AIA Contract Documents
September 9th, 2024
A schedule of values (often abbreviated “SOV”) is an essential document for many construction delivery and payment methods. A quality schedule of values should be able to serve as a sort of financial road map on a project. Therefore, it should itemize the various component parts of the project and assign a dollar value to each, enabling both the contractor and owner to gain a more granular understanding of the costs associated with each phase and component of the project.
AIA Document A201®-2017, General Conditions of the Contract for Construction provides the following with regard to the 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.
The schedule of values demonstrates its value early in a project – §9.2 requires that the schedule of values must be submitted to the architect for approval before any payment application can be made. This should start the parties off on the right foot: a common understanding of the work to be performed and the expected associated costs. This underscores the importance of drafting a schedule of values containing sufficient detail and supporting documentation.
A schedule of values also provides the owner to track project costs and completion percentage throughout the duration of the project. The owner can take assurance from the fact that the budget for the project has been allocated according to various work items. In contrast, the contractor can use the schedule of values as the cornerstone for billing the work it has performed in each pay period. The architect can then use the schedule of values to determine the veracity of the payment application.
The schedule of values is also a crucial tool in managing changes to the project. As the final sentence of §9.2 makes clear, any change to the schedule of values must undergo the same review process as the initial schedule of values. Moreover, when such scope changes occur, it is easier to determine which line items will be affected and require alteration.
The schedule of values is a powerful tool in the toolbox of the owner, the architect, and contractors on a given project. A thoughtfully created schedule of values will add financial transparency, inform decision-making, and facilitate accurate 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.