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Acronymsaka: schedule of valuesaka: SOV

SOV (Schedule of Values)

In Plain English

A line-item breakdown of the total contract price used to calculate monthly payment applications.

Definition

The Schedule of Values is a document prepared by the contractor and approved by the owner and architect that allocates the total contract sum among the major components of work, forming the basis for monthly progress billing. Each line item in the SOV represents a discrete scope of work and has an associated dollar value; as each component is completed, the contractor invoices for the percentage complete against that line item. A front-loaded SOV overstates early work items to collect cash sooner, which owners and architects scrutinize during review.

Why It Matters in Bidding

The schedule of values is the engine of project cash flow, since every progress payment is calculated against its line items. How an estimator and project manager structure the SOV affects how quickly the contractor recovers costs, and an overly front-loaded SOV will be challenged by the owner and architect during review, potentially delaying the first payment application.

Example

At buyout, the project manager breaks the contract sum into SOV line items and weights general conditions and mobilization toward the early months so the first few payment applications cover startup costs without overstating physical progress.

Related Terms

GMP (Guaranteed Maximum Price)COR (Change Order Request)NTP (Notice to Proceed)

Frequently Asked Questions

Detailed enough to bill accurately yet manageable to track each month. Owners and architects favor breakdowns by CSI division or major scope so progress can be verified against installed work. Too few line items make percent-complete disputes likely; too many create administrative burden. Stored materials and general conditions are usually carried as their own lines.
Front-loading inflates the value of early activities like mobilization and foundations so the contractor collects cash faster than work is actually in place. Owners and architects object because it erodes the retainage cushion and leaves them overpaying relative to completion, so they scrutinize and often reject SOVs that overstate early line items.
The contractor prepares it, and the owner and architect or owner's representative review and approve it before the first payment application. Once accepted, it becomes the agreed basis for billing throughout the job. Changes from approved change orders are added as new line items so the SOV always reconciles to the current contract sum.

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