A schedule of values in construction is a line-item breakdown that divides the full contract price into individual tasks and cost categories, each assigned a dollar amount. The general contractor prepares it before the first billing cycle, submits it to the architect or owner for approval, and then uses it as the basis for every payment request through the end of the job. Each line item carries its own value, and the sum of all line items must equal the contract price to the penny. From there, the document controls how much the contractor can bill each month and gives the architect, owner, and lender a shared way to confirm that payments track the work actually in place.
What Goes on the Document
The industry-standard form is AIA Document G703, called the Continuation Sheet. It pairs with AIA Document G702, the Application and Certificate for Payment: the G703 lists every line item and its status, and the G702 serves as the cover sheet that totals the request and carries the architect’s certification.1AIA Contract Documents. G703-1992 Continuation Sheet
A G703 organizes each line item into columns that follow it from the first billing through the last:2AIA Contract Documents. Instructions: G703-1992, Continuation Sheet
- Item number and description — a unique identifier and a plain-English label such as “concrete foundations” or “HVAC installation.”
- Scheduled value — the total dollars allocated to that line item for the full project, labor and materials combined.
- Work completed from previous application — cumulative dollars already billed and approved.
- Work completed this period — dollars of new work since the last billing.
- Materials presently stored — the value of materials bought and stored on- or off-site but not yet installed.
- Total completed and stored to date — the sum of the three preceding columns.
- Percentage complete — the running total divided by the scheduled value.
- Balance to finish — scheduled value minus total completed and stored.
- Retainage — used when the contract allows retainage calculated line by line rather than as a flat rate.
The rule that holds the whole document together: every scheduled value must add up to the exact contract price. If the totals don’t match, the schedule is out of balance and billing cannot proceed.3Oracle Help Center. Schedule of Values Management
How Contractors Build It
Contractors start from their internal cost estimates and subcontractor bids, then slot each cost into the appropriate line item until every dollar of the contract price is accounted for. The harder judgment is where to put costs that don’t attach to a single phase of construction.
Overhead, profit, insurance, and bond premiums have to land somewhere. Some contractors spread them across every line item as a percentage markup. Others create dedicated line items for general conditions, which captures project-wide costs like site supervision, temporary utilities, portable restrooms, and the job-site trailer. Mobilization often gets its own line item for the cost of moving equipment and crews to the site at the start. How these costs get distributed shapes cash flow timing throughout the project.
Each line item also has to reflect realistic market rates. An architect reviewing the schedule will compare the figures against the project specifications and current construction costs. Inflated or unrealistic values get flagged and sent back for revision. Preparation ends when every dollar is accounted for and the document balances against the contract price.
Front-Loading and Why It Gets Pushed Back
Front-loading is the practice of assigning inflated values to early work and deflating values for later tasks. A contractor might overstate site preparation and foundations while understating interior finishes. The motive is cash flow: better money in the early months, when the contractor’s own expenses run highest.
Modest front-loading is common, and most architects and owners tolerate a reasonable amount of it. Aggressive front-loading is a different matter. For the owner, it means payments outrun actual progress, which effectively turns the arrangement into an interest-free loan to the contractor. On federal projects, the Federal Highway Administration has held that grossly front-loaded bids amount to prohibited advance payments and can be rejected outright, even when the solicitation doesn’t explicitly ban unbalanced bidding.4Federal Highway Administration. Rejection of Unbalanced Bids – Contract Administration – Construction
On private projects, the architect’s review is the primary check. AIA A201 gives the architect authority to reject a schedule that doesn’t reasonably reflect the cost of work in each phase. A heavily front-loaded schedule also creates problems at closeout, when the remaining work carries little to no value in the document but still has to get done. Contractors who front-load aggressively often find they have little leverage for final payments or late change orders.
