Progress-payment overbilling review: test cumulative values

Reconcile the authorized value before evaluating progress

Obtain the original contract amount, executed changes and current schedule of values. Compare them with the application summary. Identify pending changes and any special billing instruction separately. A commercially approved change may still have timing or performance conditions for billing.

Record the cutoff date and version for every source. A site assessment completed after the application date can explain a difference without proving the earlier request was accurate. Ask the project professional to establish the relevant progress at the period cutoff and preserve that evidence with the review.

Read current and cumulative values correctly

Check the form's definitions for prior, current and cumulative amounts. Reconcile line totals, retainage, stored value and prior certificates according to the applicable agreement. AIA's official G702 instructions address the summary and continuation-sheet relationship for that form. Use the licensed document where required.

Avoid comparing cumulative work to a single current-period payment and calling the difference overbilling. Keep actual cash received in a separate reconciliation. A prior certificate may remain unpaid while still being the relevant prior deduction in the next application. This distinction prevents a collection problem from becoming an incorrect billing calculation.

Sources: AIA Contract Documents: official G702 application and certificate instructions

Worked example: compare like with like

Assume a fictional project has $300,000 of supported cumulative installed work and $40,000 of eligible stored materials. Under an assumed flat 5% retainage, $340,000 less $17,000 leaves $323,000. With $250,000 previously certified, the current request is $73,000 before other adjustments.

If the draft requests $91,000, identify the source of the $18,000 difference. It could be a prior-value error, a progress disagreement or another contract-specific item. Do not assume the difference has already been paid. The table is an original illustration, not an official payment form or a recommendation to apply 5% retention.

Test apparent progress against the right evidence

Review the underlying quantities, inspection record, location and work package. Photographs can help identify work but may not establish quantities, quality or entitlement on their own. Assign physical verification to the designated professional and preserve their conclusion.

For stored materials, verify the applicable ownership, identification, insurance and approval conditions. Then check the transfer into installed value to avoid double counting. A general statement that materials are “on site” may not answer the agreement's specific conditions. Where federal payment clauses apply, use their actual requirements rather than extending them to every private project.

Sources: FAR 52.232-5: Payments under Fixed-Price Construction Contracts

Resolve disagreements before reporting a result

Present the requested and reviewed values with the source of each difference. Allow the contractor to provide missing records or explain the measurement. The authorized team decides certification and payment treatment under the contract; the audit record should preserve that decision and any reservation.

For Buildalytic, discuss collection of missing support and follow-up on the review question. Price assurance and progress verification are separate scopes to define and validate. Require the final result to identify whether a correction was proposed, agreed, reflected in a certificate or settled in cash. Each stage answers a different business question.

Sources: Buildalytic: current custom-workflow scope