Inside the Schedule of Values

By Lynn Pearcey, MBA, Copywriter, AIA Contract Documents

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March 27, 2024

Table of Contents

  1. Introduction 
  2. Benefits of a Schedule of Values 
  3. Key Components 
  4. Conclusion 

 

Introduction

A schedule of values (SOV) is a crucial financial management tool in construction, providing a structured breakdown of all work items and their associated costs. It ensures budget transparency, tracks project progress, and facilitates smoother payment processes. From project inception to completion, an effective SOV contributes significantly to a project’s success. Contractors and project managers who implement this tool effectively experience better financial control and workflow efficiency, whereas those who overlook it may encounter delays, confusion, and budget overruns. 

 

Benefits of a Schedule of Values


Implementing a schedule of values offers several key advantages: 

1. Improved Project Organization

Regardless of a project’s size, maintaining order on a construction site is critical. A well-structured SOV eliminates uncertainty, ensuring clarity on budget allocations and work progress, which helps prevent inefficiencies and missed deadlines. 

2. Clear Role Definition

An SOV establishes clear responsibilities, outlining who is accountable for specific tasks, when they should be completed, and how they fit into the overall project timeline. This clarity fosters smoother collaboration among stakeholders. 

3. Enhanced Trust and Transparency

Trust is fundamental to any successful construction project. By documenting all financial aspects upfront, an SOV promotes transparency between contractors, clients, and other stakeholders. This reduces disputes and enhances collaboration. 

4. Streamlined Payment Process

Payment delays are a common challenge in construction, often resulting from uncertainty about work completion status. A well-structured SOV mitigates this issue by defining agreed-upon costs, due dates, and payment schedules before the project begins. This minimizes payment disputes and ensures a steady cash flow. 

 

Key Components of a Schedule of Values


For a schedule of values to function effectively, it must include essential details, such as: 

1. Project and Client Information

  • Accurate project name (double-check for errors) 
  • Client’s name and billing address 
  • Site address (if different from the billing address) 

2. Project Identification Details

  • Unique project number (an essential tracking tool) 
  • Contractor’s name and company details 
  • Designated point of contact for project inquiries 

3. Architect and Contract Information

  • Architect’s name and firm 
  • Application date and architect application number 
  • Contract references, including payment terms and conditions 

 

Conclusion


Managing a construction site can be challenging due to the dynamic nature of materials, workers, and machinery. However, implementing a schedule of values helps establish order, streamline financial processes, and reduce uncertainties. 

Contractors who prioritize financial transparency from the outset gain stakeholder buy-in and create a foundation for project success. Using tools such as AIA Document A201-2017 General Conditions of the Contract for Construction and AIA Document G703-1992 Continuation Sheet further enhances the efficiency and reliability of an SOV. 

By maintaining a structured approach and focusing on detail, construction professionals can minimize disruptions, improve financial oversight, and ensure the successful completion of their projects. 

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.