Dayworks or a Measured Rate? A Worked Example of One Variation

The same instructed variation valued two ways, in illustrative riyals, to show why the basis of valuation matters more than the negotiation that follows.

Dayworks pay for the resources used: hours of labour, hours of plant and materials at cost, each with a contractual percentage addition. A measured valuation pays for the quantity produced at a rate. On the same piece of work the two answers can diverge widely, and which basis applies is decided by the contract, not by whichever party prefers the result.

The situation

During a fit out an instruction is issued to form eight new openings through existing blockwork walls to take services, including making good. The work was not in the bill, the area is occupied by other trades and the openings are in scattered locations across two floors. The contractor submits a daywork account. The supervising surveyor believes a measured rate can be built. All figures below are illustrative assumptions chosen to show the arithmetic rather than any market price.

Assumptions (illustrative)

• Eight openings, each roughly 0.6 metres by 0.6 metres through 200 millimetre blockwork, with making good to both faces.
• Contractual daywork labour rate for a skilled operative: 55 riyals an hour, with a 15 per cent addition for overhead and profit.
• Contractual daywork rate for a labourer: 35 riyals an hour, same addition.
• Small plant and power tool allowance under dayworks: 180 riyals a day.
• Contractor recorded resources: two operatives and one labourer for four days.
• Materials for making good at cost: 1,400 riyals, with a 10 per cent addition under the contract.

Step 1: Build the daywork account as submitted

Labour: two operatives for four days at eight hours is 64 hours at 55 riyals, giving 3,520 riyals. One labourer for four days is 32 hours at 35 riyals, giving 1,120 riyals. Labour total 4,640 riyals, plus 15 per cent is 5,336 riyals. Plant: four days at 180 riyals is 720 riyals, plus 15 per cent is 828 riyals. Materials: 1,400 riyals plus 10 per cent is 1,540 riyals. Daywork account total 7,704 riyals.

The account is arithmetically correct and reflects what was spent. It also pays for four days regardless of whether the work needed four days, which is the structural weakness of dayworks and the reason contracts restrict their use.

Step 2: Build a measured rate from first principles

Assume an opening of this size takes one operative and one labourer three hours to cut and clear, and a further two hours between them to make good both faces. That is five hours of operative time and three hours of labour time per opening, at 55 and 35 riyals, giving 275 plus 105, or 380 riyals. Add 25 riyals of materials and a share of small plant at 20 riyals, giving 425 riyals. Apply the contractual 15 per cent, giving 489 riyals an opening, and 3,912 riyals for eight.

The measured rate is a little over half the daywork account. The gap is not dishonesty; it is the difference between paying for output and paying for attendance, and it includes whatever inefficiency the occupied site caused.

Step 3: Test which basis the contract actually permits

Read the valuation clause in order. Is there a comparable bill item for cutting openings in blockwork? If yes, use it, adjusted for conditions. If no, can a fair rate be built, as in step two? If yes, that is the answer. Dayworks typically apply only where the work cannot properly be measured or valued by the other methods.

Here the work is clearly measurable, so dayworks are not the correct basis however carefully the time sheets were kept. The contractor remedy for the inefficiency caused by working in an occupied area is an adjustment to the rate, not a change of basis.

Step 4: Adjust the measured rate for the real conditions

The openings are scattered across two floors in an occupied area, so add an allowance for access, protection, moving between locations and working around other trades. Assume one additional hour of operative time and one of labour time per opening: 55 plus 35, or 90 riyals, plus 15 per cent is 103 riyals. The adjusted rate becomes 592 riyals an opening, or 4,736 riyals for eight.

The adjusted measured valuation is 4,736 riyals against the daywork account of 7,704 riyals. The adjustment is the honest part of the contractor case, and separating it from the basis argument makes the settlement straightforward.

Step 5: Check what the records actually prove

The daywork sheets record four days. Compare them with the site diary, the labour allocation sheets and the progress photographs. If the records show the crew also performed other work during those days, the daywork claim overstates the time spent on the instruction.

Dayworks stand or fall on contemporaneous records signed at the time. Unsigned retrospective sheets rarely survive scrutiny, which is why the signing routine matters far more than the rate negotiation.

Step 6: Settle and record the basis for next time

Agree the adjusted measured valuation of 4,736 riyals, record that the basis was a fair rate built under the valuation hierarchy with a stated conditions adjustment, and add the new rate to a schedule of agreed rates for similar future instructions.

The rate schedule is the real prize. Once a rate for cutting openings exists, the next eight openings are valued in ten minutes, and the argument does not recur.

What changes the answer

• Labour output assumption: changing the time per opening from five hours to seven moves the measured valuation by roughly a quarter, so the output assumption deserves more scrutiny than the hourly rate.
• Quantity: at two openings rather than eight, the setup and access time dominates and the measured rate rises sharply per opening.
• Working restriction: a requirement to work outside normal hours changes both the labour cost and the plant attendance, and it is a condition of execution that justifies a rate adjustment.
• Record quality: if the daywork sheets are signed daily by the supervising engineer, the daywork account becomes far harder to displace regardless of basis.
• Contract percentages: the additions for overhead and profit are tendered figures, so a contract with higher percentages narrows the gap between the two bases.

What the numbers tell you

• The basis of valuation is decided by the contract hierarchy, not by which party produced a number first.
• Dayworks pay for attendance and measured rates pay for output, which is why dayworks are normally a last resort.
• Genuine inefficiency caused by site conditions is recovered through a rate adjustment, which keeps the argument narrow and evidenced.
• Contemporaneous signed records decide daywork claims, so the signing routine is a commercial control and not an administrative one.
• Every agreed new rate should be added to a schedule, because the second instruction of the same type should never need a negotiation.

Limits of this example

Every figure above is an illustrative assumption used to show the method, not a quote, valuation or market rate. Costs, rates, fees and regulations change and must be confirmed with the relevant authority, lender or supplier before you commit.

Domira builds and supervises projects across Saudi Arabia, and the commercial discipline above is how its projects stay inside their budget and their programme. Send the drawings, the contract or the site and Domira will tell you where the risk actually sits.