The Monthly Billing Cycle
Once the schedule is approved, it drives a recurring billing cycle, usually monthly. Each cycle, the contractor updates the G703 to reflect work completed since the last billing and attaches it to a signed G702 Application and Certificate for Payment.5AIA Contract Documents. Instructions: G702-1992, Application and Certificate for Payment The G702 summarizes the contract sum, change orders to date, total completed and stored, retainage withheld, previous payments, and the current amount requested. AIA instructions call for the contractor to sign the G702 and have it notarized before submitting it to the architect.
The architect reviews by comparing the claimed percentages and dollar amounts against site observations and inspection reports. Under AIA A201, the architect then certifies the amount requested, certifies a different amount if progress is overstated, or withholds certification. The owner pays based on the architect’s certified amount, not the contractor’s request.5AIA Contract Documents. Instructions: G702-1992, Application and Certificate for Payment Specific timelines vary by contract. Most agreements give the architect a defined window to review and the owner a separate window after certification to process payment, and the general or supplementary conditions will spell those deadlines out.
Each new submission carries forward the cumulative totals from prior months, so the document always shows a running picture of the project’s financial status from start to finish.
Retainage and Stored Materials
Retainage is the percentage of each payment the owner holds back as a financial safety net until the project is substantially complete. Ten percent was historically standard on commercial projects. A growing number of states cap retainage at 5% on private projects, and that trend is accelerating. Each billing period, retainage is calculated by multiplying the retainage percentage against the net amount earned that period, then subtracting it from the payment.
On the G702, retainage appears as a separate line that reduces the total payment due, split between retainage on completed work and retainage on stored materials. When the contract uses a flat rate across the whole project, the calculation lives on the G702 summary. When the contract allows variable retainage by line item, Column I on the G703 is where those calculations go.2AIA Contract Documents. Instructions: G703-1992, Continuation Sheet
Contractors can also bill for materials they’ve purchased and stored but haven’t yet installed, using the stored materials column on the G703. This matters for expensive long-lead items like custom steel fabrications or mechanical equipment, where the contractor has already spent the money but installation is weeks or months away. To get paid for stored materials, the contractor typically has to provide purchase invoices, delivery receipts, photographs of the materials in storage, and proof of insurance. Materials stored off-site face stricter scrutiny, and owners may require a formal storage agreement and the right to inspect before approving payment.
How Change Orders Fit In
Construction projects rarely finish at the price they started. Change orders add, remove, or modify work, and each one adjusts the total contract sum. AIA guidance is not to rewrite the original schedule every time a change order comes through. Instead, change orders are listed separately, either on their own G703 continuation sheet or appended at the end of the existing one.6AIA Contract Documents. Instructions: G703S, Continuation Sheet Contractor-Subcontractor Version The adjusted contract sum, including all approved change orders, is recorded on the G702 cover sheet. The original baseline stays intact while scope changes still flow through the billing.
Segregating change orders this way also makes auditing easier. An owner or lender can see at a glance what was part of the original scope and what was added later, without having to reverse-engineer which numbers changed and why.
Who Reviews the Document
The architect leads the review. Their certification on the G702 carries contractual weight because it represents a professional judgment that the work described in the application has been performed to the standards in the contract documents. The architect can certify the full amount, a reduced amount, or none at all.5AIA Contract Documents. Instructions: G702-1992, Application and Certificate for Payment Owners rely on that certification as their primary assurance that they’re paying only for work actually completed to an acceptable standard.
When the project is financed with a construction loan, the lender adds another layer. Lenders typically require a current schedule of values with each draw request so they can verify that the value of work in place supports the funds being released. Many lenders also send independent inspectors to confirm progress before authorizing the draw. This protects the lender’s collateral interest in the partially completed building and helps keep the project on track financially.
That shared review is why the schedule of values matters as much as it does. It isn’t only a billing form. It’s the reference document that forces the contractor, architect, owner, and lender to agree on what’s been done, what it cost, and what’s left. A well-prepared schedule keeps the monthly cycle moving. A sloppy or inflated one turns every billing period into a negotiation.