A contractor bill is not an invoice to be checked and paid. It is a claim about how much work has been completed, and certifying it means agreeing that claim against measurement. Get the certification chain right and payments are predictable, deductions are correct and disputes are rare. Get it wrong and you overpay early, then argue about it at the end when you have no leverage left.
The running account structure
| Line | Basis | Example |
|---|---|---|
| Cumulative work done | Measured quantities at contract rates | BDT 3,42,00,000 |
| Less previously certified | From the last bill | BDT 2,86,00,000 |
| Certified this bill | Difference | BDT 56,00,000 |
| Less retention | Contract percentage of certified value | BDT 2,80,000 |
| Less advance recovery | Per the contract recovery schedule | BDT 5,00,000 |
| Less source tax and VAT deduction | Statutory, on the certified amount | Per applicable rates |
| Net payable | Balance |
Two points about this structure. Deductions apply to the certified figure, not the claimed one — see AIT and VAT by transaction. And advance recovery has to follow the contract schedule; recovering "when we remember" is how a mobilisation advance survives to the end of the project.
What the site engineer must actually verify
- Quantity. Measured on site against the bill of quantities, not accepted from the contractor's sheet.
- Rate. Against the contract rate schedule, including any agreed rate for a variation.
- Quality gate. Work that has failed an inspection is not certified, regardless of quantity.
- Variation authority. Extra items require an approved variation order. An unapproved variation certified in a running bill is a change to the contract nobody agreed.
- Material supplied by the developer. Where you supply cement or steel, the value must be recovered, and that recovery depends on issue records — see site material control.
Retention, and remembering to release it
Retention protects you against defects, and it only works if the release conditions are recorded when the deduction is made. A retention register — contractor, project, amount held, release condition, release date — takes minutes to maintain and prevents both of the failure modes: releasing early because the contractor asked persistently, and holding money past the contract date, which damages the relationship and occasionally becomes a claim.
Retention release usually pairs with the defect liability period, which is also when snagging obligations bite — see snag lists and defect liability.
The same measurement feeds two things
The measurement that certifies a contractor bill is the same measurement that establishes construction progress for buyer milestone billing. Producing them from one record rather than two removes a whole class of inconsistency, where the site is 62 percent complete for the contractor and 55 percent for buyers. Milestone billing covers the buyer side.
Variations, the quiet budget killer
Most cost overruns on a building are not one large surprise. They are twenty variations, each individually reasonable, none of them re-costed against the budget at the time. A variation order should carry its own quantity, rate and value, and should update the forecast cost to complete when it is approved — not at the end of the project when the total is discovered.
What to do next
Take the last certified bill on your largest site and check four things: was the quantity measured or accepted, was retention applied at the contract rate, was advance recovered per schedule, and were deductions computed on the certified figure. Each "no" is money already gone — see certification, retention and deductions in one chain.