What is a Schedule of Values in construction?

Example SOV structure

Simplified example. A real SOV may have 20 to 100+ line items depending on contract size and complexity.

What is in a Schedule of Values

The SOV is the source document for the continuation sheet in every pay application. Every billing line on the continuation sheet comes from the SOV.

• Item number and description

  Each line item has a number and a description of the work. On larger projects, descriptions typically follow CSI MasterFormat divisions so the owner and CM can cross-reference against the specifications.

• Scheduled value

  The dollar amount allocated to that line item. The sum of all scheduled values equals the original contract amount. Change orders that are executed get added as new line items at the bottom, increasing the total.

• Work completed this period and to date

  These are filled in at each billing cycle. 'This period' is the new work completed since the last pay app. 'To date' is the cumulative total.

• Materials stored on site

  If the contract allows billing for materials delivered but not yet installed, there is a separate column for stored material value. An approved submittal is usually required before stored materials can be billed.

• Retainage

  The amount being withheld on each line item. Shown separately so the owner can verify the retainage calculation and the contractor can track the total retainage receivable.

• Balance to finish

  Scheduled value minus amount billed to date. Shows how much contract value remains on each line item.

How the SOV is structured

• Front-loading vs. balanced loading

  Front-loading allocates more value to early items such as mobilization and sitework than their actual cost, to improve early cash flow. Owners and CMs recognize front-loading and often push back. Some contracts specifically limit mobilization line items to 5% to 10% of the contract value.

• Mobilization

  The mobilization line item covers setup costs: equipment transport, site office, temporary utilities, bonding costs, and early overhead. It is typically billed at 100% when the contractor has mobilized to the site.

• General conditions

  General conditions cover ongoing overhead costs: project supervision, temporary facilities, small tools, site safety, and similar items. They may be a single line item billed monthly as a percentage of completion, or broken out by category.

• Subcontractor work

  Sub work can appear as a single line item per trade or broken out in detail. The prime contractor typically uses the sub's own billing as the basis for updating the SOV percentage on that line.

• Change orders

  Executed change orders are added as new line items at the bottom of the SOV, increasing the total contract value. A CO that is not yet added to the SOV cannot be billed on a pay application.

Why the SOV matters for cash flow

Cash flow on a construction project depends on how much gets billed and how quickly the owner approves and pays. The SOV structure directly controls both.

• An SOV that undervalues early work means the contractor finances the owner's project out of working capital for the first several months.
• An SOV that overvalues early work can trigger owner objections and slow down pay application approval.
• Too few line items make it impossible to accurately bill partial completion. A single "Sitework" line is harder to justify at 38% than three separate lines for clearing, rough grading, and fine grading.
• Getting SOV approval at the very start of the project, before the first pay app is due, is one of the highest-leverage steps in project financial management.

Common SOV mistakes

• Too few line items: Makes it impossible to bill partial completion accurately. Billing 40% of a single $500,000 line item when only one of three work types is done invites a dispute.
• Lumping unrelated work: Grouping two trade scopes into one line means you cannot bill one complete trade while another is still in progress.
• Omitting stored materials: If the contract allows billing for materials delivered to the site, leaving out the stored materials column costs cash flow.
• Not updating for change orders: Billing a contract line for work that should have been a separate CO line item creates billing disputes and complicates cost tracking.
• Over-inflating mobilization: A 20% mobilization line on a $2 million job will be challenged by most owners and CMs. Know the contract limit before submitting.

The pay application process, step by step

1. 1

   SOV established at contract execution

   The PM submits the SOV to the owner or CM for approval before the first pay application. This is the billing baseline for the entire project.

2. 2

   Monthly update by PM or project engineer

   At the end of each billing period, the team updates the percentage complete for each SOV line item based on field progress reports and quantity logs.

3. 3

   Pay application submitted with cover sheet

   The completed pay application — cover sheet and continuation sheet — is submitted to the owner or CM by the contract billing date, typically the 25th of the month for a month-end billing cycle.

4. 4

   Owner or CM reviews against field observations

   The owner's representative or resident engineer walks the job against the SOV line by line. Line items that are overclaimed get reduced before approval.

5. 5

   Approved amount less retainage is paid

   The owner issues payment for the approved amount minus the retainage holdback, typically within 30 days of approval per the contract payment terms.

Common questions about the Schedule of Values

What is a Schedule of Values in construction?

The Schedule of Values is the line-item breakdown of the construction contract that controls progress billing. Each line item has a dollar value, and the contractor bills against those values each month based on the percentage of work completed. The SOV is the basis for the continuation sheet submitted with each pay application.

What form does a Schedule of Values attach to?

The SOV is the basis for the continuation sheet in a pay application. The continuation sheet breaks the billing down line by line; the cover sheet shows the total amount requested. Some owners use their own billing forms, but the SOV structure is the same regardless of the format.

How many line items should a Schedule of Values have?

Enough to bill each major scope item independently. On a straightforward job, 10 to 20 line items may be sufficient. On a complex project with multiple structures, trades, and phases, 50 or more is normal. The rule is: if a work item can be substantially complete while another is still in progress, they should be separate SOV lines.

What is front-loading in a Schedule of Values?

Front-loading is the practice of allocating more value to early line items, such as mobilization, sitework, and general conditions, than their actual cost warrants. The goal is to improve early cash flow by billing more at the start of the project. Most owners and CMs recognize front-loading and push back during SOV review. Some contracts specify limits on mobilization, often 5% to 10% of the contract value.

What happens if you bill outside the Schedule of Values?

The pay application will be rejected or reduced. The SOV is the billing contract. If a PM submits a pay app that doesn't tie back to the approved SOV line items, the owner or CM will send it back. Change orders that add scope need to be added to the SOV as new line items before they can be billed.

How does HeavyCivilHelper help with Schedule of Values tracking?

HeavyCivilHelper logs field quantities and work completion by location on the project map. When it's time to update the SOV percentages for the monthly billing cycle, the field data is already recorded against specific map areas rather than reconstructed from memory. RFIs, directives, and extra work items are also logged on the map, making it easier to identify what needs a new CO line item on the SOV.

Related topics