The JBCC final account mistake costing contractors R2M+

Final accounts go wrong long before the final account.

Under JBCC, the final account is the consolidated record of every variation, every adjustment to the Contract Sum, every loss-and-expense claim, every penalty waiver. If it's not in the final account, it's hard to recover.

Two failure modes we see repeatedly.

The first. Contractors submit on time but don't include items that were verbally agreed on site. The Principal Agent's letter back is short — "no documentary record." The variation is dead.

The second. Contractors miss the submission deadline entirely, then try to revive items in the next valuation. By that point the Principal Agent has issued the Final Payment Certificate and is functus officio on items not raised.

We've seen single contracts where contractors walked away from R2M+ in genuinely entitled work because the final account wasn't run as a contract instrument from day one.

The fix isn't a final account checklist. It's running the daily site instructions, contract instructions and variation orders as if you'll need to defend them in three years.

What running it as an instrument looks like

Under JBCC, only the principal agent can issue contract instructions, and an instruction that changes the works is what turns extra work into a variation the contractor is paid for. Everything else on site, from a conversation at a site meeting to a sketch handed over at the gate, is evidence at best. The habits that protect a final account are simple, and they have to start on day one:

• Confirm every verbal instruction in writing to the principal agent the same day, quoting who gave it, when and what it changed, and ask for it to be issued as a contract instruction.
• Keep a site diary that records instructions, delays, weather, labour and plant, and the conditions you found. Photographs with dates are worth more than a recollection months later.
• Measure variations as they happen, while the work can still be seen, and agree quantities with the quantity surveyor before the work is covered up.
• Agree rates for varied work as early as possible. A rate argued about at the final account is argued about without the people who were there.
• Keep claims for additional time and for loss and expense separate from variations. They have their own notice requirements under the contract, and missing those is a different way to lose the same money.
• Diarise every period the contract gives you and the principal agent, from notice periods to the final account submission, and treat each one as a hard deadline.

Before the final account goes in

Reconcile three things against each other: the instructions register, the payment certificates and your own cost records. Every variation should appear in all three. Anything that appears in your costs but not in the instructions register is either a missing instruction or a loss you are absorbing, and you want to know which before you submit, not after the final payment certificate is issued.

Read the edition of the JBCC you are working under, including its contract data and any amendments. Periods and procedures change between editions and are often amended on public and corporate projects, so the right deadline is the one in your contract, not the one you remember.

More on JBCC payment, the final account and how it compares to NEC3 in the JBCC Contract Assistant.