form: AS 4000-1997 (Construct Only) or AS 4902-2000 (Design & Construct). For 4902, locate and read the PPR.
- Set up the Variation Register (14 columns per §7) on the project drive.
- Verify Saiyu's licence and insurances are current (SOPA s8(2) precondition).
- Diary reference dates, Payment Schedule due dates, and a recurring 25th-of-month reminder to prep the PC.
Within 24 hours of any Superintendent instruction or direction:
- Confirm oral directions in writing.
- Open new VO row in the register.
- Assess whether the direction is a variation under cl 36 (AS 4000: changes WUC; AS 4902: changes PPR).
Within Annexure Part A timeframe of any compensable event:
- Serve cl 41 notice of claim. Don't wait.
At each reference date (typically last day of month):
- Update % Executed for every active VO row.
- Calculate col 13 for each row.
- Freeze the register; attach to the PC.
- Prepare PC cover page identifying it as a Payment Claim under SOPA NSW.
- Prepare Supporting Statement (SOPA s13(7)) — signed by an authorised officer.
- Reconcile: Σ col 7 + original Contract Sum = adjusted Contract Sum.
- Serve PC + Supporting Statement on the date of the reference date (or within 1 BD).
On receipt of the Payment Schedule:
- Compare to PC line by line.
- Identify any under-certified items.
- If under-certified: diary the 10-BD adjudication window from receipt of Schedule (SOPA s17(1)(a)(i)).
- If Schedule is defective (no reasons, vague reasons): get legal advice; do not assume the 10-BD window has started in the normal way.
- If no Schedule arrives by the 10-BD deadline: diary the 20-BD s17(2) notice window from the due date for payment.
Before serving any cl 41 notice:
- Confirm the notice is within the Annexure Part A timeframe.
- Identify the compensable cause and the contractual basis (cl 36, cl 34.5, cl 25, etc.).
- Quantify (or flag "quantum to follow within X days" if quantification needs time).
- CC the Project Manager; file in the project register.
Appendix: References cited in this guideline
Standards
- AS 4000-1997, General Conditions of Contract (Standards Australia, incorporating Amendments 1, 2 and 3). A draft AS 4000-2024 has been circulated; not yet in force.
- AS 4902-2000, General Conditions of Contract for Design and Construct (Standards Australia, incorporating Amendment 1, March 2005).
Legislation
- Building and Construction Industry Security of Payment Act 1999 (NSW) ("SOPA NSW") — particularly ss 4 (business day), 8, 13 (payment claims), 13(7) (supporting statement), 14 (payment schedules), 15 (consequences if no schedule), 17 (adjudication applications), 17(2) (notice when no schedule), 17(3) (timeframes), 27 (suspension), 31 (service), 32 (preservation of contractual rights).
- Home Building Act 1989 (NSW) — referenced for context (owner-occupier residential overlay; out of scope here).
Cases
- Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd [2002] NSWCA 211 — Superintendent's duty to act honestly and impartially when valuing.
- Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161 — contractual deeming clauses cannot extend the s14(4) 10-BD period.
- McDonald v MAK Constructions and Building Services Pty Ltd [2024] NSWCA 63 — SOPA s32 preserves contractual rights notwithstanding adjudication outcomes.
- Pafburn Pty Limited v The Owners – Strata Plan No 84674 [2024] HCA 49 — referenced for context on Design and Building Practitioners Act and proportionate liability (out of scope).
End of guideline. Next review: when AS 4000-2024 is published, or on a change to SOPA NSW Part 3.