AIA G702/G703: How to Check a Pay Application Before You Release Funds

Application No. 7 arrives Friday afternoon for $2.14M. Payment is due in ten days under the contract, and the general contractor's subs are already asking about it.

Walking the site and measuring every claimed quantity isn't possible. It also isn't the primary control. Most of what goes wrong in a pay application isn't a field question — it's a document question, and it's answered by reconciling the application against paperwork you already have. That's two to three hours of desk work, if you do it in the right order.

What the forms are actually for

The G702 is the summary certificate: contract sum, net change by change orders, total completed and stored to date, retainage, previous payments, current amount due. The G703 is the continuation sheet behind it — the schedule of values, line by line, with the work completed this period, the work completed previously, materials presently stored, and the balance to finish.

The G702 is where the money is. The G703 is where the answers are. If a reviewer only reads the G702, the review has not happened.

One structural point worth internalizing: the schedule of values on the G703 is not a neutral document. It was written by the contractor, at the start of the job, and it determines how every future payment is calculated. Most of the leverage in this entire process was decided when you approved it.

The 12 checks

1. Line items match the approved schedule of values

Every line on the G703 should trace to the SOV baseline approved at contract execution. New lines appearing mid-project, renamed lines, or lines split into sub-lines are all worth a question — a split line is often the mechanism for reallocating value into work already billed.

2. Cumulative to date never exceeds the scheduled value

The single most important check. For each line: completed previously + completed this period + stored materials ≤ scheduled value.

A line billed past its scheduled value means either an unrecorded change order or double-billing across periods. Neither resolves itself.

This requires a cumulative register across every application to date, maintained by you rather than reconstructed from the contractor's carried-forward column. If you don't have one, build it before you certify anything else — desk review is impossible without it.

3. Front-loading

Compare percent complete by division against where the project actually is. Mobilization, general conditions, and early trades billed at 90%+ while the overall project sits at 40% means your money is running ahead of the work.

The consequence isn't theoretical: if the contractor walks or defaults later, the remaining contract balance won't cover the remaining work, and you fund the gap.

4. Percent complete against independent evidence

The claimed percentages should reconcile with daily reports, the current schedule update, inspection records, and photographs. Not with the previous application — that's circular.

Where a trade claims a jump that the schedule update doesn't support, ask before certifying, not after.

5. Only executed change orders

Line 2 of the G702 should reflect change orders that are fully executed. Proposed changes, pending change orders, and construction change directives in dispute do not belong in the contract sum.

This is a routine source of quiet inflation: a pending CO gets folded into the adjusted contract sum, gets billed against, and by the time the pricing is settled you've already paid.

6. Stored materials

The most abused column on the form. Materials billed but not installed require, at minimum: supplier invoices, evidence of transfer of title, segregation and identification, insurance covering the materials while stored, and — for off-site storage — a bill of sale, the storage location, and your right to inspect.

Absent that documentation you're making an unsecured advance on goods you don't own, sitting in a yard you've never seen.

Also check that stored materials from prior periods have moved into "work completed" rather than remaining parked in the stored column indefinitely.

7. Owner-furnished items and allowances

Equipment you procured directly should not appear in the contractor's billed value — only its installation. Allowance line items should be billed against actual documented cost, with the reconciliation attached, not billed at the full allowance amount by default.

8. Retainage

Verify the percentage against the contract, that it's applied to stored materials as well as installed work, and that any step-down at substantial completion has actually been triggered by achieving substantial completion — not by the calendar.

Early or informal retainage reduction removes the only leverage you have left at closeout.

9. Lien waivers

Conditional waivers with the current application; unconditional waivers evidencing payment of the previous application. From the general contractor and from every subcontractor and supplier above your threshold.

Cross-check the waiver list against the subcontractor list on the G703. A trade that's billing but never appears in the waiver package is the exact profile of the party who later files against your property.

In lien jurisdictions, paying a general contractor who doesn't pay downstream can leave you paying twice for the same work. Lien rights, deadlines, and waiver forms differ substantially by jurisdiction — confirm how yours operates before the first payment.

10. Compliance documentation

Where applicable: certified payroll, prevailing wage documentation, insurance certificates still in force for the period billed, and current bond status. Expired insurance during a billed period is a problem you want to find now.

11. The arithmetic

G702 lines 1 through 9 should reconcile internally, the G703 column totals should foot to the G702, and the "previous certificates" figure should match what you actually certified — not what the contractor requested. Carry-forward errors are common and are not reliably in your favor.

12. Period, certification, and signatures

Billing period dates consistent with the contract cycle. Notarization where required. Architect's certification present, and the certified amount — not the requested amount — driving payment.

The deadline that certifies the application for you

Now the part that makes speed matter.

Most US states have prompt payment statutes governing private and public construction. They generally set a window in which the owner must give written notice of the specific amounts in dispute. Miss the window, and in a number of jurisdictions the application is deemed approved, interest begins accruing, and your ability to contest the amount is substantially weakened.

The exact deadlines, the notice requirements, and the deemed-approval consequences vary by state and by whether the project is public or private. Find your rule, put it in the project procedures, and calendar it against every application receipt date.

Two operating principles follow:

Never respond with silence. An unanswered pay application is the weakest possible posture.

Never respond with a general objection. "The application does not reflect work in place" is not a notice of dispute. What works is specific: Line 14, Item 03300 Cast-in-Place Concrete — billed cumulative $412,000 against a scheduled value of $385,000; excess $27,000, no executed change order. Line 22 — stored materials $84,500, no bill of sale or off-site storage certificate provided.

Certify and pay the undisputed portion, withhold the disputed portion, and state the basis line by line. That's a defensible position. A blanket refusal is not, and it exposes you to a claim of your own.

The resourcing problem

An honest estimate: a full desk review of one application on a mid-size project is three to six hours of quantity surveyor time, due inside the payment window, alongside everything else. On a project running two applications a month across multiple contracts, that's a role most owners' teams don't have.

So review becomes sampling, sampling covers the large lines, and the accumulated variance lives in everything else.

What MEXUM does with it

Upload the current G702 and G703, the approved schedule of values, all prior applications, executed change orders, the lien waiver package, and supporting documentation. Fourteen specialist modules reconcile them against each other — building the cumulative register across the full project history, flagging lines billed beyond scheduled value, repeat billing across periods, unexecuted change orders in the contract sum, unsupported stored materials, retainage errors, and gaps in the waiver chain.

You get a written report listing each item, the amount at issue, and the documentary basis — in a form you can use directly as the specific notice of disputed amounts. Turnaround is 24 hours.

We operate in 40+ countries and work to IRC, IBC, EN Eurocodes and local standards, so portfolios spanning jurisdictions are reviewed against the rules that apply on each site.

Reviews start at $100, with enterprise plans for continuous review across a portfolio.

Start with the application currently sitting in your approval queue.

Request an enterprise review →

This article describes commercial and administrative review practice, not legal advice. Prompt payment deadlines, lien rights, and waiver requirements vary by jurisdiction — confirm the rules applicable to your project.