A pay application in construction, which is submitted periodically during a project (and even possibly before or after the project depending upon the circumstances), is a combination of documentation that illustrates what construction work took place and sets forth the amount being billed for the construction work.
While pay applications can vary depending on the type of project, the information that is normally included is:
- Project name;
- Number of the specific pay application;
- Name of the property owner, architect and contractor;
- Dates covered in pay application;
- Change orders;
- Original contract amount;
- The total value of work completed to date;
- The total amount of previous payments;
- Current amount due; and
- The total balance remaining for the project.
A pay application can include various documents depending on the project; however, most include a schedule of values, photographs, daily reports, invoices, payroll reports, and lien waivers.
To assure proper and timely payment of a pay application, a contractor and/or subcontractor should do the following:
- Submit the pay application on a timely basis and in accordance with any applicable deadlines set forth in the contract documents;
- Assure that all information and documents submitted as part of the pay application is true and correct; and
- Provide ample support (through documentation and/or photographs) of the construction work performed, and the amounts owed for the construction work.
As with all aspects of construction, when it comes to pay applications, it is vital to comply with all requirements and deadlines set forth in the applicable contract documents.