The definition
The schedule of values (SOV) allocates the total contract price across the scopes of work on a project, usually by trade or by CSI division, sometimes by area or phase. On an AIA G703 continuation sheet each SOV line is a row: scheduled value, work completed from previous applications, work completed this period, materials presently stored, total completed and stored, percent complete, balance to finish and retainage. The sum of the scheduled values must equal the contract sum, including approved change orders.
| Term | Meaning |
|---|---|
| Scheduled value | The dollar amount assigned to one line; the line’s share of the contract sum |
| Contract sum | Original contract value plus approved change orders; the SOV must total this |
| Work completed | Cumulative dollars earned on the line, from percent complete times scheduled value |
| Balance to finish | Scheduled value less total completed and stored |
| Front-loading | Assigning more value to early scopes than their cost justifies, to improve early cash flow |
How it is built
- Start from the awarded estimate: each estimate section or cost code becomes a candidate line
- Group lines to the level the owner will accept; too few lines make percent complete arguable, too many make every application a negotiation
- Spread overhead, profit, general conditions and bond across the lines or show them as their own lines, as the contract allows
- Make the lines sum exactly to the contract sum; a rounding difference will be rejected
- Submit to the owner or architect for approval before the first application
- When a change order is approved, add it as a new line or adjust the affected lines, so the SOV still totals the revised contract sum
Owners and their representatives check two things above all: that the SOV totals the contract sum, and that early lines are not inflated. Moderate front-loading of mobilization and early trades is normal and expected; front-loading that would leave the owner over-paid if the contractor walked is what gets an SOV sent back.
Why it matters beyond billing
- Billed-to-date on the WIP schedule is the sum of the SOV’s work completed; an SOV that does not total the contract makes over/under billing wrong
- Retainage is calculated per line, so a step-down or a release by scope depends on the line structure
- Stored materials are billed per line; the line is where double-billing is caught
- Subcontractor pay applications use the subcontract’s own SOV, which should map to the lines on the owner’s SOV that it supports
- Change orders that are not added to the SOV cannot be billed, so unbilled approved changes are usually an SOV maintenance problem
How Forge ERP handles the schedule of values
Forge creates the schedule of values from the awarded estimate with lines that sum exactly to the contract, carries approved change orders into both the contract sum and the billing lines, and bills cumulatively against it with retainage tracked per line on work and stored materials. A pay application can be submitted or certified only when the schedule of values reconciles to the contract sum, and line amounts cannot exceed scheduled value. Subcontracts carry their own schedule of values as governed commitments.
Forge ERP covers projects, purchasing, accounts payable, billing and receivables, job cost and WIP, reporting and close. Payroll runs in your payroll provider and lands in Forge as job-costed labor with burden. Forge is in beta with a 14-day free trial.
Frequently asked
- Is a schedule of values the same as a budget?
- No. The budget is the contractor’s expected cost by cost code. The schedule of values is the contract price allocated to lines for billing the owner. They start from the same estimate, but the SOV includes margin and is agreed with the owner, while the budget is internal.
- How detailed should a schedule of values be?
- Detailed enough that percent complete on each line is observable in the field and not so detailed that every application needs a line-by-line debate. By trade or CSI division is typical for commercial work; large scopes are often split by area or floor.
- What happens to the SOV when a change order is approved?
- The change order’s value is added, either as its own line or as an adjustment to the affected lines, so the SOV totals the revised contract sum. Until that happens the change cannot be billed.