Documentation
This 3-part form is the standard industry document used to apply for payment.
What is the AIA Pay Application (G702/G703)?
This is the typical time window (in days) for a lender to review and approve a draw.
What is 5–7 days?
This federal act requires specific "prevailing wage" reporting for many projects.
What is the Davis-Bacon Act?
This action occurs when a PM bills for more work than has actually been completed in the field.
What is Over-billing?
This term describes the percentage of the contract sum that is withheld until final completion to ensure quality.
What is Retainage?
This document, when signed, proves that a subcontractor has been paid for their work and waives their right to place a lien on the property.
What is a Lien Waiver?
This step is triggered the moment a draw package is submitted to the lender.
What is ordering the Draw Inspection?
This should specifically NOT be included in the subcontract price in both Arizona and Mississippi (two states with active Wilshire projects).
What is Sales Tax?
A draw is "frozen" if this type of document for a subcontractor is expired.
What is an Insurance Certificate?
This is the document needed to legally change the contract price or scope.
What is a change order?
This is the detailed budget breakdown that acts as the roadmap for the entire project's expenses.
What is the Schedule of Values (SOV)?
This is the key site visit that must occur before the lender releases funds.
What is an Onsite Inspection - Draw Walk?
This requires recipients of HUD funding to direct employment, training, and contracting opportunities to low-income individuals and the businesses that employ these persons within their community.
What is Section 3?
This is the result of submitting a draw package without owner sign-off.
What is a Rejection/Delay?
This report verifies field progress matches the requested funds.
What is an Inspection Report?
This is the usual frequency of the construction draw process.
What is Monthly?
This financial reserve is kept to cover unexpected costs without delaying the draw.
What is a Contingency?
This happens when a change order is billed before it is legally executed.
What is a Billing Discrepancy/Audit Flag?
These five items typically make up a standard "Draw Package."
What are Invoices, Waivers, SOV, Change Orders, and Photos?
If a draw is submitted late or missing documentation, this is the most likely consequence for the construction schedule.
What is a delay in funding (and project slowdown)?
This type of documentation is required to ensure that local or minority-owned businesses are being used, a common requirement in affordable housing funding.
What is MWBE (Minority and Women-Owned Business Enterprise) reporting?
This occurs when the actual costs of work exceed the budget line item for that task.
What is a Cost Overrun?
These types of funds are usually exhausted first before a loan starts its draw.
What is Project Equity?