What is Div 4 in Aia G703 Continuation Sheet
The AIA G702 Application and Certificate for Payment form is the go-to standard for applying for payments between contractors, subcontractors, employees, and other groups within a construction project. The G702 has a major impact on cash flow for all parties involved. These forms are the industry standard, which is why it is important that you have a good understanding of how payment applications work. In this article, we will outline the different types of forms, why they're important, as well as what they look like.
The Different Kinds of Forms
When dealing with payment applications, there are a variety of forms that you have to be familiar with. To make things easier for you, we have laid out a few common types.
- The AIA G702 is an application filed by the contractor and is bundled with supporting documentation. Once it is certified by the architect, payment will be sent to the contractor.
- Next, is the AIA G703 Continuation Sheet. The G702 and G703 are used together to help keep projects on track. The G703 takes the contract and splits it into separated portions of work using a schedule of values (described below). Once approved, the client will send the billable amount.
- A schedule of values is a detailed list of every task alongside its price for a project.
These forms are common to most construction projects so it's important to be familiar with them. They are verified by the architects, contractors, and clients, and represent a formal account of the work that has been completed. More importantly, these contracts will usually include an interim payment from the client.
How to fill out a G702 form
So here, we will outline the different sections of a G702 form and how to fill it out. As you can see above, there are 3 distinct sections to the form. These 3 sections include a part pertaining to project information, one for the contractor's application for payment, and then finally a section for the architect's approval.
Part 1 – G702 Project Information
This is a relatively straightforward component of the G702 form. This section will include all of the basic info about a project.
Part 2 – Contractor's Application for Payment
- Line 1 – The original contract sum is straightforward and is what the original contract price was as stated in the contract. This does not change for the project.
- Line 2 – Net change by change orders is a field that signifies any change orders that have been agreed upon. This can be a positive or negative amount. A positive amount indicates more work has been added to the contract, whereas a negative amount means that work has been deducted.
- Line 3 – Add your original contract sum with the net change by change orders to arrive at your contract sum to date. Add line 1 to line 2 and this should bring you to your answer.
- Line 4 – For this line, you'll need to pull out your G703 form (also known as the continuation sheet) and simply take the "grand total" from the continuation sheet. This "grand total" is what you'll use to fill in line 4.
- Line 5 – Retainage is the percentage of your payment that is withheld until the project is completed. You will have negotiated this amount prior and is in your contract. Simply plug the percent into 5a and 5b and multiply by the total work completed and value of materials.
- Line 6 – To get the total earned less retainage, simply take the total completed (line 4) and subtract your retainage (line 5). The sum of these two lines is the total billable amount that you've earned up until this point.
- Line 7 – Simply take the value from line 6 of your previous payment application and plug in that number here. This is what you've been paid for up until this point.
- Line 8 – Take line 7 and subtract line 6 to arrive at your billable amount for this period.
- Line 9 – Finally, line 9 is the remaining value left on the contract, including the retainage. Simply take line 3 and subtract line 6 and you will have your expected remaining contract price.
- Finally, the change order summary is where you will be caluclating the figure for line 2. This can be a positive or negative amount.
Part 3 – Signing off on the G702
For the final part, you'll have to sign the document and send off the form to the general contractor or to the client. Once complete, the architect will fill out the bottom section and certify the owed amount. If there are any issues with the payment application, they will send you a response as well as the reasoning.
Payment Application at ContractComplete
At this point, you should have a solid understanding of what some basic payment application forms look like. While creating a payment certificate is relatively straightforward, the process can get repetitive and time-consuming very quickly. That's why we recommend that you take a look at ContractComplete – a comprehensive solution for contractors everywhere. Our digital services will help you manage your projects with ease. Further, ContractComplete allows you to store the document digitally, thus reducing the need to store a physical copy. Above all, our process reduces inefficiencies and ensures that all parties have a clear understanding at all stages of a project.
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Having a consistent and reliable procedure in place allows for simplicity should the need for a change notice arise. We recommend outlining this process from the beginning with project owners. Most importantly, being upfront ensures that everyone is on the same page when changes happen. Being proactive requires deviation from industry norms, which at ContractComplete, we are eager and prepared to provide.
Source: https://www.contractcomplete.com/blog/understanding-the-aia-g702-and-g703-forms/
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