Application and Certificate for Payment: Filling Out G702 and G703

The AIA Application and Certificate for Payment, filed on forms G702 and G703, is how completed construction work becomes money in your account. The G703 continuation sheet breaks the contract price into line items and tracks what has been completed; those totals feed the one-page G702 summary, which the contractor signs and the architect certifies before the owner releases funds. Submit them as a pair, with the right backup, on the schedule your contract requires, and the payment cycle works. Skip a step and it stalls.

How the Two Forms Fit Together

The G702 is the summary. On a single page it shows the contract value, how much work has been earned to date, retainage held, prior payments, and the dollar amount currently due. The G703 is the detail behind that summary. It lists each scope of work with its allocated value, the work completed in prior periods, the work completed this period, materials stored on-site, and the running total.

You fill the G703 out first because its grand total is Line 4 on the G702. The architect reviews both together and signs the Certificate for Payment at the bottom of the G702 to authorize release of funds.¹ Submitting a G702 without the G703 behind it almost always comes back unapproved.

Set Up the Schedule of Values First

Before your first payment application goes in, the architect has to approve a schedule of values. This is the financial breakdown of the entire contract, and it lives on the G703. Each line item has a description, a dollar value, and columns for completion that get updated each billing cycle.²

Most contractors organize by trade: sitework, concrete, structural steel, mechanical, electrical, and so on. Some architects want finer splits, such as rough-in versus finish. Under AIA A201, the architect can require whatever level of detail is needed to verify accuracy, and an unacceptable schedule gets sent back for revision before any payments move.²

Resist the temptation to front-load. Inflating early line items to improve cash flow is a familiar move, and architects watch for it. A schedule where sitework somehow carries 30% of the contract value gets flagged, and some contracts expressly authorize the architect to reject a front-loaded schedule before approving the first payment. Even when a distorted schedule slips through, it creates problems later because the remaining line items no longer carry enough value to cover the work still to come.

The Nine Lines of the G702

The G702 is nine numbered fields that build on one another. An error in an early line cascades through the rest of the form.³

Line 1, Original Contract Sum: the price in your executed contract, before any changes.
Line 2, Net Change by Change Orders: the total of all approved change orders to date, positive or negative.
Line 3, Contract Sum to Date: Line 1 plus Line 2.
Line 4, Total Completed and Stored to Date: pulled directly from the grand total on the G703. Includes both completed work and materials stored on-site.
Line 5, Retainage: the percentage withheld, calculated separately on completed work (5a) and stored materials (5b), then totaled.
Line 6, Total Earned Less Retainage: Line 4 minus Line 5.
Line 7, Less Previous Certificates for Payment: the Line 6 figure from your last application.
Line 8, Current Payment Due: Line 6 minus Line 7. This is the check amount you’re asking for.
Line 9, Balance to Finish, Including Retainage: Line 3 minus Line 6.

Line 8 gets all the attention because it’s the payment. Line 9 is the sanity check. If the balance left on the contract looks too small compared to the work still ahead, something in your completion percentages or your schedule of values needs another look before the architect finds it.

What Else Goes in the Package

The G702 and G703 by themselves rarely get a payment approved. Most contracts require supporting documents with each application, and a missing attachment can delay the whole cycle.

Lien waivers. Owners want proof that money is reaching subcontractors and suppliers. A conditional waiver releases lien rights once a specific payment clears; an unconditional waiver releases those rights because payment has already been received. The common practice is to submit conditional waivers from your subs with each application and collect unconditional waivers after funds change hands.⁴

Payroll and material backup. Many owners want payroll records and material receipts to confirm the costs are real. On federal projects covered by the Davis-Bacon Act, certified weekly payrolls on Form WH-347 are mandatory, with a signed statement that workers are being paid at least the prevailing wage.⁵ Falling behind on those filings will hold up approvals.

Stored materials documentation. If you’re billing for materials sitting on the job site but not yet installed, you have to show they’re properly stored, protected, and insured. Some owners also require a bill of sale or transfer of title. Stored material value gets its own column on the G703 and rolls into Line 4 of the G702.³

Submission Timing and the Architect’s Certification

Once the G702 is complete, the contractor signs it and, when the contract requires, has the signature notarized. The notarized G702 plus the G703 go to the architect as a package.³ Under AIA A201, the application should be submitted at least ten days before the scheduled payment date so the architect has time to review.⁶

The architect checks the numbers against the G703 detail, and where practical visits the site to confirm the reported completion percentages are reasonable. If it all lines up, the architect signs the Certificate for Payment portion at the bottom of the G702. That signature represents the architect’s professional opinion that the work has progressed as claimed and meets contract quality standards, qualified by the form’s own language that it reflects what the architect knows and believes. It is not a statement that exhaustive inspections have been performed, that every subcontractor invoice has been reviewed, or that prior payments were spent correctly.⁷

When the Architect Withholds Certification

AIA A201 Section 9.5 lets the architect withhold a certificate, in whole or in part, when reasonably necessary to protect the owner. The grounds include defective work that hasn’t been corrected, third-party lien claims or credible evidence they’re coming, evidence the contractor isn’t paying subcontractors, reasonable evidence the remaining contract balance won’t finish the job, damage to the owner or other contractors, the project running behind schedule with insufficient funds left to cover delay damages, and a pattern of noncompliance with the contract.

