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What is a Pay Application in Construction?
A pay application in construction is a formal request for payment submitted by contractors to the project owner or general contractor. This document details the work completed and materials supplied within a specific period, typically a month. Pay applications ensure that contractors receive timely payments for their services, maintaining cash flow and project momentum.
What is AIA G702?
The AIA G702 form, also known as the Application and Certificate for Payment, is the industry leading document created by the American Institute of Architects (AIA). It is widely used in the construction industry to streamline the billing process and is compatible with AIA's Contracts. However, as AIA and it's forms are a trademarked by the American Institute of Architects, the AIA Document G702 (and also, G703 which we will introduce next) you must buy a licence from the AIA. The AIA G702 form however, includes all the usual information such as the contract sum, the amount of work completed to date, and the amount due for the current period.
AIA G702 and AIA G703
AIA G702 is often used in conjunction with AIA G703, the Continuation Sheet, which provides a detailed Schedule of Values. While G702 provides an overview of the payment application, G703 offers a detailed breakdown of work completed and materials supplied - the Schedule of Values. This continuation sheet lists individual items, such as specific tasks or materials, along with their associated costs and percentages of completion. Together, these forms offer a comprehensive view of the project's financial status, helping project owners and contractors track progress and manage budgets effectively.
AIA G702 Alternatives
While AIA G702 is a popular choice, many Project Owners provide their own style of Application and Certificate for Payment forms. Other than the AIA forms or forms provide by Project Owners, there are alternatives available to use. Some contractors also may use custom forms tailored to their specific needs or project requirements. Other industry-standard forms, like Consensus Docs or forms provided by the Associated General Contractors of America (AGC), offer similar functionality.
Free Download Pay Application Template:
If you are looking for a standard Construction Pay Application Template compatible with any contract, included in this Pay Application template is:
- 1 x Excel Document Application & Certificate for Payment Template
This Construction Pay Application Template is ready for you to download, customize, and utilize for effective financial management. Includes 2 tabs - one for the cover sheet and one for a schedule of values / continuation.
How to Fill in Pay Applications
Filling in Pay Applications form involves several key steps:
- Project Information: Enter the project's name, address, and the names of the contractor and project owner.
- Contract Details: Include the original contract sum, approved change orders, and the total contract sum adjusted for change orders.
- Work Completed: Record the value of work completed to date and any stored materials.
- Previous Payments: Subtract previous payments to calculate the current payment due.
- Retainage: Deduct retainage, if applicable, which is a portion of the payment withheld until project completion.
- Certification: The contractor signs the certification section, affirming the accuracy of the information provided.
- Notarization: Some pay applications require notarization. Ensure the document is notarized by an authorized notary public to validate its authenticity.
- Approval: The architect or project manager reviews and approves the application, certifying that the work is progressing as planned.
If you are looking for how to fill in an AIA G702, AIA Contract Documents provides a resource here. Otherwise, a good example is also here.
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