The Importance of a Schedule of Values (SOV) in Construction
A schedule of values commonly referred to as SOV is a comprehensive documented list of work that was done on a particular project. SOV’s are an essential part of every construction project. Without a SOV, contractors and labor workers would not be able to see what has been done thus far on a project or in what order. SOV’s not only provide you and your team an organized perspective of past completed tasks on a project, but they also organize what still needs to be done in the sequence of completion.
For large commercial contractors, billing against a schedule of values is standard. It is common that smaller contracting groups or remodelers misunderstand a SOV, which can result in your project failing if you do not correctly implement your SOV as a management tool. The SOV will help guide teams and billing during the construction process.
The reason SOV is called schedule of values is that it organizes the different values of each task. From the beginning to the end of a project, contractors, architects, and owners will work closely to determine the cost value of each job to figure out how much will be spent on construction of the project. Once the project has finished, the SOV can determine how much money was estimated to be spent on each task, and how much money was actually spent.
Another reason why SOV’s should always be taken seriously as part of your construction documentation is that they can often become a crucial part of a construction agreement. When this is the case, cost value of work and material can be agreed on before the construction starts. This helps protect contractors financially and legally.
A SOV creates more transparency in the completion of a project, so the client and contractors have the same access to the schedule of values, and no information falls hidden or misunderstood. The schedule of values diminishes the opportunity for contractors to attempt to get funding released early unless they truly need it. By following closely to the schedule of values, there leaves little room for liability to fall on one person in the case that something was to go off track or fall behind during construction.
At the beginning of every construction project, there is no sure way of knowing where it will end up. The smartest way to navigate any potential mishaps a project may experience in the future is to stay on track with the schedule of values. It is not recommended to deviate from the schedule to obtain more money earlier than you are expected because this can hurt your reputation and your project in the end.
An easy alternative to managing and documenting SOV’s for all your projects is to leverage technology into your build processes. Producing SOV’s digitally opposed to on paper makes it easier for contractors, architects, and owners to easily access the “progress to actuals” report on a SOV, as well as any minor or major changes and markups added to a SOV during construction. This way there is little room for discrepancy or loss of valuable work put into your SOV.