So how do you objectively evaluate and approve a progress claim that is accompanied with a Schedule of Values that contains broad categories such as “Concrete”, “Windows and Doors” or my favourite “General Requirements”.
How do you know “Doors & Windows” are 50% complete? If there is only one dollar value for all Doors & Windows in the project, you don’t know how much the Doors are versus the Windows versus the Hardware. (Hopefully the hardware doesn’t cost as much as the door). Or even the difference between the Exterior doors or Interior doors. These questions are a must, that you really need to ask the contractor right at the start before certifying any progress payments.
Let’s start first with a definition for the Schedule of Values (SOV),
The schedule of values is the formal name for a breakdown of the contract price into components such as foundation, framing, finishing, and so on. The components may be further broken down based on the construction schedule, elements of the project’s construction, or the cost of work by particular tradespeople. Once accepted by the architect, the schedule of values becomes the basis for evaluating the approved payment at the end of each progress draw meeting. CMHC
The CCDC 2 requires in GC 5.2 (and it is similar with the AIA Document 101)
The Contractor shall submit to the Consultant, at least 15 calendar days before the first application for payment, a schedule of values for the parts of the Work, aggregating the total amount of the Contract Price, so as to facilitate evaluation of applications for payment
So when is a good time to start thinking about the Schedule of Values breakdown? Well you already have a reference in your project specifications or if you have cost estimates in the design phase of a project. The Master format system for your specs or the Uniformat system that is often used in cost estimating will be good guides to evaluate the SOV and the level of detail in the breakdowns. The more detail provided in the SOV will only provide you with more confidence when certifying payments, and will help to prevent any “Front End Loading” of payments that can get you into trouble down the road!
For example in your specifications you probably have sections for Metal Doors, Aluminum Doors, Wood Doors, and many other door types. Now you don’t necessarily have to demand to see a breakdown in the SOV for each door type, but there should at least be a distinction of some sort that will allow you to accurately evaluate the construction progress.
As the Consultant or Contract Administrator in most cases you have the authority to request reasonable evidence of the costs and for additional detail as also listed in CCDC 2 – GC5.2.5 if you think the dollar values are inconsistent (once again you can double check with your design cost estimates):
“The schedule of values shall be made out in such form and supported by such evidence as the Consultant may reasonably direct…”
So if on your next site visit you see that all the exterior doors are installed, but have no hardware yet, won’t it be easier and make you feel more confident if you have a corresponding line item for Exterior Doors – 100% and a separate line item for Hardware – 0%.
Let us know what you think? We would welcome any insight you may have, or tales from the trade. Rform also has a Schedule of Values feature that is linked to the Certificates of Payment saving you time while helping to improve the accuracy of your certifications.