What Is a Schedule of Values?
A schedule of values is a detailed breakdown of a construction contract's total value into individual line items, each assigned its own portion of the overall contract price. It is established before billing begins and becomes the reference document every subsequent progress payment is measured against.
What a Schedule of Values Includes
- Line item description:
A discrete scope of work, such as sitework, framing, electrical rough-in, or drywall.
- Scheduled value:
The dollar amount of the total contract allocated to that specific line item.
- Percentage of contract:
Each line item's scheduled value expressed as a share of the total contract sum.
- Material stored:
Value of materials delivered to the site but not yet installed, tracked separately from installed work in some formats.
The line items should sum exactly to the total contract value; a schedule of values that does not tie out to the contract sum cannot be used as an accurate billing basis, since every subsequent percentage-complete calculation is measured against these figures.
Why a Schedule of Values Matters
Without it, a contractor could only bill in lump sums against overall project completion, which gives an owner little visibility into which parts of the work are actually driving the billed amount. Breaking the contract into line items lets an owner or architect verify that billed percentages are reasonable against observable progress on each specific scope, rather than trusting a single aggregate completion percentage.
This is also what makes AIA billing possible: the G703 Continuation Sheet is essentially the schedule of values with a percentage-complete and amount-billed column added for each period.
Building a Schedule of Values
- Break the project into logical scopes of work.
Detailed enough to track meaningfully, but not so granular that maintaining it every billing period becomes impractical.
- Assign a dollar value to each line item.
Based on the estimate or bid that built up to the total contract price.
- Confirm the total ties to the contract sum.
Every line item's value must sum exactly to the agreed contract amount.
- Get owner or architect approval.
The schedule of values typically requires sign-off before the first pay application can be submitted against it.
- Use it consistently for every billing period.
Line items should not be renamed, removed, or restructured mid-project without formal change control, since doing so breaks the ability to compare percentages across periods.
Common Schedule of Values Problems
- Front-loading:
Assigning disproportionately high values to early line items to accelerate cash flow to the contractor, which leaves less contract value, and therefore less leverage, for the owner in later stages of the project.
- Line items that do not sum to the contract total:
An error that undermines every subsequent billing calculation until corrected.
- Overly broad line items:
Categories so large that a claimed percentage complete cannot be meaningfully verified against actual observed progress.
- Inconsistent structure across billing periods:
Changes to line items partway through a project that break the ability to track percentage complete accurately from one application to the next.
Front-loading in particular is something owners and architects specifically watch for when reviewing a proposed schedule of values, since a front-loaded schedule can make early progress payments significantly exceed the actual value of work completed.
Schedule of Values and Change Orders
When a change order modifies the contract scope or value, the schedule of values needs to be updated to reflect it, either by adjusting an existing line item or adding a new one for the changed work. A schedule of values that is not kept current with approved change orders will not tie out to the actual, current contract value, breaking the billing basis for every subsequent pay application.
Frequently Asked Questions About Schedule of Values
1. What is a schedule of values?
A schedule of values is a detailed breakdown of a construction contract's total value into individual priced line items, established before billing begins and used as the basis for every subsequent progress payment application.
2. Why is a schedule of values important?
It lets an owner or architect verify billed percentages against observable progress on specific scopes of work, rather than trusting a single aggregate completion estimate. It is also the foundation the G703 continuation sheet in AIA billing is built from.
3. How do you build a schedule of values?
Break the project into logical scopes of work, assign each a dollar value based on the original estimate, confirm the total ties exactly to the contract sum, get owner or architect approval, and use the same structure consistently for every billing period.
4. What is front-loading a schedule of values?
Assigning disproportionately high values to early line items to accelerate cash flow to the contractor, leaving less contract value and less leverage for the owner in later project stages. Owners and architects specifically review for this pattern.
5. What is the difference between a schedule of values and an AIA G703 form?
The schedule of values is the underlying line-item breakdown of the contract. The G703 continuation sheet is that same breakdown with percentage-complete and billed-to-date columns added, updated each billing period.
6. What happens to the schedule of values when there is a change order?
It needs to be updated to reflect the change, either by adjusting an existing line item or adding a new one. If it is not kept current, it will not tie to the actual contract value, which breaks the billing basis for future pay applications.
