A schedule of values, or SOV, divides a construction contract's total price into line items by scope of work, and every monthly payment on the project is calculated against those lines. Under AIA A201, the contractor submits it before the first application for payment, and once the architect accepts it, the SOV becomes the basis for checking every pay application that follows. It is one of the first financial documents an owner signs off on, and one of the most consequential, because a poorly built SOV lets money get ahead of the work.
What a Schedule of Values Includes
Each line on the SOV represents a defined piece of the work with a dollar value assigned to it. The lines add up exactly to the contract sum. Most commercial SOVs follow the trade breakdown of the specifications, with sitework, concrete, structure, mechanical, electrical, plumbing, and finishes listed separately, plus lines for general conditions, insurance, bonds, and the contractor's fee.
A Schedule of Values Example
On a quick service restaurant, a typical SOV lists general conditions, sitework and utilities, concrete and foundations, framing and structure, plumbing, HVAC, electrical, interior finishes, kitchen equipment installation, insurance and bonds, and the contractor's fee, each with its own scheduled value. If the framing line is 80 percent complete at the end of the month, the contractor bills 80 percent of that line's value, minus what was billed in earlier months and minus retainage. Sitework that finished in month two shows 100 percent and bills nothing new. Interior finishes that have not started show zero. The owner sees that math on every line, every month, which is what makes the SOV a control document and not just an invoice.
How the SOV Drives Monthly Pay Applications
On AIA-based contracts, the SOV lives on the G703 continuation sheet. Each month the contractor updates every line with work completed in the prior period, work completed this period, materials stored on site, the balance left to finish, and the retainage held. Those totals roll up to the G702, the summary page the architect certifies and the owner pays. Lenders on hotel and franchise projects usually require the same forms before they release a draw.
Because the owner is approving percentages, someone has to walk the site and confirm that framing really is 80 percent complete. Under a construction management agreement, the construction manager assembles the trade billings, checks them against field progress, and submits one pay application for the whole job, so the owner reviews a single package instead of a stack of subcontractor invoices.
How a Contractor Builds the SOV
Breaking the Work Into Billable Lines
Lines should be small enough to measure. A single line for all mechanical, electrical, and plumbing work forces the reviewer to guess at a blended percentage. Splitting it into rough-in and trim, or by trade, makes each month's progress easy to verify. On a guaranteed maximum price contract, the SOV should follow the same cost categories the GMP was built on, so savings and contingency can be tracked line by line.
General Conditions, Fee, Insurance, and Bonds
General conditions cover the cost of running the job: supervision, temporary facilities, dumpsters, and similar items. They are usually billed in step with elapsed time. Fee is often billed as a percentage of work completed. Bond premiums and builder's risk insurance are paid up front, so billing them in full on the first pay application is legitimate. The difference between hard costs and soft costs matters here too, since owner-side soft costs such as design fees never appear on the contractor's SOV.
Hotel and Restaurant SOVs
Hotels and franchise restaurants need more from an SOV than a basic trade breakdown. On hotel construction projects, guestroom work is often broken out by floor so owners and lenders can verify progress as each floor turns over. Owner-furnished FF&E stays off the contractor's SOV, while the installation labor stays on it. Franchise and quick service restaurant builds give brand-required items such as drive-thru equipment, signage coordination, and kitchen installation their own lines, because franchisors and lenders want them tracked separately.
Front Loading and What Owners Should Check
Front loading means assigning inflated values to work that happens early, such as mobilization or sitework, so the contractor collects more cash in the first months than the work has earned. The project still adds up to the contract sum, but the owner ends up holding less of the contractor's money as leverage late in the job, when punch list and closeout items need finishing.
Before approving any SOV, compare early-phase lines against the bid breakdown or the preconstruction estimate. Make sure mobilization is a reasonable figure, look for vague lines such as "miscellaneous" with large values, and confirm that line items are detailed enough to inspect. Changes to the original values after approval should require agreement from the owner and the architect.
Change Orders, Retainage, and Closeout
Approved change orders are added to the G703 as new lines, so the original SOV stays intact and each change can be tracked on its own. Retainage is calculated on each line every month and held until the contract allows release, typically at substantial completion with a holdback for unfinished work. By final completion, every line should read 100 percent, and the balance to finish should be zero.
A Schedule of Values Should Be Easy to Check
An SOV is only useful if the owner can check it against the field and against the estimate it came from. That depends on how it was built: lines tied to measurable scopes, values that match the preconstruction pricing, general conditions and fee spread honestly across the job, and change orders kept on their own lines.
Stonehenge Construction Services sets up schedules of values and pay applications the same way we run the projects behind them, with every line built to be checked. If you are planning a hotel, franchise restaurant, institutional, or industrial project, we are glad to walk through how billing will work before the first pay application goes out.
Start Your Project With a Clear Payment Plan
Stonehenge Construction Services builds hotels, franchise restaurants, and institutional projects across Georgia and the Southeast. Talk with our commercial contracting team about your next project.
Call 404.697.0209 or book a consultation today.
