8.2 AIA G702 & G703 Application and Certificate for Payment

8.2 AIA G702 & G703 Application and Certificate for Payment

The monthly payment application process represents one of the most critical administrative touchpoints during the construction phase. In professional architectural practice and on the ARE 5.0 CE exam, the standardized instruments governing this procedure are AIA Document G702-1992 (Application and Certificate for Payment) and its accompanying continuation sheet, AIA Document G703-1992.

Together, these two companion documents form an integrated accounting and legal framework. G702 summarizes the overarching financial status of the prime contract, calculates current retainage, and records the architect's professional certification. G703 provides the exhaustive, line-item continuation breakdown that supports every dollar claimed on G702. Mastering the mathematical reconciliation and legal boundaries of these forms is essential for construction administration.

---

The Mathematical Architecture of AIA Document G702

The front face of AIA Document G702 contains nine numbered lines that create an unyielding accounting reconciliation. Every ARE candidate must understand the exact formula governing each line:

Step-by-Step Line Analysis

• Line 1: Original Contract Sum: The initial baseline contract price established in AIA Document A101 (Stipulated Sum) or the initial Guaranteed Maximum Price in AIA Document A102 or A133. This figure remains constant throughout the entire life of the project.
• Line 2: Net Change by Change Orders: The net algebraic sum (additions minus deductions) of all fully executed Change Orders (AIA Document G701). On the bottom-left of G702, a Change Order Summary box tracks total additions and deductions approved in previous months and those approved during the current month. Critical Rule: Pending change orders, proposed change orders (PCOs), unresolved claims, and unexecuted Construction Change Directives (CCDs) without an agreed cost cannot be entered on Line 2.
• Line 3: Contract Sum to Date: Calculated strictly as Line 1 ± Line 2. This reflects the official, legally binding contract value at the moment of billing.
• Line 4: Total Completed and Stored to Date: Transferred directly from the grand total of Column G on the continuation sheet (G703). This represents the cumulative monetary value of all physical work installed plus eligible materials currently stored on- or off-site.
• Line 5: Retainage: The contractual percentage withheld from gross billings. Line 5 is typically divided into two distinct components:
  • Line 5a: Retainage on completed work (percentage applied to the sum of G703 Columns D and E).
  • Line 5b: Retainage on stored materials (percentage applied to G703 Column F).
  • Total Retainage: The sum of Line 5a and Line 5b.
• Line 6: Total Earned Less Retainage: Calculated as Line 4 minus Line 5 (Total Retainage). This represents the net cumulative amount the contractor is legally entitled to have received from project inception through the current billing period.
• Line 7: Less Previous Certificates for Payment: The figure entered here must exactly match Line 6 from the immediately preceding Certificate for Payment that was certified by the architect. It reflects what the owner was previously certified to pay, whether or not the owner has physically transferred the cash.
• Line 8: Current Payment Due: Calculated as Line 6 minus Line 7. This is the net dollar amount requested by the contractor—and, if certified without adjustment, the amount the owner must disburse for the current billing cycle.
• Line 9: Balance to Finish, Including Retainage: Calculated as Line 3 minus Line 6. This demonstrates to the owner, architect, and surety exactly how much unbilled and unpaid money remains in the Contract Sum to complete the remaining scope. Notice that Line 9 includes all retained funds, because retainage has not yet been paid out to the contractor.

Columnar Mechanics of AIA Document G703 (Continuation Sheet)

While G702 provides the overarching executive summary, AIA Document G703 contains the detailed itemized breakdown that substantiates Line 4. The columns of G703 are organized sequentially from A through I:

