Schedule Updating and Project Control - Construction Project Scheduling and Control - page 196

general contractor sets another date, usually 2 or 3 days earlier, for the sub-
contractors to bill him or her. All charges that miss the closeout date must wait
until the next billing cycle (i.e., next pay request).
2. The general contractor lists all activities that were worked on. Each activity
will have information such as actual start, actual finish (if completed), percent
complete (if 100%), original budget, cost this period, cost to date,

and cost to complete. The owner may have other stipulations in the contract,
such as retainage. The general contractor must include work performed either
by his or her own workforce or subcontractors.
Materials purchased but not yet installed may or may not be included in
the pay request, depending on the contractual agreement between the owner
and the general contractor.
3. This report goes to the owner, who usually verifies its information. The owner's
representative must verify the completed quantities, unit prices, and totals in
the payment requests. Contractors sometimes front-end load the cost, which
means they get their money earlier than normal. This is done by two means:
first, contractors increase the unit prices of early items and decrease the unit
prices of late items in a way that retains the same total (in lump-sum con-
tracts). This is usually done in the schedule of values that the general contractor
submits to the owner and is called bid unbalancing. The other method of
front-end loading the cost is by exaggerating the percent complete for certain
activities while they are in progress. Most owners do not like, and may not
approve of, such practices. Thus, the owner's verification of the numbers in
the contractor's payment request is important.
4. The payment request can be approved as is or rejected with certain numbers
disapproved. Once the owner approves the payment request, it is processed
and a check is issued payable to the general contractor for the total amount
of the payment request minus any retainage, materials already paid, and/or
penalties. The owner's verification of the pay request and the issuance of the
check usually takes 2 to 4 weeks. When the owner pays the general contractor,
the general contractor then pays the subcontractors.
The owner requests a lien waiver from the general contractor and all sub-
contractors and vendors before issuing the payment.
5. The schedule of values must be updated with the cost items in any change
order.
Standard forms for pay requests, such as AIA G702 (Application and Cer-
tification for Payment) and G703 (continuation to formG702), are used in the
industry. In Europe and some other parts of the world, FIDIC (International
Federation of Consulting Engineers) and NEC (New Engineering Contract)
forms are used.

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