Pay application automation AI: verify subcontractor billing

Yes. A pay application can be checked against an independent measure of progress instead of the subcontractor's own percentage: the quantity each line covers, taken off the drawings, against the quantity your field records show in place. Software can run that comparison on every line and flag the lines billed ahead of measured progress before payment is approved. Mirage Metrics builds this as an AI agent on your own documents: it ties each schedule of values line to its quantities and their source sheets, reads the period's progress records, and sends the lines that do not reconcile to the project manager, who still approves the payment.

See AIA G702 pay application software: pay applications built from progress data, every line traced to its source.

Why a self-reported percentage is hard to check

Most lump-sum subcontracts bill on a schedule of values laid out like the AIA G703 continuation sheet: for each line, the scheduled value, the work completed on previous applications and this period, the materials presently stored, the total completed and stored to date, the percentage complete, the balance to finish and the retainage. The percentage on each line is the subcontractor's own estimate of value earned.

The reviewer usually checks it against a site walk, photos or the superintendent's view. That works for a line with a visible end point. It fails on lines that cover a large scope: when concrete foundations are billed at 60 percent, nothing on the form says which footings, walls and slabs that 60 percent stands for. Billing ahead of the work, often by giving the early lines of the schedule more value than they carry, improves the subcontractor's cash flow and stays hard to see until the last lines are billed.

What measured progress means

Measured progress replaces the estimate with two quantities per line:

• The contract quantity, taken off the drawings: cubic yards of concrete in the footings on sheet S-101, linear feet of water main on sheet C-401, tons of structural steel by level.
• The installed quantity, from the records the job already keeps: daily reports, pour logs, delivery tickets, inspection reports, survey and as-built markups.

The measured percentage is the installed quantity over the contract quantity. A line billed at 60 percent with 40 percent of its quantity recorded in place is a question for the subcontractor, with the documents on both sides attached. Lines that no quantity measures, such as mobilization, general conditions or an allowance, keep the rule the subcontract sets for them: a milestone, a share per month, or payment on completion.

How the cross-check runs, line by line

1. Map each schedule of values line to the quantities that make it up, with the drawing sheet each one comes from.
2. Take off the contract quantity of each line, so every figure links to its sheet.
3. Read the period's progress records and add up the installed quantity per line.
4. Compare, line by line: billed percentage against measured percentage, this period's billing against the change in measured quantity, the total to date against the scheduled value.
5. Run the checks that need no measurement: the arithmetic of the continuation sheet, last period's figures carried forward unchanged, retainage at the contract rate, change order work billed only against executed change orders, stored materials backed by an invoice or a delivery ticket.
6. Send each exception to the project manager with the line, the gap and the documents behind both figures. The project manager approves, adjusts or asks the subcontractor.

Unit-price contracts: the check is built into the contract

On unit-price contracts, common in heavy civil, highway and public works, payment is already quantity times price. Each bid item has a unit and a unit price, each pay estimate pays the quantity measured that period, and the owner's specifications say how each item is measured and paid.

The question there is whether each quantity billed is supported. The quantity this period should match the field measurement records: the inspector's daily records, load tickets, survey. The quantity to date is compared with the bid quantity: an item that runs past it is not an error, but most contracts have a variation in quantities clause that says when its unit price can be renegotiated, so it is worth seeing early.

See the schedule of values template: its Unit price sheet keeps the source of each quantity billed and marks the items over their contract quantity. For the wider picture on these contracts, see AI for heavy civil and infrastructure contractors.

What to look for in a platform

Whatever tool you look at, five questions sort them:

• Does it measure progress from drawings and field records, or does it read the subcontractor's percentage and check only the arithmetic?
• Can every flagged line be traced to the drawing sheet and the field record behind it?
• Does it treat lump-sum lines and unit-price items differently?
• Does a person approve the payment, with the tool preparing the decision?
• Does it read the documents where they already are: your project management system, a shared drive, email attachments?

What the check needs from you

• The subcontract and its schedule of values, as a spreadsheet, a PDF or from Procore, Sage or Autodesk Build.
• The contract drawings, for the takeoff.
• The progress records you already keep. If installed quantities are written down nowhere, start there: a daily report that records the quantities placed gives the check something to compare against.
• Your rules: retainage rates, what counts as stored material, how lump-sum lines are earned.

Where Mirage stands

Mirage Metrics builds AIA G702/G703 pay applications from the schedule of values and the progress records, each line traced to its source, and flags what does not reconcile before submission. No client running pay application review through Mirage is published yet. The nearest published deployment is OCBM: three agents in production on takeoff, pricing and document consistency, with 100 percent of quantities traceable to a source drawing, which is the measurement this check rests on. A reply comes within two business hours, a proof of concept one week after the first meeting, and the first workflow reaches production in 4 to 6 weeks.

When it is not worth it

• Small subcontracts with a handful of lines that a site walk checks quickly.
• Schedules made mostly of lines no quantity measures.
• Jobs where installed quantities are recorded nowhere: the check has nothing to compare against until they are.

Procurement and billing sit on either end of the same workflow. See how AI for construction procurement speeds up the sub-bid side.

Related articles

AI in Construction: The Complete Guide for General Contractors and Civil Engineering Firms in 2026

Subcontractor Management with AI: Tracking Progress, Pay Apps, and Compliance Without the Back-and-Forth

See how Mirage's AIA G702/G703 pay application automation works end to end, including a sample output.