A payment application, also known as a pay app, is a formal request submitted by contractors, subcontractors, or suppliers to receive payment for work performed or materials provided on a construction project. This document is crucial for managing cash flow and ensuring all parties are paid for their contributions.
Key Components of a Payment Application
- Cover Sheet:
- Includes project details such as the project name, address, and contract number.
- Lists the payment application number, date, and the period covered by the payment request.
- Schedule of Values:
- A detailed breakdown of the contract sum, divided into individual work items or phases.
- Specifies the value assigned to each item, helping to track the progress and value of work completed.
- Work Completed:
- Itemizes the work completed to date, including percentages of completion for each line item on the schedule of values.
- Includes both previously billed amounts and the current billing period’s work.
- Stored Materials:
- Details any materials that have been purchased and stored but not yet incorporated into the project.
- Provides a value for these stored materials, which may be included in the payment request.
- Change Orders:
- Lists any approved change orders that have altered the original contract sum or scope of work.
- Adjusts the payment application to reflect these changes.
- Retention:
- Indicates the amount of retention (a percentage of the payment withheld to ensure project completion) being held back by the owner.
- Typically, a fixed percentage of the total contract amount, withheld until final completion and acceptance of the work.
- Previous Payments:
- Summarizes all prior payments received, allowing for an accurate calculation of the current amount due.
- Ensures transparency and helps prevent overbilling.
- Current Payment Due:
- Calculates the amount currently due by subtracting previous payments and retention from the total earned value to date.
- Provides a clear figure for the payment being requested.
