Retainage errors
Retainage withheld at the wrong percentage, or reduced before the contract's milestone was reached.
Construction Pay Application Review
Review construction pay applications against the contract.
AllCaps reviews construction pay applications against the prime contract or subcontract, the schedule of values, and approved change orders to find amounts the contract does not support. Each finding shows the pay application line, the governing term, and the calculation.
Typical leakage
Where the money goes
Pay applications move quickly, and each one carries forward whatever went wrong in the last.
Unapproved change orders
Change order work billed without a signed change order behind it.
Markup above contract
Overhead and profit on change orders that exceed the rates in the contract.
Stored materials not yet payable
Stored materials billed without the documentation or insurance the contract requires.
Schedule of values drift
Line items that no longer reconcile to the schedule of values, or billing that runs ahead of the stated percent complete.
Rates outside the contract
Labor, equipment, or allowance charges that do not follow the contract's rate schedule.
Evidence
What the audit checks
The review connects each pay application to the documents that authorize it.
Contract documents
The prime contract or subcontract, with its retainage, markup, and payment terms.
Schedule of values
The approved schedule of values and any later revisions.
Change orders
Signed change orders and the pricing support attached to them.
Pay applications
Pay applications and continuation sheets, such as AIA G702 and G703 forms, with backup.
Example
What a finding looks like
A finding states what the contract allows at this pay application and what was billed.
| Issue | Calculation | Amount |
|---|---|---|
| Retainage withheld at 5% before the contract's reduction milestone | $840,000 completed this period × (10% − 5%) | $42,000 |
| Change order work billed without a signed change order | One unapproved line item | $27,500 |
| Stored materials billed without required documentation | One stored-materials line item | $38,000 |
| Change order markup of 15% against a contracted 10% | $120,000 cost × (15% − 10%) | $6,000 |
| Total questioned | $113,500 | |
Illustrative example with sample figures, showing how a finding is calculated. Some items, such as retainage, may be timing differences rather than permanent savings.
Common questions
Frequently asked questions
What should you check on a construction pay application?
Check that billed amounts reconcile to the schedule of values, retainage follows the contract, change orders are signed, markups stay within contract rates, and stored materials meet the contract's requirements. AllCaps checks these against your contract documents.
Can software review AIA G702 and G703 pay applications?
Yes. AllCaps reads pay applications and continuation sheets as PDFs or standard exports and checks them against the contract, schedule of values, and change orders you supply.
Does this replace our project accountant or construction manager?
No. AllCaps surfaces evidence-backed exceptions for your team to review, and any external action remains subject to your approval. It does not certify work in place or provide legal advice.
Does this work if we are the contractor billing the owner?
Yes. On the billing side, AllCaps can check draft pay applications against the contract for approved change orders and other amounts you are entitled to bill but have not included.
What do we need to send?
The contract, schedule of values, signed change orders, and pay applications with backup. No integration is required for the Proof Audit.
How is a pay application review priced?
The Proof Audit is a one-time fee scoped and priced to your contracts and pay applications. Ongoing audit is a subscription based on contract and invoice volume.
Start with your own contracts and invoices.
Send up to three contracts and 100 historical invoices. Review evidence-backed findings, then decide what comes next.