- Schedule of Values Resources
A Schedule of Values, or SOV, is a list of every work item on a project, along with each item’s value or cost. This comprehensive work list represents the entire construction project and the entire contract price, from beginning to end. According to the standardized contract documents from the American Institute of Architects (AIA), “The schedule of values shall allocate the entire contract sum among the various portions of the work.”
The schedule of values shows the total project on paper, step by step. This allows the architect or project owner to quickly see the percentage of each item that has been completed. The subcontractor typically submits the schedule of values with an application for payment and any other documentation to support the request. The architect or owner then reviews the documents and either dispute or agrees to the progress payment.
In practice, the amount of detail necessary can vary. On some jobs, the owner or architect might require that every line be broken down such that each work item is valued at less than $20,000. On other projects the value threshold may be more or less. There is no single, industry-wide accepted value threshold.
This is a simple example of a completed schedule of values:
Project owners and architect often require a schedule of values for the management of the cash-flow and progress payments on the project. It is particularly common on a commercial, public, or complex residential project. Generally, only first-tier (prime or general contractors) and second-tier subcontractors will need to fill out a schedule of values. However, a schedule of values can provide valuable insights and oversight to contractors on any construction project.
Cash flow is the lifeblood of any contractor. The schedule of values, and the work amounts and costs listed, represent the cash flow on a construction project. Unscheduled overruns can spell disaster, even for contractors that are generally well-prepared to manage cash flow issues. Contractors rely on a schedule of values to ensure the work is progressing as it should. Owners and architects use the SOV to justify the appropriate progress payments.
A schedule of values is used as a management tool in pay application processing, and as a valuable tool in evaluating the progress of a project relative to the plan. Since cash flow is measured by the SOV, the timing of payments depend on how well the contractor put the SOV together.