Cost control on site: interim valuations, variations and the final account

A site that looks well planned on paper remains exposed to many uncertainties in execution: unexpected discoveries, changes requested by the client, design errors detected late, unfavourable market conditions. Without regular cost control these accumulate silently and take effect at handover, when it is too late to act.

Cost control on site serves three essential functions: checking that payments to contractors correspond to work actually carried out, tracking the movement of the budget in real time, and formalising changes to the works in a contractually sound way.

ℹ Worth remembering Without structured cost control, the overrun against the initial contract sums risks surfacing only at handover, when it is too late to make choices. Monthly monitoring brings it to light during construction, while decisions are still possible. The difference is precisely the ability to act before the drift becomes irreversible.

An interim valuation is the monthly document by which each contractor declares the progress of its work and claims the corresponding payment. It sets out cumulatively everything carried out since the start of the site, valued at contract prices.

The economist checks each valuation received: consistency between the progress declared and that observed at the site meeting, accuracy of quantities, correct application of the unit rates or the lump sum, and proper account of contractual deductions such as retention and any advance on variations.

• Progress declared ahead of progress actually achieved: pulling payment forward, common at month end.
• Wrong prices applied: using the price from a variation not yet signed, or a unit rate altered unilaterally.
• Duplication with a previous valuation: an item already settled reappearing.
• Retention omitted: the retention left out, where the contract provides for one, at the rate it sets, up to a limit of 5 %; on a public contract, that ceiling applies to the original contract value plus the modifications, and it is 3 % for an SME on contracts of the State and of certain public bodies and local authorities whose operating costs or expenditure exceed 60 million euros (R2191-33, in force since 1 January 2025).

In practice the economist endorses the valuations and issues a payment certificate that the client uses to authorise settlement. This validation circuit is the principal safeguard against payments not properly due.

A variation is a contractual modification of the works contract: works added, works omitted, programme changed, technical specifications altered. On a private contract, it must be formalised in writing and signed by both parties before the modified work is carried out, failing which the contractor may have no contractual basis on which to claim the additional price: according to the MAF, signing a variation is the precondition for any modification of a private contract, unless the contract refers to standard NF P 03-001, and under a lump-sum contract within the meaning of article 1793 of the Civil Code, the contractor obtains an additional payment only for a change authorised in writing, at a price agreed with the client, unless the client has accepted the works expressly and unequivocally once carried out (Cass. 3e civ., 8 June 2023, no. 22-10.393). On a public contract that refers to the CCAG-Travaux 2021, the variation comes after the site instruction. A site instruction from the design team that modifies the time limit, the duration or the amount is approved beforehand by the client, failing which the contractor is not bound to carry it out (art. 3.8.1); for work whose price the contract did not provide, it sets provisional prices, fixed by the design team with the client's agreement after consulting the contractor (art. 13.4); the variation then settles the final prices, unless the contractor, having made no observations within thirty days, is deemed to have accepted them (art. 13.5).

• Additional works: work not in the original contract, requested by the client or made necessary by a discovery on site. They are covered by a variation order or a purchase order according to their value.
• Substituted works: replacing one specified item with another of a different nature. They involve a credit for the omission and a debit for the addition, with a balance that may be positive or negative.
• Price revision: adjusting contract prices according to the formula and coefficients set by the contract's particular documents (CCAG-Travaux 2021, art. 9.4.4, for a contract that refers to it), using the indices they adopt such as BT01, where the contract is at revisable prices; on a public contract, it is so where the parties are exposed to major hazards arising from the reasonably foreseeable change in economic conditions during performance (R2112-13). The economist calculates the revisions using the parametric formula in the administrative conditions.

The economist examines each request: whether the work is necessary, negotiation of prices with the contractor on the basis of the contract's price build-ups or of market comparisons, drafting the variation and following it through to signature. The budget dashboard is updated accordingly.

ℹ Point of vigilance Unformalised variations are a major source of dispute at handover. On a private contract, a contractor who carries out additional work without a signed order or variation may find itself legally unable to be paid for it; on a public contract that refers to the CCAG-Travaux 2021, such work, where the contract did not provide its price, is paid on the site instruction that prescribes it, at the provisional prices that instruction sets, without waiting for the variation (art. 3.8.6, 13.1 and 13.4). Conversely, a client who approves changes verbally without formalising them is exposed to end-of-project claims that will be difficult to contest.

The budget dashboard is the instrument for steering the site economically. For each package it brings together the original contract sum, the variations signed, the current contract sum, the cumulative valuations and the balance outstanding. It gives the client a clear, current view of the project's financial position at any moment.

How to read it: the heating and ventilation package is running 17 % above its original contract, on cumulative variations of 12,500 €. That signal should trigger a review of the causes and, if necessary, a discussion with the client about compensating savings on other packages.

Handover is the act by which the client takes possession of the works and acknowledges, with or without qualifications, that they comply with the contract. It starts the statutory warranty periods: the one-year defects liability period, the two-year warranty on equipment, and the ten-year structural liability.

The economist attends the handover and makes sure any defects are properly recorded in the certificate: a precise description of what was found, the period allowed to put it right, and any effect on payment of the balance.

The final account is the document that definitively settles the position between client and each contractor. It brings together all the work carried out, the variations, the price revisions, any damages and the deductions, arriving at the final amount due.

CCAG-Travaux 2021 time limits, for a contract that refers to it and does not depart from it:

On public contracts the final account procedure is strictly governed by statutory time limits. Failing to observe them exposes the client to interest for late payment, and the contractor to losing its claims if it does not react within the periods allowed.

On private contracts the periods are set by the administrative conditions. The economist sees that they are observed and supports the client in handling any dispute.

Cost control on site is the logical continuation of the cost studies produced during design. It ensures the commitments made at contract are honoured, that changes are formalised before they are executed, and that the project's financial closure takes place on contractually sound terms. Neglecting this phase exposes the client to financial surprises whose effects can far exceed the cost of the monitoring itself.

The nature of the figures quoted

Amounts and rates set by a text are quoted with their article and their date. The other percentages and amounts on this page, dated benchmarks or a fictitious example, are orders of magnitude for framing, not measurements: they substitute neither for a tender exercise nor for an estimate prepared on drawings.