Preliminaries: The Cost That Accrues While You Wait
Measured work is priced by the unit and consumed by the unit. Preliminaries are priced by the contract and consumed by the week — which is why a job that hit every material target can still lose money on a six-week delay.
Every bill of quantities has one section nobody argues about at tender and nobody measures on site. Preliminaries — the site office, the hoarding, water and power, the site agent, the watchman, scaffolding standing whether it carries anyone or not, insurances, the performance bond, the pickup that does three runs a day to Industrial Area. It is priced as a lump sum against a programme and then spent, quietly, by the day.
The distinction that matters is not "big cost versus small cost". It is what the cost is a function of. Four hundred cubic metres of concrete costs roughly what it costs whether the pour takes eight weeks or fourteen: the quantity is fixed by the drawing, and the money follows the quantity. A site agent's salary is a function of time. So is the watchman, the site office rent, the scaffolding hire, the generator, the water bowser and the insurance. Those items do not care how much work got done in the month they were paid for.
Which produces the outcome that confuses contractors most: a project where materials came in on target, wastage was controlled, and the BQ rates held up against actuals can still finish below margin, or below zero. Nothing leaked. The contract simply took longer than the price assumed, and the time-related half of the preliminaries kept running.
What the system can actually hold
Before recommending a method it is worth being precise about the shape of the tools, because the shape is what forces the method. A project in this system carries a single budget figure and a single hours figure — not a structure:
budget_amount, one scalar That last figure is the good news and it is genuinely good: the actual cost of a project is assembled from four channels, so materials drawn from your own store land on the job at cost alongside the timesheets, the purchase orders and the standalone expenses. The bad news is the first three. There is no line-level budget, so a preliminaries section with twenty priced items cannot be loaded as twenty budget lines. And there is no time profile, so the one question preliminaries turn on — are we burning them faster than we are earning them? — has no place to be asked.
First, sort the section by what drives it
Most preliminaries sections are priced as a single column of lump sums, which hides the only classification that matters commercially. Split every item by whether it is bought once or accrues:
Where each preliminaries item sits between one-off and time-related
Site establishment, hoarding, signboard
Spent once at mobilisation. A delay does not repeat it.
Performance bond, contract works insurance
Priced for the contract period — extending the period usually extends the premium.
Scaffolding, formwork and [plant hire](/blog/plant-equipment-custody-kenya)
Hired by the week whether it is loaded or standing idle.
Site agent, foreman, storeman, QS visits
Payroll. The purest weekly cost on the site.
Watchman, site power, water, sanitation, phone
Runs on Sundays and on days when nobody works.
The cost of a delay is the sum of everything on the right, multiplied by the delay. That is one number, most contractors have never calculated it for their own sites, and it is the number that decides whether an extension of time is survivable.
The arithmetic that turns a good job into a bad one
Work it through on a contract where nothing went wrong with the work:
A 40-week contract that finished in 46 — with materials on target
An extension of time protects you from liquidated damages. It does not pay for the time. Money for the time is a separate claim — loss and expense — and it has to be notified, priced and substantiated on its own, which is the same discipline as any other variation nobody priced. A contractor who accepts an EOT and never lodges the cost claim has agreed to fund the delay.
Notice what is not in that arithmetic: theft, wastage, bad rates, or a single incompetent decision. The job was run well. The loss came from the interval, and the interval is invisible in any reporting structure that only knows a total budget and a total spend.
The seam where the number goes missing
Preliminaries are the clearest example of a cost that exists in full detail in one place and arrives in another as a single figure:
The QS holds the build-up; the accounts hold the spend
The commercial side
Where preliminaries are priced
- A priced section with a per-item build-up, item by item
- A programme with a contract period, and a revised date after each extension
- Recovery through interim valuations, usually spread across the measured work
- The loss-and-expense position on every notified delay
The accounting side
Where preliminaries are spent
- A project carrying one
budget_amountand onebudget_hours - A start date and a due date, with no baseline and no revision history
- Actual cost assembled from four channels and correct to the shilling
- Department budgets by category over a month, a quarter or a year
What must cross the seam, and usually does not
- The time-related weekly rate — one number, calculated once, from the priced section
- The current programme date, not the original one, so the burn is measured against the real remaining period
- Which prelim categories are which, so the monthly figure can be read off a report rather than reconstructed
Nothing here needs building. It needs somebody to own the crossing. Where no single person owns it, the QS knows the price and finance knows the spend, and neither knows the variance until the final account.
The two-record pattern, applied to preliminaries
Because the budget dimension and the spend dimension only meet at category, one record cannot do this job. Use two, created once per site:
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A standing project per site
Named for the site, open for the contract. Everything spent on that site codes to it — timesheets, purchase orders, expenses, and stock issued from your central store. This is the only structure that gives you a complete actual, because it is the only one all four spending channels can reach.
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A department per site, and a budget on it per prelim category
There is no branch or site entity, so a department is the working convention for a site — the same convention the wider contractor stack depends on. Budget monthly — the finest period available — against categories you have defined for the time-related items: site staff, site security, site utilities, scaffolding and plant hire, insurances and bonds. Monthly is coarser than the weekly rate you calculated, and it is close enough to see a divergence inside a month rather than at handover.
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Give the time-related items their own expense categories
This is the step people skip, and skipping it is what makes the rest unreadable. If site security is coded to "Security" alongside head-office guarding, the category spans both and can never answer which site. Define the categories deliberately, then the monthly figure is a report you open.
