Definition
A schedule of values is an itemized breakdown of a construction contract's total price into individual parts of the work, each with its own dollar value. Agreed before the project starts, it becomes the basis for progress billing: each period, the contractor bills the percentage of each line completed.
Also called: SOV, Cost breakdown
Schedule of values in practice
Lines usually follow trades or phases, such as mobilization, site work, foundations, framing, electrical, plumbing, and finishes. The values must add up to the contract sum, and approved change orders are added as new lines.
Balance the values honestly. Owners and lenders watch for "front-loading", where early items are overvalued so the contractor is paid ahead of the work, and may reject a schedule that looks unbalanced.
A clear schedule of values makes each pay application easy to check and reduces disputes over how much of the work is really done.
Example
A $150,000 remodel has a schedule of values with seven lines, including demolition $12,000, framing $28,000, and electrical $22,000. When electrical is half done, the next pay application bills $11,000 for that line.
Frequently Asked Questions
Who prepares the schedule of values?
The contractor usually prepares it and submits it for approval by the owner or architect before the first pay application.
Can the schedule of values change during a project?
Approved change orders are added as new lines. Moving value between existing lines generally needs the owner's agreement.
Related terms
- AIA billing AIA billing is a construction progress billing method that uses the American Institute of Architects forms G702 and G703 to request payment.
- Progress invoice A progress invoice bills a portion of a larger project as work is completed, rather than one invoice at the end.
- Change order A change order is a documented agreement to modify the original scope of work, including the effect on price and timeline.
- Milestone payment A milestone payment is a payment that becomes due when a defined stage of a project is completed, such as design approval, a prototype delivery, or launch.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.