Schedule of Values
An itemized breakdown of the total contract price by task or category, like framing, electrical, drywall, and so on, that becomes the basis for calculating how much a contractor has earned and can bill for as the project progresses.
Why it matters
Without it, there's no fair way to answer "how much of the $2 million contract has actually been earned so far?" The schedule of values turns one lump-sum number into something that can be billed against monthly, tied to real, verifiable progress.
On a real project
A general contractor breaks a $3 million contract into line items: $400,000 for concrete, $250,000 for electrical, and so on, and each month's payment application shows the percentage complete for each individual line, not just one overall number.
Who this matters most to
A Project Manager builds and maintains the schedule of values, since it's what every monthly payment application is measured against. An Estimator is often the one who originally breaks the contract price into those line items, since it grows naturally out of how the job was estimated in the first place.
Where this goes wrong
A contractor front-loads the schedule of values, assigning more value to early line items like mobilization and site work than they actually cost, to get paid faster early in the project. It works until the final line items come due, and there isn't enough contract value left assigned to them to actually cover the cost of finishing that work, forcing the contractor to finance the last stretch of the job out of pocket.