Price and Payment Procedures


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8.5" x 11"
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01 20 00
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Price and Payment Procedures

Use this 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 specification template:

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



Price and Payment Procedures

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