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

By Mike Koger, AIA, Esq. Senior Director and Counsel, AIA Contract Documents

May 20, 2022

A schedule of values is one of the more common items a contractor is expected to provide at the outset of a construction project. A schedule of values is an itemized list that allocates the entire contract sum to the various portions of the work. A schedule of values is typically used when the contractor is paid on a stipulated sum or guaranteed maximum price basis, and it acts as the basis for the architect’s review of the contractor’s applications for payment. AIA Document A201®-2017, General Conditions of the Contract for Construction includes the following requirements for the contractor’s schedule of values:

§ 9.2 Schedule of Values Where the Contract is based on a stipulated sum or Guaranteed Maximum Price, the Contractor shall submit a schedule of values to the Architect before the first Application for Payment, allocating the entire Contract Sum to the various portions of the Work. The schedule of values shall be prepared in the form, and supported by the data to substantiate its accuracy, required by the Architect. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor’s Applications for Payment. Any changes to the schedule of values shall be submitted to the Architect and supported by such data to substantiate its accuracy as the Architect may require, and unless objected to by the Architect, shall be used as a basis for reviewing the Contractor’s subsequent Applications for Payment.

Division 1 of the architect’s specifications often contain further detail about the schedule of values that the contractor is expected to provide. For example, division 1 specifications may describe the form of the schedule of values and the requisite data to substantiate its accuracy.  One reason that the architect may want to review this data is to verify that the schedule of values is not being front loaded. Front loading accelerates cash flow to the contractor, resulting in overpayments early in the project that can be particularly troublesome in the event of a contractor default.

The 2017 edition of the A201 includes a new provision in the last sentence of Section 9.2 that permits revisions to the schedule of values as the project proceeds. Since the actual cost of any specific line item may increase or decrease from the estimate at the beginning of the project, the amount applicable to any line item may change. While the schedule of values seeks to properly allocate the cost of the individual items of work, it may be necessary to revise and move money amongst the various line items throughout the project.

Of course, the main reason a contractor should care about creating a schedule of values is that it is an important step in getting paid. Section 9.3 of A201 requires the contractor to submit an “itemized Application for payment prepared in accordance with the schedule values…”

§ 9.3 Applications for Payment § 9.3.1 At least ten days before the date established for each progress payment, the Contractor shall submit to the Architect an itemized Application for Payment prepared in accordance with the schedule of values, if required under Section 9.2, for completed portions of the Work. The application shall be notarized, if required, and supported by all data substantiating the Contractor’s right to payment that the Owner or Architect require, such as copies of requisitions, and releases and waivers of liens from Subcontractors and suppliers, and shall reflect retainage if provided for in the Contract Documents.

AIA Document G703™–1992, Continuation Sheet, is often used to record the submitted schedule of values, and the G703 is a necessary component in a contractor completing a G702™–1992, Application and Certificate for Payment. The architect will then use the contractor’s schedule of values as a basis for reviewing the contractor’s applications for payment. A schedule of values that is logical, clear, and easy to understand will make the architect’s job to review it much easier and will often result in quicker payments.

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.