Rule book
Nine tests. Each one is arithmetic you can check by hand.
A pay application review is only useful if the contractor can be shown exactly why an amount was reduced. Every test below compares two figures that both exist in the record, and reports the difference. There is no scoring, no estimate, and no model.
Front loading moves the contractor's risk onto the owner. If the contractor leaves the job, the remaining money will not buy the remaining work, and that gap is only visible before it is paid.
Remedy Reduce the certification to observed progress and require a revised schedule of values for the remaining lines.
Paying against a pending change order concedes the change order. The owner loses the ability to negotiate the price after the work has been paid for.
Remedy Hold the amount above the approved value until the change order is executed, and note the position in the certification.
The same invoice appears as backup on two draws for the same amount. Either the material was billed twice or the backup is wrong, and both need answering before payment.
Remedy Withhold the duplicated amount and require the contractor to identify which application the invoice supports.
A schedule-of-values line cannot be worth more than its scheduled value plus the approved change orders against it. Anything above that is money claimed for scope that has not been priced or approved.
Remedy Reject the line back to its adjusted value and require the contractor to submit the difference as a change order.
Retainage is the owner's only remaining leverage at closeout. Under-withholding gives it away quietly, one draw at a time, and it is almost never noticed until the punch list stalls.
Remedy Correct the withholding on this application and reconcile every prior application in the same certification.
Stored materials are paid for before they are installed, so the only protection is proof the material exists, is paid for, and is titled to the project.
Remedy Require the supplier invoice, a bill of sale, and evidence of insured off-site storage before releasing the stored materials amount.
The contract does not permit billing for materials before installation. Paying anyway waives a term the owner negotiated.
Remedy Remove the stored materials line from the application and pay installed work only.
Payment without an unconditional waiver leaves the owner exposed to a lien for work already paid for. It is the single most common way an owner pays twice.
Remedy Obtain the unconditional waiver for the paid amount before releasing the next application.
A cumulative figure that falls means an earlier application overstated progress, or the schedule of values has been quietly re-cut between draws. Either one changes what was already paid.
Remedy Require a written reconciliation of the prior application before certifying this one.