Withholding isn’t all or nothing. The architect notifies both parties, and if they can’t agree on a revised amount, the architect certifies the portion that can be justified. A previously issued certificate can also be nullified if new evidence surfaces. If certification is withheld because subcontractors aren’t being paid, the owner may issue joint checks payable to the contractor and the unpaid party, which effectively routes the money around the dispute. Either side can challenge the withholding through the claims process in Article 15.⁷

Retainage on Line 5

Retainage is the percentage of each earned payment the owner holds back as a safety net to ensure the contractor finishes and corrects deficiencies. On private projects the withheld amount typically runs 5% to 10%, with state laws varying. Many states cap retainage at 5% on public work, and some reduce the permitted percentage once the project passes the halfway mark.³

Under AIA contracts, retainage is released at substantial completion. Once the architect issues a Certificate of Substantial Completion and both the owner and contractor accept it, the accumulated retainage is paid out, adjusted for incomplete or defective punch list items. Final payment covers whatever remains after the contractor completes punch list work, submits as-builts, delivers warranties, and finishes any required owner training.⁶

Retainage is a real financing cost. On a $5 million contract with 5% retainage, the contractor is carrying $250,000 of the owner’s project until near the end. That’s the arithmetic behind retainage reduction clauses at 50% completion.

If the Payment Doesn’t Arrive

Getting the certificate signed is only half the job. Payment timing depends on whether the project is federal, state, or private.

On federal construction contracts, the Prompt Payment Act gives the government 14 days after receipt of a proper payment request to make progress payments, and 30 days for final payment after a proper invoice or government acceptance of the work, whichever is later. Late payments accrue interest under OMB regulations, and these protections have to be flowed down to subcontractors.⁸ Most states have their own prompt pay statutes for construction, generally with deadlines in the 7-to-30-day range after approval, interest penalties for late payment, and in many states the right to recover attorney fees.

AIA A201 adds a contractual remedy. If the architect fails to issue a certificate within seven days of receiving a proper application through no fault of the contractor, or if the owner fails to pay within seven days of the contract due date, the contractor can give seven days’ written notice and then stop work. When work resumes, the contractor can seek a change order for shutdown costs, delay costs, startup costs, and interest.⁶

When the payment system fails altogether, mechanic’s lien rights are the backstop. A mechanic’s lien is a legal claim against the real estate itself, filed by a contractor, subcontractor, or supplier who performed work or furnished materials and wasn’t paid, and it can force a sale to satisfy the debt. Lien deadlines are strict and vary by state, usually running from the date of last work. Miss the window and the right is gone, no matter how much is owed. A credible lien threat is also one of the grounds the architect can rely on to withhold the next certification, which tends to concentrate attention on getting the dispute resolved.⁷

Sign Honestly

The notarized signature on the G702 isn’t a formality. Certifying that subcontractors have been paid for prior work when they haven’t can be treated as fraud, and courts have held that the individual who signed the false application can face personal liability for the owner’s damages even when the contractor is a corporation or LLC. The corporate shield doesn’t cover a personal fraudulent act, and if the owner relied on those representations in making further payments, the signer is exposed.

On government projects, false payment applications can also draw criminal liability under federal fraud statutes. Architects carry their own professional risk if they certify payment for work that is clearly defective or incomplete, which is part of why the certification language on the form is carefully qualified. Verify your numbers before you sign. If a subcontractor payment is in dispute, disclose it rather than certifying everyone has been paid. An honest application that generates questions is a better outcome than a false one that generates a lawsuit.

1
AIA Contract Documents. G703-1992 Continuation Sheet
2
AIA Contract Documents. What Is a Schedule of Values and Why Is It Important to a Contractor
3
AIA Contract Documents. Instructions G702-1992, Application and Certificate for Payment
4
AIA Contract Documents. The Basics of Waivers and Releases of Lien or Payment Bond Rights in Construction
5
U.S. Department of Labor. Instructions For Completing Davis-Bacon and Related Acts Weekly Certified Payroll Form, WH-347
6
University of Wisconsin System. AIA Document A201 – General Conditions of the Contract for Construction
7
American Institute of Architects. AIA Document A201 – General Conditions of the Contract for Construction
8
General Services Administration. 52.232-27 Prompt Payment for Construction Contracts