What is Schedule of Values ( SOV )?
Definition of Schedule of Values ( SOV ) in Construction
Schedule of values. This is the creation of a comprehensive list of activities that represents a project.
The SOV is used to requisition the project, normally on a monthly basis. The SOV is developed by the contractor and submitted to the architect and owner for approval. The SOV is a valuable tool in the evaluation of percent complete on a project. as well as a management tool for the billing process each month.
The development of the SOV, is extremely important to the contractor, who will attempt to front load the SOV in attempts to increase cash flow on the project. The ability to increase the value of the early activities on a project, and the subsequent early billings of these line items, will allow the contractor to obtain money up front.
The experienced architect and owner will not allow this front loading, and will try to more accurately identify the proper values of each line item on the SOV. The development of the SOV on a project is always an exciting time in the relationships between owners, architects and contractors. The SOV becomes extremely important at the end of the project.
If the owner has allowed a front loading of the requisition, by the contractor, then there will not be enough money remaining in each line item to complete the activity. The contractor will attempt to indicate activity completion by identifying the percent complete on the SOV.
Visual observation on the project will clearly indicate the discrepancies of the billing, and whoever had approved the monthly requisitions will be on the defensive. The SOV at this point in the project becomes invaluable to identify where the money has been spent, in comparison to the actual completion point of the each line item.