What is a Schedule of Values and Why is it Important to a Contractor?

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["sup"],["em"],["strong"],["i"]],"sections":[[1,"p",[[0,[],0,"May 20, 2022"]]],[1,"p",[[0,[],0,"A schedule of\nvalues is one of the more common items a contractor is expected to provide at\nthe outset of a construction project. A schedule of values is an itemized list that\nallocates the entire contract sum to the various portions of the work. A\nschedule of values is typically used when the contractor is paid on a\nstipulated sum or guaranteed maximum price basis, and it acts as the basis for\nthe architect\u2019s review of the contractor\u2019s applications for payment. AIA\nDocument A201"],[0,[0],1,"\u00ae"],[0,[],0,"-2017, General Conditions of the Contract for\nConstruction includes the following requirements for the contractor\u2019s schedule\nof values: "]]],[1,"p",[[0,[1,2],1,"\u00a7 9.2 Schedule of Values "],[0,[],1,"Where the Contract is\nbased on a stipulated sum or Guaranteed Maximum Price, the Contractor shall\nsubmit a schedule of values to the Architect before the first Application for\nPayment, allocating the entire Contract Sum to the various portions of the\nWork. The schedule of values shall be prepared in the form, and supported by\nthe data to substantiate its accuracy, required by the Architect. This\nschedule, unless objected to by the Architect, shall be used as a basis for\nreviewing the Contractor\u2019s Applications for Payment. Any\nchanges to the schedule of values shall be submitted to the Architect and\nsupported by such data to substantiate its accuracy as the Architect may\nrequire, and unless objected to by the Architect, shall be used as a basis for\nreviewing the Contractor\u2019s subsequent Applications for Payment."]]],[1,"p",[[0,[],0,"Division\n1 of the architect\u2019s specifications often contain further detail about the\nschedule of values that the contractor is expected to provide. For example,\ndivision 1 specifications may describe the form of the schedule of values and\nthe requisite data to substantiate its accuracy. One reason that the architect may want to review\nthis data is to verify that the schedule of values is not being front loaded. Front loading accelerates\ncash flow to the contractor, resulting in overpayments early in the project\nthat can be particularly troublesome in the event of a contractor default. "]]],[1,"p",[[0,[],0,"The 2017 edition of the A201 includes a new\nprovision in the last sentence of Section 9.2 that permits revisions to the\nschedule of values as the project proceeds. Since the actual cost of any specific line\nitem may increase or decrease from the estimate at the beginning of the\nproject, the amount applicable to any line item may change. While the schedule\nof values seeks to properly allocate the cost of the individual items of work, it\nmay be necessary to revise and move money amongst the various line items\nthroughout the project. "]]],[1,"p",[[0,[],0,"Of course, the main reason a contractor should care about\ncreating a schedule of values is that it is an important step in getting paid. Section\n9.3 of A201 requires the contractor to submit an \u201citemized Application for\npayment prepared in accordance with the schedule values\u2026\u201d "]]],[1,"p",[[0,[1,2],1,"\u00a7 9.3 Applications for Payment "],[0,[],1,"\u00a7 9.3.1 At least ten days before\nthe date established for each progress payment, the Contractor shall submit to\nthe Architect an itemized Application for Payment prepared in accordance with\nthe schedule of values, if required under Section 9.2, for completed portions\nof the Work. The application shall be notarized, if required, and supported by\nall data substantiating the Contractor\u2019s right to payment that the Owner or\nArchitect require, such as copies of requisitions, and releases and waivers of\nliens from Subcontractors and suppliers, and shall reflect retainage if\nprovided for in the Contract Documents."]]],[1,"p",[[0,[],0,"AIA Document\nG703\u2122\u20131992, Continuation Sheet, is often used to record the submitted schedule\nof values, and the G703 is a necessary component in a contractor completing a G702\u2122\u20131992,\nApplication and Certificate for Payment. The architect will then use the\ncontractor\u2019s schedule of values as a basis for reviewing the contractor\u2019s\napplications for payment. A schedule of values that is logical, clear, and easy\nto understand will make the architect\u2019s job to review it much easier and will often\nresult in quicker payments."]]],[1,"p",[[0,[3,2],2,"AIA Contract\nDocuments has provided this article for general informational purposes only.\nThe information provided is not legal opinion or legal advice and does not\ncreate an attorney-client relationship of any kind. This article is also not\nintended to provide guidance as to how project parties should interpret their\nspecific contracts or resolve contract disputes, as those decisions will need\nto be made in consultation with legal counsel, insurance counsel, and other\nprofessionals, and based upon a multitude of factors. "]]]]}