What is a schedule of values in construction?
A schedule of values (SOV) is a list that divides the contract sum into line items, each with a dollar value, so progress can be measured and billed line by line each pay period. The contractor prepares it and the owner or architect approves it before the first pay application. On AIA projects it lives on the G703 continuation sheet.
A schedule of values is the billing backbone of a lump sum contract. The contractor splits the contract sum into parts (mobilization, site work, concrete, framing, drywall, mechanical, and so on) and assigns each a value. The total must equal the contract sum. Every month, the contractor reports the percent complete for each line, and that drives the pay application. On AIA projects, the SOV lives on the AIA G703 continuation sheet, which supports the G702 application for payment.
The owner or architect usually approves the SOV before the first billing. Once approved, it is hard to change, so getting it right early matters.
A schedule of values example
Say a GC has a $920,000 lump sum contract to build out a fitness center. Here is a simplified SOV and the third month's billing.
| Line | Scheduled value | Percent complete | Completed to date |
|---|---|---|---|
| General conditions | $96,000 | 30% | $28,800 |
| Demolition | $38,000 | 100% | $38,000 |
| Framing and drywall | $164,000 | 55% | $90,200 |
| Plumbing | $118,000 | 40% | $47,200 |
| HVAC | $146,000 | 35% | $51,100 |
| Electrical | $132,000 | 40% | $52,800 |
| Flooring | $91,000 | 0% | $0 |
| Paint and finishes | $62,000 | 0% | $0 |
| Specialties and closeout | $73,000 | 0% | $0 |
| Total | $920,000 | 33.5% | $308,100 |
Approved change orders are added as new lines at the bottom, not blended into the original ones. That keeps the original contract and the changes separately visible, which helps everyone at closeout.
How to build a schedule of values that works
- Match your cost structure. Lines should line up with your cost codes or at least roll up cleanly, so billing and job costing tell the same story.
- Split big lines. A single $300,000 mechanical line is hard to measure. Break it into rough-in, equipment, and trim, or by floor.
- Separate labor and material when allowed. It helps bill stored materials and makes percent complete easier to defend.
- Include closeout and general conditions lines. They make sure some money is tied to finishing, which owners like.
- Mirror your subs. Ask subs for SOVs that match your lines for their scope.
Common SOV disputes
The biggest one is front-loading: putting extra value on early work (mobilization, demolition, sitework) so the contractor collects cash ahead of actual cost. Architects and lenders look for it and may reject the SOV. The opposite problem is back-loading, which squeezes the contractor's cash flow. Other fights include lines too vague to verify and percent-complete claims that do not match what is on site. An honest, detailed SOV is the fastest way to get pay apps approved without haggling.
Subcontractors use the same tool one level down. A sub's SOV to the GC should match the GC's lines for that trade, or at least roll up into them cleanly. When the two do not line up, the GC has to translate every month, and translation is where short pays and arguments about percent complete start.
Related terms
The SOV drives progress billing, the AIA G702, and overbilling and underbilling on the WIP report. For a full walkthrough see how to build a schedule of values. Smart Business Automator generates pay applications from the SOV and keeps change order lines separate.
Frequently asked questions
Who prepares the schedule of values?
The contractor prepares it and submits it to the owner or architect for approval, usually before the first pay application.
Is the schedule of values part of the contract?
It is often referenced by the contract and required as a submittal, but it is generally a billing tool rather than a pricing commitment for each line. Read your contract to see how it is treated.
Can the schedule of values change during the job?
Change orders are added as new lines. Reallocating money between original lines usually requires the owner's or architect's approval.
What form is used for a schedule of values?
On AIA projects, the G703 Continuation Sheet. Many owners and lenders accept a spreadsheet or software report with the same columns.
