Commentary on the Schedule of Values
The schedule of values for a project as described in CCDC 24: A Guide to Administrative Support Documents is for the purpose of facilitating the consultant’s review of the application for payment. In CCDC 2 GC 5.2, paragraphs 5.2.4 to 5.2.6 set forth the requirements for the schedule of values. It requires the contractor to prepare and submit a schedule of values to the consultant before the first application for payment. The consultant must review and either accept the schedule or request changes.
The fewer items in the schedule, the less effort required of the contractor each month in updating the schedule to reflect the current status of the work. It is easiest for the contractor to provide a breakdown based on the value of the subcontracts. It is unusual for the contractor in the first instance to provide the level of detail needed to facilitate the consultant’s review of the applications for payment.
The optimum breakdown of any item of work in order to facilitate review of an application for payment depends on the nature of the item of work.
- If the materials may be delivered in bulk before being installed, the labour and material costs should be identified separately in the schedule. E.g. hollow metal doors and frames, and installation/labour costs.
- If a subcontract consists of different items of work with materials of different values or quantities, the materials should be identified separately. E.g. porcelain floor tiles and ceramic wall tiles.
- If a subcontract consists of different items of work that will be done sequentially, the materials and the labour involved should be identified separately. E.g. ceiling grids, ceiling grid labour, ceiling tiles, and ceiling tile labour.
One item that is often overlooked is the value assigned to close-out documents (as-built drawings, warrantees, operation and maintenance manuals, etc.). It is often difficult get the close-out documents in a timely manner, and the end of a project is not the time to determine how much the documents are worth. The value of the close-out documents should be determined at the beginning of the project. This will avoid arguments later.
The value assigned will vary with both the size and complexity of the project. The close-out documents for a warehouse shell will be simpler than for a hospital or for a data centre. The value assigned should be low enough to permit the contractor to achieve substantial performance without the close-out documents, but high enough that deemed completion cannot be reached without them. This will encourage the contractor to submit the close-out documents in a timely manner in order to acheive deemed completion and have the finishing holdback released.
The total dollar value at the bottom of the schedule of values must match the contract value and the breakdown by discipline (Architectural, Structural, Mechanical, Electrical) should match the values on the bid form, individual items may vary from those on the bid form. This may occur for example, where a line item in the schedule includes the work of different trades, or work by the contractor’s own forces, where one trade supplies items for installation by another, or where subcontract values are adjusted to reflect a trade’s contribution to the value of close-out documents.
Although it is the contractor’s responsibility to prepare the schedule of values, a sample schedule of values can be included in the project specifications (00 43 73 Proposed Schedule of Values Form) to indicate the desired format, items of particular interest, the general level of detail expected and the value of the close-out documents. Of course, the engineering consultants should be asked to provide input about the desired breakdown for their scopes of work. Including a draft schedule of values in the specification provides a basis for discussion at the project kick-off meeting and can reduce the effort needed to come to an agreement with the contractor on an acceptable schedule of values during project start up.
Since the schedule of values includes much repetitive arithmetic, the writer highly recommends that the consultant create a schedule of values for each project using spreadsheet software or a contract administration software package. When an application for payment is received, the percent complete for each line item can be easily entered in the software, and the totals compared with those of the contractor to determine if there are any calculation errors. Doing so has saved the writer hours of effort tracking down mistakes in applications for payment. A sample workbook is available for download from the Management of the Project pages of the OAA web site.
The inclusion of change orders is a two-stage process since they exist before they are approved and may not be approved in the sequence they were created in. As change orders are issued, they should be recorded in the schedule of values. Once the change order is approved (signed by all parties), it should only then be included in the contract value.
Where a change order contains only one item of work, it can be entered as a single line item in the schedule. Where a change order contains several items of work or aggregates several proposed changes, it is beneficial to include a line item for each item of work in the change order to facilitate review of the application for payment.
A properly set out schedule of values will make the evaluation of the status of progress easier to determine and any amendments made by the consultant easier to explain to the owner and the contractor.
Example Schedule of Values Template