Part-rate payments: how to bill work that isn't finished

A BOQ rate pays for a complete item of work. Plaster includes curing. Flooring includes polishing. A door includes its fittings and painting. On a live site, many items sit part done at bill time: the plaster is on but not cured, the frame is fixed but the shutter has not arrived.

Government and private contracts commonly let the engineer pay for such work at a reduced rate, called a part rate, and pay the balance once the item is complete. Used well, part rates keep cash coming in through a long finishing stage. Used carelessly, they create quantities billed twice and balances nobody remembers to claim.

Part rate, on-account and full rate

The terms overlap, so it helps to fix them. A full rate is the contract rate for the complete item. A part rate is a reduced rate the engineer allows for incomplete work, usually set as a share of the full rate or derived from a rate analysis of the stages done. An on-account payment is a payment made against work whose final quantity or rate is still unsettled, adjusted on a later bill.

Whether part rates are allowed, and who fixes them, depends on your contract. CPWD-style contracts provide for part-rate payments at the engineer-in-charge's discretion. Private contracts may name stage-wise percentages in the BOQ itself. Read the clause before you bill on it, and keep the engineer's written approval of the rate.

How a part-rate line reads on the bill

Take 12 mm cement plaster at a full rate of ₹342 per sqm. In October, 770 sqm has been plastered but curing is not complete. The engineer allows a part rate of ₹290 per sqm, holding back ₹52 per sqm until curing is certified.

Check the arithmetic: 770 times ₹290 is ₹2,23,300, and 770 times ₹52 is ₹40,040. Together they make ₹2,63,340, which is 770 times ₹342. That last check matters. If the two stages do not add back to quantity times full rate, something has been paid twice or dropped.

The double-count trap

The common mistake on RA 8 is to bill the 770 sqm again as quantity, at full rate, under the same item. The cumulative quantity then reads 1,540 sqm for 770 sqm of wall. The engineer catches it, holds the line, and the cumulative columns on every later bill need repair.

The quantity was billed once. Only the rate changes. On RA 8, the item's cumulative quantity stays where the measurements put it, and the balance appears as a rate adjustment against quantity already billed. Some formats show it as a separate sub-line under the item; others show the part-rate quantity and the full-rate quantity in two columns. Follow the client's format, but never let the quantity column count the same wall twice.

Keep a part-rate register

A part-rate register is a short list, per item, of quantity paid at part rate, the part rate, the balance rate and the condition for release. Review it before every bill.

• Item number and description, with the measurement reference.
• Quantity at part rate, and the bill it was first paid on.
• Part rate and balance rate, with the engineer's approval reference.
• The condition that releases the balance: curing, testing, fixing of hardware, final coat.
• Status: pending, ready to claim, claimed, certified.

Without the register, balances are found only at final bill time, months after the work, when the engineer who allowed the part rate may have moved on. With it, each balance is claimed on the first bill after its condition is met.

On-account payments for unsettled rates

On-account payments often arise on extra items and substituted items whose rate is still under approval. The engineer pays a provisional rate on the measured quantity, and the difference is settled when the rate is approved. Treat them like part rates: the quantity is billed once, and the rate adjustment is a separate entry later.

The approved rate can be lower than the provisional one. If so, the difference is a recovery on the next bill, and it is better to compute it yourself than to have the client's accounts team find it.

Questions engineers ask about part rates

• What remains to be done, and when will it be done? Give a date and the activity.
• How was the part rate arrived at? Attach the stage-wise break-up or rate analysis.
• Is any part-rate balance from an earlier bill still pending on this item? Show the register.
• Has any defect been noted on the work paid at part rate? Note it before the engineer does.

Part rates at final bill time

By the final bill, every part-rate line should either be at full rate or carry an agreed reduced rate for work accepted as is. A balance still pending on the final bill usually means the work was never completed or the release was never claimed. The final bill checklist covers this along with the other items to close.

How Tatha Vastu handles part rates

In the RA bill generator, a measurement can be approved at a part rate with its release condition. The quantity enters the cumulative column once. When the condition is met, the balance rate is billed against the same quantity, and the register shows what is still open on every work order.