What is the significance of a schedule of values in construction?

The significance of a schedule of values in construction lies in its role as a financial management tool that allocates the total contract sum to various segments of the work being performed. It serves as a breakdown of the contract amount into specific line items, each corresponding to different parts of the project, which are often tied to labor, materials, and other project expenses. This allows both the contractor and the client to track progress and payments in relation to work completed.

By establishing this breakdown, the schedule of values also facilitates interim billing and payment procedures. As work is completed, the contractor can submit progress invoices based on the values assigned to completed work items. This provides transparency to the client regarding where money is being spent and helps ensure that payments are made in alignment with actual work completed on the project.

Furthermore, the schedule serves as a useful reference during project meetings and for resolving any disputes regarding payment, as it clearly outlines the financial structure of the contract.