What is a Schedule of Values?

A Schedule of Values (SOV) is a detailed breakdown of the costs associated with a construction project, listing each component’s value. It’s commonly used in construction contracts as a billing tool.

Why is a Schedule of Values important?

The SOV provides clarity by itemizing the costs and progress for each construction activity. It aids in monitoring project progress, managing cash flow, and ensuring that payments align with work completed.

How is a Schedule of Values created?

Typically, contractors develop the SOV in collaboration with project stakeholders. It begins with dividing the project into distinct tasks or components and then assigning a value to each based on the contract amount.

Does the Schedule of Values include indirect costs?

Yes, SOVs often include indirect costs like overhead, insurance, and bond costs. These are typically prorated across the project’s duration.

How is work progress measured using the Schedule of Values?

Contractors submit periodic (often monthly) applications for payment, indicating the percentage of each task completed. By comparing these percentages with the SOV, stakeholders can gauge work progress and release payments accordingly.

Is the Schedule of Values the same as a project budget?

Not exactly. While both relate to project costs, the SOV is more detailed and specifically geared towards facilitating periodic billing. A project budget, on the other hand, is a broader financial plan for the entire project.

Can changes in the project scope affect the Schedule of Values?

Yes, significant changes or amendments to project scope will likely necessitate adjustments to the SOV to ensure accurate billing and project tracking.

How do change orders impact the Schedule of Values?

Change orders, which authorize modifications in the project’s original scope, can result in additions or deductions in the SOV. These changes should be itemized separately to maintain clarity.

What happens if there’s a discrepancy in the Schedule of Values?

Any discrepancies, whether in task valuation or progress reporting, should be discussed and resolved between the involved parties—usually the contractor and the project owner or their representatives.

Do all construction projects need a Schedule of Values?

While especially beneficial for large or complex projects, any project that uses a progress billing method can benefit from an SOV. It helps in maintaining transparency and organized billing.