Guide · 9 min read
Construction Schedule of Values: A Contractor's Guide
What a Schedule of Values (SOV) is, how to build one that owners and lenders actually approve, and how it ties directly into your project schedule for clean monthly progress billing.
What is a Schedule of Values?
A Schedule of Values (SOV) is the line-item breakdown of how the contract sum is allocated across the work. It's the contractual basis for progress billing — every monthly pay application references it. On AIA-standard contracts, the SOV lives on form G703 and rolls up to G702, the application for payment.
For a general contractor, the SOV does three jobs at once: it tells the owner how the money is divided, it sets the structure for every draw, and it gives both sides a shared yardstick for measuring progress. Get it right at the start of the job and pay apps take an hour. Get it wrong and you'll fight over every monthly draw.
The 7-step process
Step 1: Break the contract sum into work items
Mirror your estimate's cost codes — general conditions, sitework, concrete, framing, MEP rough-ins, drywall, finishes, etc. Aim for 20–60 line items on a typical commercial job. Too few and the owner can't track progress; too many and every pay app turns into a paperwork marathon.
Step 2: Assign a scheduled value to each item
The sum of all line items must equal the contract sum. Be honest — front-loading (inflating early line items to improve cash flow) is one of the fastest ways to get a draw rejected or your retainage held. Most owners and lenders run a front-loading check on the first submission.
Step 3: Add general conditions and overhead as their own lines
Don't bury GCs and overhead inside other items. Owners want to see them separately so they can verify burn rate against schedule. Bond, insurance, and permits typically get their own lines too.
Step 4: Tie each SOV line to schedule activities
This is where most contractors leave money on the table. Map each SOV line to the Gantt tasks that complete it. When framing is 60% complete in the field, the framing SOV line is 60% complete on the pay app — no guessing, no arguing with the owner's rep.
Step 5: Submit on AIA G702 / G703 (or the owner's form)
G703 is the line-item continuation sheet (your SOV); G702 is the summary application. Most public and institutional owners require this exact format. Private owners often accept your own form as long as it shows scheduled value, work completed this period, work completed to date, materials stored, retainage, and balance to finish.
Step 6: Update percent complete every billing cycle
Pull percent-complete numbers from the same source as your schedule update — usually the foreman's weekly field report. If your scheduling tool calculates percent complete per task, that number flows straight into the SOV. This is why progress billing on a real scheduling platform beats a standalone spreadsheet.
Step 7: Reconcile materials stored separately
Materials on site but not yet installed go in their own column (G703 column F). The owner typically requires bills of sale, stored-materials insurance, and on-site verification before paying for them. Once installed, the value shifts to 'work completed.'
Worked example: $1.2M tenant improvement
Here's a stripped-down SOV for a $1.2M office TI. Note general conditions broken out separately, and the front-loading-safe distribution (mobilization at 2%, not 8%).
| # | Description | Scheduled value | % of contract |
|---|---|---|---|
| 1 | General conditions | $96,000 | 8.0% |
| 2 | Bonds & insurance | $18,000 | 1.5% |
| 3 | Mobilization | $24,000 | 2.0% |
| 4 | Demolition | $54,000 | 4.5% |
| 5 | Framing & drywall | $168,000 | 14.0% |
| 6 | Electrical | $144,000 | 12.0% |
| 7 | Mechanical / HVAC | $132,000 | 11.0% |
| 8 | Plumbing | $72,000 | 6.0% |
| 9 | Fire protection | $48,000 | 4.0% |
| 10 | Ceilings | $60,000 | 5.0% |
| 11 | Flooring | $84,000 | 7.0% |
| 12 | Doors, frames & hardware | $42,000 | 3.5% |
| 13 | Paint & wall finishes | $54,000 | 4.5% |
| 14 | Millwork & casework | $96,000 | 8.0% |
| 15 | Specialties & signage | $24,000 | 2.0% |
| 16 | Final cleaning & punch | $30,000 | 2.5% |
| 17 | Overhead & profit | $54,000 | 4.5% |
| — | Total contract sum | $1,200,000 | 100.0% |
How the SOV connects to your schedule
The SOV and the construction schedule are two views of the same job. The schedule says when work happens; the SOV says what it's worth. When you tie them together, percent-complete on the schedule drives percent-complete on the pay app automatically.
Example: framing & drywall is worth $168,000. Your Gantt has 12 framing tasks rolled up under a summary bar. When the summary bar is 75% complete, the SOV line is 75% complete — $126,000 earned to date. No spreadsheet reconciliation, no monthly argument over what "60% framed" means.
Common SOV mistakes
- Front-loading. Owners and construction lenders check for it on the first submission. Short-term cash gain, long-term trust damage.
- Burying general conditions. Owners want GCs as a discrete line so they can verify burn rate against schedule duration.
- Too few line items. Lumping everything into 8 lines makes percent complete almost impossible to defend. Aim for 20–60 on most commercial work.
- Disconnected from the schedule. If your SOV percent-complete numbers come from a different source than your schedule update, expect them to drift — and expect the owner's rep to notice.
- Forgetting change orders. Each approved change order gets its own SOV line. Never fold change-order value into an existing line; you'll lose the audit trail.
FAQ
›What's the difference between a Schedule of Values and a budget?
A budget is your internal cost plan — what you expect to spend by cost code, including labor burden, equipment, and indirect costs. A Schedule of Values is the contract-facing breakdown of how the owner will pay you. They share line items but serve different audiences. Your budget is private; the SOV is in the contract.
›Is the AIA G703 format required?
Required on most AIA-standard contracts (A101, A102) and on most public projects. Private owners and design-build contracts often accept your own format, as long as it shows scheduled value, percent complete, work completed this period, work completed to date, retainage, and balance to finish.
›Can the SOV be revised after the contract is signed?
Line-item values can usually be reallocated with owner approval as long as the contract sum doesn't change. Change orders are added as new lines — never folded into existing ones. Once the first pay app is approved, the SOV structure is effectively locked.
›What is front-loading and why is it risky?
Front-loading is inflating the value of early line items (mobilization, sitework) and reducing later ones to improve cash flow. Owners and lenders look for it on the first submission and will hold retainage, demand revised SOVs, or trigger an audit. The short-term cash boost rarely outweighs the relationship damage.
›How does the SOV connect to my construction schedule?
Each SOV line should map to one or more activities on your Gantt. When you update percent complete on the schedule, the same number drives the pay app. Tools like BuildPlan Pro tie SOV lines to schedule tasks so progress billing is automatic instead of a monthly spreadsheet exercise.
Related reading
New to construction scheduling? Start with our Gantt chart tutorial for contractors. It covers the schedule side that feeds the percent-complete numbers on every SOV.