Application for Payment Forms Used in Construction

Application for payment basic form

An application for payment is a construction document that identifies and presents how a contractor will be paid. The application for payment contains the services or items that are being incorporated or jobs being executed under a contract agreement. It is usually presented as a list with the unit price of each item and the quantities of product/material being furnished. While the type of backup information asked by every contract varies, these documents can be similar to what you will be asked for.

Application for Payment Importance:

An application for payment provides both the owner and the contractor with a method of controlling what items or materials have been provided by the contractor. It is a great tool to expedite payment and minimize error possibility. Also, it is a great tool to keep track of the project cost, balance to completion, material received to date, material installed to date, and work completed.

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Application for Payment General Form

Work with your Invoice
Work with your Invoice (Application for Payment). Photo Cloudhoreca Pixabay

In the industry, there are some standards forms that are commonly used. The most used application for payment forms are:

  • AIA Forms - G702 Application and Certificate for Payment
  • ConsensusDOCS 291: Application for Payment (GMP)-Facilitates the calculation and documentation of progress payments where the basis of payment is a guaranteed maximum price.
  • ConsensusDOCS 292: Application for Payment (Lump Sum)-Facilitates the calculation and documentation of progress payments where the contract price is a lump sum.
  • ConsensusDOCS 293: Schedule of Values-Provides a breakdown of the cost of elements of the work and should be used with the ConsensusDOCS application for payment forms (ConsensusDOCS 291 and ConsensusDOCS 292).

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Application for Payment: Schedule of Values

Application for Payment
Application for Payment. Photo Flickr wrobel

The Schedule of Value is the sheet where items are listed along with their unit prices, quantities, and summary of what has been paid and what is being certified for payment. It provides a general overview of the project status. Depending on how the contract is written, it can be only a lump sum value or itemized list that will provide a better understanding of the work being billed. During the negotiation process and during the RFP and bid process, make sure to provide a sample sheet that can later be used as your schedule of values to ensure a smoother process.

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Application for Payment: Schedule #2

Provide your subcontractor list
Provide your subcontractor list. Photo Stevepb Pixabay

The Schedule #2 provide a comprehensive list of subcontractors that took part during the respective period, performing works under the specified contract. It is required to justify the amounts being certified under the schedule of values. This is very specific in some contracts and will require additional documentation, such as payrolls, certifications, and lien waivers to make sure that all sub-sub have been paid. More

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Application for Payment: Schedule 3

Contract Agreement
Contract Agreement. Photo Jarmoluk

The Schedule #3 under the application for payment is a document that releases and present waivers of claims and stop notices from all Subcontractors furnishing labor, services, or materials covered by the certificate for payment. By submitting this form, you acknowledge and guarantee the client that there will not be any claim by the subcontractors due to payment, performance, or any other possible claim.

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Application for Payment: Schedule 4

Schedule sample. Courtesy of jwalker64

Literally a schedule. Some contracts will require you to submit the latest and most up-to-date project schedule so they can make sure that the project is making progress as expected. There will be some instances when the customer will also ask for photos or videos documenting the project progress. Remember the application for payment is a document and/or process to get paid, is not a document that will accept the right or release your responsibilities for the work being done. Many contractors believe that by been paid the customer is accepting the work and there no claims can be made against them due to the payment being received. that the customer will also ask for photos or videos documenting the project progress. 

Application for Payment

It is very important to provide all of these documents in a timely manner, to avoid delays on getting paid. Remember to always read your contractual obligations as there might be more requirements that only these basic documents. Make sure to submit all receipts, payroll evidence, photos, and lien waivers as required by your contract and to submit those at the proper time as indicated in your contract.