NEC4 Price for Work Done to Date (PWDD) Explained

Price for Work Done to Date (PWDD) is NEC4's term for how much the Contractor has earned at a given assessment date. It's the basis for every interim payment, and the formula changes depending on which main option you're working under. Get the PWDD wrong and you get paid wrong. It really is that straightforward.

PWDD is part of the earned value definitions glossary. For the full formula reference, see the earned value formulas page.

The Definition

PWDD = the cumulative value of work the Contractor has done, calculated using the rules for the specific NEC4 main option

That last part is what trips people up. PWDD isn't one formula. It's a different calculation depending on whether you're on Option A, B, C, D, or E. The NEC4 contract dedicates clause 11.2(32) to defining it, and then each main option clause (50 series) specifies the mechanics.

On an Option A contract, PWDD is the sum of Prices for completed activities. On Option C, it's Defined Cost plus the fee. Same term, completely different arithmetic.

Why PWDD Changes Everything for EVM

If you're running earned value management on an NEC4 project, you need to decide how PWDD maps to your EVM metrics. On Option C and E contracts, PWDD is effectively your Actual Cost (AC), it reflects what's been spent plus the fee percentage. On Option A, PWDD is closer to Earned Value (EV) because it's based on completed activities from the priced schedule, not actual expenditure.

I've watched commercial teams waste weeks trying to reconcile their EVM reports because nobody clarified which EVM metric PWDD was feeding into. Sort this out in month 1. Not month 8.

PWDD by Main Option

Here's where the contract mechanics diverge.

 PWDD CALCULATION BY NEC4 MAIN OPTION ===================================== Option A (Priced contract with activity schedule) ─────────────────────────────────────── PWDD = Sum of Prices for each completed activity in the Activity Schedule ┌──────────────┬──────────┬───────────┐ │ Activity │ Price │ Complete? │ ├──────────────┼──────────┼───────────┤ │ Earthworks │ £420,000 │ Yes │ ──┐ │ Drainage │ £310,000 │ Yes │ ──┤ │ Substructure │ £680,000 │ No │ │ PWDD = £730,000 │ Steelwork │ £540,000 │ No │ ──┘ └──────────────┴──────────┴───────────┘ Only COMPLETED activities count. 50% done = £0 PWDD for that activity. Option B (Priced contract with bill of quantities) ───────────────────────────────────────── PWDD = Sum of (quantity of completed work x rate) for each BoQ item Measured on site, valued at BoQ rates. Re-measurement contract – quantities adjust. Option C (Target contract with activity schedule) ─────────────────────────────────────── PWDD = Defined Cost + Fee ┌──────────────┐ ┌──────────┐ │ Defined Cost │ + │ Fee │ = PWDD │ £6,800,000 │ │ £476,000 │ £7,276,000 │ (actual │ │ (7% of │ │ spend) │ │ DC) │ └──────────────┘ └──────────┘ Actual cost drives payment. Target is separate (for pain/gain). Option D (Target contract with bill of quantities) ─────────────────────────────────────── PWDD = Defined Cost + Fee (Same as Option C – target mechanism identical) Option E (Cost reimbursable contract) ─────────────────────────────── PWDD = Defined Cost + Fee (Same formula, but no target ceiling – Client carries all cost risk) 

The critical distinction: Options A and B are price-based. The Contractor gets paid for completing priced work items, regardless of what they actually spent. Options C, D, and E are cost-based. The Contractor gets paid what they actually spent (Defined Cost) plus a margin (fee).

This difference is fundamental to how you set up EVM. On Option A, the Contractor's spend is invisible to the Client. On Option C, it's the entire payment mechanism.

Worked Example: £18M Option C Contract

The Option A Trap

On Option A, PWDD has a notorious quirk that catches out junior QSs every single time.

An activity is either complete or it isn't. There's no partial credit. If you're 95% through a £500,000 earthworks activity, your PWDD for that activity is zero. Not £475,000. Zero.

This creates a sawtooth pattern in cash flow. The Contractor funds the work through each activity, then receives a lump payment on completion. For large activities, this can mean months of negative cash flow followed by a spike. I've seen a Tier 1 contractor with a £2.4M activity on a highways job that took 14 weeks to complete. Fourteen weeks of funding before they saw a penny.

The smart move is to break large activities into smaller, measurable chunks in the activity schedule at tender stage. But once the contract is signed, the Activity Schedule is what it is.

PWDD vs the Amount Due

Don't confuse PWDD with the amount the Contractor actually receives in an interim payment. The payment calculation under clause 50.2 is:

 AMOUNT DUE CALCULATION ====================== PWDD (this assessment) £7,276,000 - PWDD (previous assessment) £5,890,000 ────────── = Change in PWDD £1,386,000 + Other amounts (e.g. Delay damages paid) £0 - Retention (if Z clause applies) -£69,300 ────────── = AMOUNT DUE £1,316,700 

PWDD is cumulative. The amount due is the movement since the last assessment, adjusted for retention and other items. NEC4 doesn't have a standard retention mechanism. It requires a Z clause if the parties want one. But on Option C, many employers add one.

Common Mistakes

Using partial completion on Option A. I mentioned this above, but it bears repeating. If an activity isn't done, its price isn't in PWDD. No exceptions. Clause 11.2(32) is explicit. I've had to explain this to a project manager who'd certified partial credit on six activities. That's a breach of the contract mechanism, and it distorts every metric downstream.

Forgetting to exclude Disallowed Cost. On Options C and E, Defined Cost drives PWDD. But if the Project Manager has disallowed any cost under clause 11.2(26), that cost must come out of the PWDD calculation. Disallowed Cost isn't part of Defined Cost. It reduces PWDD and, by extension, the Contractor's payment.

Mixing gross and net when feeding EVM. If your BAC includes the fee (which it does if you're using the target total of the Prices), then your AC must also include the fee (i.e., use PWDD, not raw Defined Cost). Otherwise your CPI is inflated by the fee percentage.

Not reconciling PWDD with the cost report. PWDD should reconcile to your project cost report. If it doesn't, something is wrong, either costs have been misallocated, cut-off dates don't align, or somebody's included materials on site that haven't been installed. Chase the difference. Every month.

Frequently Asked Questions

Is PWDD the same as a valuation?

Not exactly. PWDD is the NEC4 mechanism for calculating what the Contractor has earned. A "valuation" is a broader industry term that could include retention deductions, contracharges, and other adjustments. Under NEC4, PWDD feeds into the amount due calculation, which is closer to what other contracts call a valuation. But the terminology matters, using "valuation" on an NEC4 project can cause confusion because the contract doesn't use that word.

Does PWDD include preliminaries?

On Options C, D, and E, yes, if preliminary costs form part of Defined Cost (which they do if they fall within the Schedule of Cost Components or Short Schedule). On Options A and B, preliminaries are typically priced as activities in the Activity Schedule or items in the BoQ, so they're included in PWDD when those activities or items are completed or measured.

How often is PWDD assessed?

At each assessment date, which is set in Contract Data Part 1. Typically monthly, every four or five weeks depending on the assessment interval stated. The Project Manager assesses PWDD within one week of each assessment date (clause 50.1). Late assessment doesn't stop the payment clock, interest accrues.

Can the Contractor dispute the PWDD calculation?

Yes. If the Contractor disagrees with the Project Manager's PWDD assessment, the dispute resolution mechanism under the contract applies. In practice, most PWDD disputes on Option C relate to whether specific costs qualify as Defined Cost or have been correctly disallowed. On Option A, disputes usually centre on whether an activity is genuinely complete.