01 20 00 Price and Payment Procedures

01 20 00 Price and Payment Procedures

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01 20 00 Price and Payment Procedures

Use this this CSI 3 part SimpleSpecs™ master specification to specify 01 20 00 price and payment procedures for allowances, unit prices, alternates, and substitution procedures.



Cash allowances are included when a specific product has not been chosen at the time of bidding, for example carpet or wall covering. The amount of the allowance is included in the Contract Sum, and the Contract Sum is adjusted by Change Order once a product is selected.


A contingency allowance is included when there may be a change in the Work due to unforeseen conditions and when the design for some portion of the Work has not been completed.


Alternates: Alternate Bids provide a stipulated sum that will be added to or deducted from the Base Bid amount if specific portions of the Work are modified.



Substitution Considerations

Who will receive and consider substitution requests? Will it be the Owner, Design Professional, Construction or Project Manager, or Design/Builder?


What is the deadline for submittal of Substitution requests? 10 to 14 days prior to receipt of bids, or within 30, 45 or 60 days after award of contract?


Who may submit substitution requests? Will they be received from the Contractor or Construction Manager only, or will Subcontractors and suppliers be allowed to submit them?


What is the notification process for approved substitutions? By Addenda, Change Order or Supplemental


Is there a formal substitution request form?


A Schedule of Values provides a detailed breakdown of the Contract Sum for use in reviewing and approving the Contractor’s or Construction Manager’s monthly Applications for Payment.


An Application for Payment is the Contractor’s or Construction Manager’s request to be paid a portion of the Contract Sum based on their percent of completion to date.


Some Owners will require additional documentation along with each Application for Payment, such as a release of liens from the Contractor or Construction Manager and/or subcontractors and suppliers.


To learn more about specifying product substitution requirements, visit our recent blog post.


Related References:

AIA G702 Application and Certificate for Payment

AIA G703 Continuation Sheet for Cost of the Work Projects


Related SimpleSpecs™ master specification:

01 20 00 – Price and Payment Procedures (Design/Build)


Price and Payment Procedures

The SimpleSpecs™ master specs concept
Adding More Words Does Not Make Specifications More Enforceable.    
Design professionals are accustomed to seeing lengthy project specifications, so why is SimpleSpecs™ so short?
Specifications have grown evermore wordy over the years for several reasons:
  1. The mistaken belief that specifications must be lengthy and legal-sounding to be enforceable.  In fact, quite the opposite is true.  Having shorter, easily understood specifications makes us less likely to have problems in the field.
  2. A belief that having lots of words protects us from a Contactor making mistakes.  There is no way to include enough statements to protect yourself from a bad contractor, regardless of the length of your specification.
  3. Our desire to be in control of the project by specifying means and methods instead of including simple, enforceable statements.
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