Most explanations of the schedule of values stop at the definition: a list that breaks the contract price into line items. That is accurate, but it leaves out the part contractors actually struggle with, which is how the document behaves once the project starts moving.
A schedule of values is not filled out once and filed away. It follows the job from the bid stage to the final payment, and it shapes how money moves at every step along the way. This article walks through that full lifecycle, with a worked billing example, so you can see how the SOV works in practice rather than just on paper.
The Schedule of Values Across the Project Lifecycle
1. Bid stage
The SOV starts life inside the estimate. When a contractor prices a job, the costs are already grouped by trade or phase. Those groups become the first draft of the schedule of values. A contractor who estimates carefully has most of the SOV built before the contract is signed.
2. Submission and approval
After the contract is awarded, the contractor submits the SOV to the owner or architect. They check that the values are reasonable, that the lines are detailed enough to measure, and that early work is not overvalued. Approval usually has to happen before the first pay application can be processed. For a deeper look at the fundamentals, this guide to the schedule of values in construction by Stancon Consultants covers how the document is structured.
3. Monthly progress billing
Each billing period, the contractor reports how much of each line has been completed. The SOV values stay fixed, and only the progress changes. On AIA contracts, this is done on the G703 continuation sheet, which is built directly from the SOV.
4. Change orders
When scope changes, the approved change order is added to the SOV as a new line with its own value. The original lines are left alone, so everyone can see the original contract and the changes separately.
5. Retainage and closeout
Most contracts hold back a percentage of each payment, often 5 to 10 percent, as retainage. The SOV tracks how much has been held on each line. At substantial or final completion, once punch list items and closeout documents are finished, the retainage is released and the final payment is made.
A Worked Example: Billing One Line Item
To see how the SOV drives payments, follow a single line through the project. Say the concrete line is valued at $150,000 and the contract holds 10 percent retainage.
| Month | Work this period ($) | Total to date ($) | % complete | Retainage held to date ($) | Paid this period ($) |
|---|---|---|---|---|---|
| 1 | 30,000 | 30,000 | 20% | 3,000 | 27,000 |
| 2 | 60,000 | 90,000 | 60% | 9,000 | 54,000 |
| 3 | 45,000 | 135,000 | 90% | 13,500 | 40,500 |
| 4 | 15,000 | 150,000 | 100% | 15,000 | 13,500 |
| Closeout | — | 150,000 | 100% | 0 (released) | 15,000 |
The scheduled value of $150,000 never changes. Each month, the contractor bills only the progress made, the owner holds back 10 percent, and the held amount is paid out at closeout. Every other line on the SOV works the same way, and the totals across all lines become the payment request for that month.
General Contractors vs. Subcontractors
Both general contractors and subcontractors use a schedule of values, but at different levels.
The general contractor’s SOV covers the whole project. It is submitted to the owner and usually organized by trade or CSI division, with lines for general conditions, site work, structure, finishes, and MEP systems.
A subcontractor’s SOV covers only that trade’s scope. An electrical subcontractor, for example, might break the work into rough-in, panels, fixtures, low-voltage systems, and testing, often by floor or area. The general contractor reviews these and rolls them up into its own pay application to the owner.
For subcontractors, a clear and well-supported SOV is especially important. Payments flow down through the general contractor, so any confusion in the subcontractor’s billing can delay the money even further.
Best Practices for Managing a Schedule of Values
- Build it from the estimate, not from memory. Values that match how the job was priced keep billing aligned with real costs.
- Match lines to how progress is measured. If the site is inspected by floor or area, split lines the same way.
- Keep general conditions separate. Bill them steadily over time rather than tying them to physical progress.
- Avoid front-loading. Overvaluing early work may bring cash in sooner, but it damages trust and often leads to stricter reviews.
- Document progress every month. Photos, daily reports, and delivery tickets make percent-complete claims easy to approve.
- Track change orders on their own lines. This keeps the original contract clear and makes final reconciliation much simpler.
- Review the SOV before closeout. Make sure every line reaches 100 percent and all retainage is accounted for before the final pay application.
Frequently Asked Questions
When is the schedule of values submitted? Usually right after the contract is signed and before the first pay application. Many contracts set a specific deadline for it.
How is retainage shown on a schedule of values? Retainage is calculated on the amount completed for each line and tracked as a running total. It is released at substantial or final completion, depending on the contract.
What happens if work on a line costs more than its scheduled value? The contractor cannot bill more than the line’s value. Extra cost is only recoverable through an approved change order.
Can stored materials be billed on a schedule of values? Often yes. Many contracts allow billing for materials delivered and stored, as long as proof such as invoices or photos is provided.
Does a lump-sum contract still need a schedule of values? Yes, in most cases. Even when the total price is fixed, the SOV is what allows that price to be paid in progress payments.
Conclusion
The schedule of values in construction is more than a billing form. It starts in the estimate, gets approved at contract award, drives every monthly payment, absorbs change orders, and finally closes out with the release of retainage.
Contractors who treat it as a living document, kept accurate and supported month after month, get paid faster and spend far less time arguing over invoices.
Stancon Consultants