Schedule of values: build one your GC approves

What a schedule of values is

A schedule of values, or SOV, is a list of the pieces of work in your contract with a dollar value on each. The values add up to the contract sum. Once the GC approves it, it becomes columns A, B and C of every G703 continuation sheet you send for the rest of the job.

Each month you bill a percentage of each line. So the SOV decides what you can bill for, when, and how easy it is for the GC to agree you’ve earned it.

Why it matters every month

• It sets your cash flow. If a line is too big to show progress on, you wait until it’s done to bill it.
• It’s what the GC checks you against. They walk the job and compare what they see to your percent complete, line by line.
• It can’t easily change. Once it’s approved, moving money between lines needs the GC’s written approval.

How to build one

1. Start from the GC’s format. Many GCs send a template or a list of the line items they want, sometimes by CSI division. Use it. An SOV that matches their structure gets approved faster.
2. Split the work the way it will be built. By floor, area, phase or system. Each line should be something a person can walk the job and see progress on.
3. Price each line at what it really costs, plus your markup. Spread overhead and profit across the lines rather than putting it all on one.
4. Give general items their own lines. Mobilization, bonds and insurance, submittals, and closeout or testing. Closeout is often held to the end, so keep it a fair size.
5. Decide how you’ll handle materials. If you’ll bill for stored materials on big-ticket items like switchgear or equipment, make them separate lines from the labor to install them.
6. Check that it adds up to the contract sum, to the cent, before you send it.

An example schedule of values

Here’s the SOV for Ridgeline Electric, a fictional electrical sub, on a $710,000.00 contract. The lines follow the way the building goes up: power and underground first, rough-in by floor, then gear, fixtures and systems, trim and closeout.

Two things make it easy to bill. Rough-in is split by level, so progress on Level 1 can be billed while Level 2 is still open. And switchgear is its own line, so it can be billed as stored material when it arrives on site, months before it’s installed.

Mistakes to avoid

Lines too big to bill

One line for “Rough-in, entire building” means you can’t show progress until most of it is done, and every month becomes an argument about a percentage. Smaller lines are easier to agree on.

Front-loading

Putting extra value on early lines brings cash in sooner, but GCs and lenders look for it. If they spot it, they’ll ask you to rebalance, and if they don’t, the last lines may not cover the cost of finishing.

Wording that doesn’t match

Column B on every pay app should match the approved SOV exactly. If the description or the order of lines drifts, the GC has to reconcile it by hand, and some will send it back.

Change orders mixed into base lines

Add each approved change order as its own line, with its own number. Raising the value of an existing line instead makes it impossible to tell the base contract from the changes.

Changing the schedule of values later

Change orders are added as new lines at the bottom, and the contract sum to date on the G702 goes up or down by the approved amount. Reallocations, moving value from one line to another, keep the contract sum the same and need the GC’s written approval. Either way, the change shows up on the next pay app, and last month’s totals for the lines that didn’t change carry forward as before.

For the full monthly process, see how to fill out a G702 and G703.