Bank Initial Report / QS Initial Report
A Quantity Surveyor (QS) Initial Report is a critical pre-construction document, often required by lenders, that provides an independent, detailed assessment of a project’s total development costs, financial viability, and risks. It verifies the builder’s contract, identifies potential budget overruns, and ensures sufficient funding is available before work begins.
The initial report is generally required before construction begins or prior to the first loan drawdown.
Key Components of an Initial QS Report
- Total Development Cost Estimation: An independent, detailed breakdown of all material, labor, and associated costs.
- Feasibility Assessment: Analysis to confirm if the project is financially viable.
- Risk Analysis: Identification of potential issues such as cost overruns or delays.
- Review of Documentation: Evaluation of signed builder contracts, quotes, and, if applicable, development approvals such as planning permit, building permit, builder’s insurance policies, builder’s current registration.
- Loan Compliance: Ensuring the project aligns with lender requirements.
Information for QS Bank Initial Report
Progress Certificates
A Quantity Surveyor’s (QS) Progress Certificate is a formal document issued during the construction phase that verifies the value of work completed by a contractor up to a specific date. It is used to certify payment claims, ensuring that the amount paid by the principal (owner) matches the actual progress of the project, including materials on site and approved variations.
Purpose and Function
- Trigger for Payment: The certificate triggers the principal’s obligation to pay the contractor for work completed.
- Independent Verification: It provides an unbiased, third-party assessment of the construction progress.
- Cost Control: It helps ensure the project remains within budget by verifying that payments do not exceed the value of completed work.
- Interim Nature: Progress certificates are generally “on account” and do not represent final acceptance of the work or exclude claims for defects.
A typical progress certificate includes:
- Contract Value: The original contract sum.
- Variations: Approved additions or subtractions to the scope.
- Value of Work Done: The calculated value of work completed to date.
- Materials on Site: Valuation of materials delivered but not yet installed.
- Retention: Amount held back for security or potential defects.
- Previous Payments: Total amounts already paid.
- Net Amount Payable: The final, certified amount due for the current period.
The Process
- Contractor’s Claim: The contractor submits a progress claim detailing the work done.
- Site Inspection & Audit: The QS conducts a site inspection and audits the claim against actual progress.
- Certification: The QS assesses, adjusts if necessary, and certifies the amount payable.
- Payment: The principal pays based on the certified amount, often within a timeframe dictated by Security of Payment legislation
