Schedule of values (SOV)
A broad definition is usually ‘a listing of elements, systems, items, or other subdivisions of the work, establishing a value for each, the total of which equals the contract sum’. The schedule of values creates a quantifiable value of a project and its components which provides a cost basis for the contract or agreement formed to undertake the project. This becomes the basis of the works to be undertaken as the reference document in support of the legals to determine all financial measures and values of the work done/to be done/payments/percentage completion and measures of contract performance. It is usual for the schedule to be presented with tender documentation or signed contract as a financial definition of the proposed works. Most countries have some standard Schedule of Value form which is commonly understood and accepted by the construction professionals in each country. In the USA the AIA (American Institute of Architects) has a suite of standard documents available which are in common use and may in practice may be considered the standard format in the USA. Most countries have a standard form issued by either a government Department or the relevant professional body. The long term use of such schedules has enabled the currently available version to be the ‘normally used’ version. The uses are many fold but the primary and most common use is the assessment of works completed, compared with the tendered sum to establish a value(stage valuation) of the works completed. It upon this basis that part payments of the value of works completed can be made under the contract/agreement certified as being satisfactorily completed. When using the Schedule of Values (SOV) for pay down applications the submitter will typically bill on a percentage basis. That is to say that the amount billed that month is __% of the overall schedule of values agreed. This value is then added to the total amount billed from previous payment requests. This total amount would be the total work completed to date. The balance pending completion is then calculated by subtracting the total completed to date from the original total sum. The Architect or Owner’s representative will then normally review and approve the amount due to the contractor during that pay period.