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Recalculate the weekly rate at every extension of time
The rate is time-related preliminaries divided by the period. When the period changes, the rate changes, and the gap between the new rate and the priced rate is the size of the claim you have to lodge. Set a recurring task on the monthly valuation date so it is done by habit rather than by memory — the same milestone and task discipline that keeps the rest of the programme honest.
An extension of time is not payment for time. It is permission to be late — and the site keeps costing what it costs.
The distinction that decides whether a delay is survivable
What AWRA OpsHub does today
- A project per site with a complete actual cost. Four channels are totalled: logged labour, approved and completed purchase orders, expenses, and stock issued from your own store at unit cost. Consumed-percentage and an explicit overrun flag come with it.
- Department budgets by category over a monthly, quarterly or yearly period, with approved purchase-order spend counted as commitment against them.
- Expenses, purchase orders, requisitions, quotations and assets all take attached documents — checksummed, classified, every download logged — so the bowser invoice and the scaffolding hire agreement sit on the record they evidence.
- Custom fields on projects and expenses, so a "time-related / fixed" flag can be captured and made mandatory. This is how the classification above becomes reportable rather than remembered.
- Recurring tasks that genuinely spawn on a schedule, which is the working mechanism for a monthly recalculation habit.
What it does not do
- No bill of quantities and no line-level budget. A project holds one `budget_amount` — a twenty-item priced preliminaries section cannot be loaded as twenty budget lines, here or anywhere in the product.
- No time profile on a project budget. A project has a start date and a due date and nothing in between, so burn-rate-against-programme is not computable from the project record. The monthly department budget above is the workaround, and it is coarser than the weekly rate the commercial position actually turns on.
- No programme, baseline or extension-of-time entity. One `due_date`, overwritten when it moves. There is no original-versus-revised comparison and no record that the date ever changed other than the audit log.
- No liquidated-damages or loss-and-expense tracking. Neither the exposure nor the claim has a home; both are documents you keep and figures you calculate.
- No fixed-versus-time-related classification anywhere in the data model. It exists only if you build it as a custom field or as a deliberate category naming scheme.
- No bond or insurance register with an expiry date. A performance bond and a contract works policy both have dates that matter, and neither has a field that watches them — see the certificate that expired while the work carried on.
The honest summary: this system is strong at telling you what a site has cost, across every channel including your own stores, and it has no concept of what a site was supposed to have cost by week 26. For preliminaries that gap is the whole game, because the cost is a function of time and the system has no opinion about time. If you take one thing from this article into a spreadsheet rather than into software, make it the weekly time-related rate — and then use the monthly department budget to notice when the two have parted company.
The verdict
Preliminaries are not a small cost badly watched; they are a differently-shaped cost watched with the wrong instrument. Split the section into fixed and time-related, calculate one weekly rate, budget the time-related categories monthly against a department that represents the site, and code all spend to a standing project for that site. Then a six-week delay produces a number on the day it is agreed, while there is still a claim to lodge — rather than a surprise at final account, when the only thing left to do is absorb it.
Frequently asked questions
What counts as a preliminary rather than a measured item?
The working test is whether the cost is driven by quantity or by time and the existence of the site. Concrete, blockwork and reinforcement are measured — they scale with the drawing. The site office, the site agent, the watchman, hoarding, scaffolding, utilities, insurances and the bond are preliminaries: they exist because the site exists, and most of them accrue for as long as it does. If a six-week delay increases the cost without increasing the work, it belongs in preliminaries.
How do I calculate the weekly time-related rate?
Take the priced preliminaries section, mark each item fixed or time-related, total the time-related column, and divide by the contract period in weeks. That is your weekly burn. Recalculate it whenever the period changes, because the rate is a function of the denominator — a six-week extension on a forty-week contract dilutes recovery by fifteen percent even if you spend nothing extra.
Can I load a priced preliminaries section as a budget?
Not as lines. A project carries a single `budget_amount` with no category split, and there is no bill-of-quantities structure anywhere in the product. What works is a department representing the site with a monthly budget per preliminary category — site staff, security, utilities, hire, insurances — which gives you a category-level approved figure and a period. It is the same two-record pattern that [ministry and department budgets](/blog/church-ministry-budgets-departments-kenya) need for the same underlying reason.
Does an extension of time cover the extra preliminaries?
No, and this is the most expensive misunderstanding in the area. An extension of time relieves you of liquidated damages for the period granted. Payment for the time is a separate entitlement — loss and expense — which must be notified within whatever the contract requires, priced, and substantiated with records. Contractors who accept the EOT and never lodge the cost claim have agreed to fund the delay out of margin.
Why does site security cost so much more than the budget suggested?
Usually because it was priced against the construction period and paid against the calendar. Guarding runs seven days a week, through the rainy weeks when nothing was poured, through the two weeks waiting for an instruction, and past practical completion until the site is handed over. Any item that runs on days nobody works needs its rate checked against the real elapsed period, not the productive one.
We run four sites. Can I see preliminaries per site?
Yes, if you set the codes up for it. Give each site a standing project so all four spending channels attribute there, and give each site a department so it can carry budgets. The step that decides whether this works is category discipline: a category like "Security" that spans head office and four sites can never answer which site, so define site-facing categories deliberately before the first invoice is coded.
Should preliminaries be recovered evenly across valuations?
Front-loading recovery where the contract permits it is normal and prudent, because mobilisation costs land before any measured work is valued. The risk to watch is the mirror image: if recovery is front-loaded and the contract then over-runs, the later months carry full time-related cost against very little remaining recovery. That is precisely the position worth seeing in month six rather than month fourteen, which is the argument for the monthly budget rather than a single contract-level figure.