Column-by-Column Breakdown

1. Column A (Item No.): Numerical sequence (e.g., 001, 002, 003) corresponding to the line items of the approved Schedule of Values.
2. Column B (Description of Work): Specific trade, specification section, or work package title (e.g., '04 22 00 - Concrete Unit Masonry - Exterior Walls').
3. Column C (Scheduled Value): The approved dollar allocation for each line item from the Schedule of Values. The sum of Column C must exactly equal G702 Line 3 (Contract Sum to Date). When a Change Order is executed, it is added as a new line item at the bottom of Column C, or incorporated into existing line items.
4. Column D (Work Completed from Previous Applications): Cumulative dollar value of work completed in all prior billing periods. This is populated by taking the sum of Column D + Column E from the preceding month's G703. Crucial Rule: Column D never includes stored materials from prior months; it records only physical work incorporated in place.
5. Column E (Work Completed This Period): The dollar value of physical work installed on site during the current billing period.
6. Column F (Materials Presently Stored): The dollar value of eligible materials currently stored on- or off-site that have not yet been incorporated into the physical structure. If an item was billed in Column F last month and installed this month, it moves into Column E, and Column F is reduced accordingly.
7. Column G (Total Completed and Stored to Date): Calculated as Column D + Column E + Column F. The grand total at the bottom of Column G transfers directly to G702 Line 4.
8. Unlettered percentage column (% Completed): Calculated as Column G ÷ Column C. Indicates the cumulative percentage of completion for that specific line item.
9. Column H (Balance to Finish): Calculated as Column C minus Column G. Indicates the remaining dollar value required to complete that specific work item.

---

Auditing the G702/G703: Common Errors and Double Billing

During payment application review, architects must perform a rigorous arithmetic and procedural audit. Several recurring errors and contractor billing traps frequently arise:

The 'Stored Materials Rollover' Trap (Double Billing)

A common contractor accounting error—either inadvertent or intentional—occurs when materials move from storage to installation.

Example: In Month 2, a contractor delivers $50,000 of structural steel to the jobsite and bills $50,000 in Column F (Materials Presently Stored). In Month 3, the steel is erected. The contractor enters $50,000 into Column E (Work Completed This Period). However, if the contractor fails to reduce Column F back to $0, the total in Column G becomes $100,000 (Col D [\$0] + Col E [\$50,000] + Col F [\$50,000]), resulting in the owner paying twice for the exact same steel!

Line 7 Mismatch

Contractors sometimes manipulate Line 7 (Less Previous Certificates for Payment) by entering the actual cash amount received from the owner rather than the amount certified on Line 6 of the previous certificate. If the owner withheld a portion of the previous certificate due to a dispute or cash-flow constraint, entering the cash received into Line 7 artificially inflates Line 8 (Current Payment Due), transferring an unapproved dispute back onto the current certificate. Line 7 must strictly match Line 6 of the previous architect-certified G702.

Unexecuted Change Orders on Line 2

A contractor may perform work under an emergency field directive or submit a Change Order Proposal (COP) for $45,000. If the contractor adds this $45,000 to Line 2 before the change order is formally executed with signatures by the Owner, Architect, and Contractor, the application must be rejected or modified. Pending proposals do not establish an adjustment. A201 § 7.3.9 separately permits the architect’s interim CCD determination to adjust the contract sum on the same basis as a change order, subject to claims; reconcile any such authorized adjustment and avoid double counting when a later CO records it.

---

Contractor's Sworn Certification and Notarization

Directly beneath the summary lines on AIA Document G702 sits the Contractor's Application for Payment block. This is not merely an invoice; it is a sworn legal affidavit executed under oath.

By signing the G702, the contractor formally certifies to the owner that:

1. The Work covered by this Application for Payment has been completed in accordance with the Contract Documents;
2. All amounts have been paid by the Contractor for Work for which previous Certificates for Payment were issued and payments received from the Owner; and
3. The current payment shown herein is now due.

Mandatory Notarization

AIA Document G702 requires a formal Notary Public seal, signature, and commission expiration date. An unnotarized G702 is legally defective and administratively invalid under standard AIA contract protocols. If a contractor submits an application without a notary acknowledgment, the architect should immediately return it for proper execution while promptly communicating the defect and observing the applicable review obligations.

Column I is the optional variable retainage column. The percentage column between G and H is unlettered. Distinguish G703 H (scheduled value minus completed/stored value, excluding retainage) from G702 Line 9 (contract sum minus earned-less-retainage, including retainage).

AIA G702 Summary Lines & G703 Column Mapping Master Reference

The following table outlines the cross-document mathematical integration between AIA Document G702 and AIA Document G703:

Source and application

A201-2017 official sample; AIA payment-form instructions. Checked October 16, 2026. Apply the cited form edition and the actual project amendments, adopted codes and supplied scenario assumptions. Numerical examples are teaching inputs unless expressly attributed to a requirement.