You win a $75,000 federal contract. Do you wait until the end and bill $75,000? That's how contractors starve. The schedule of values exists so you get paid as work is completed — and the payment rules around it are specific, learnable, and heavily exploited by the contractors who understand them.
What a schedule of values is
Say you're remodeling a ranger residence: strip out the old sheetrock, install insulation, hang and finish new sheetrock, paint. Your lump-sum bid is $75,000. A schedule of values breaks that number into the activities — $15,000 for the strip-out, $20,000 for new sheetrock, $5,000 for tape and float, and so on — so each activity has a dollar value that adds up to the contract total.
Now, when you submit a pay request, you tell the inspector: I did this item, that item, and this item — that's this percent of the contract — I want to be paid this much. Progress payments are typically monthly, on a percentage-completion basis, as determined by the contracting officer.
The payment clock: 14 days versus 30 days
This is where the money is made or lost:
- Progress payments pay fast. Submit your monthly billing and the government pays in about 14 days — you get notice of payment on day 14 and funds in your account the next day.
- Final payment is a 30-day pay. When the job is complete and signed off, that last billing — including any retained percentage — takes about thirty days.
The professional strategy follows directly: bill 98 or 99 percent of the job while work is still technically in progress, so nearly everything rides the 14-day clock. Then submit the final bill — as small as possible — and let the slow 30-day clock apply only to the crumbs. The difference is real cash flow, and on a $100,000 contract it can mean having $98,000 in hand weeks sooner.
Unit pricing works the same way
If you're selling unit-priced work — so many units per month — you bill for what you deliver: deliver a thousand units at a dollar a unit and you bill a thousand dollars that month. The schedule-of-values logic applies to everything: structure your billings so the slow-pay bucket stays tiny.
Protect your subs with the same math
Smart primes tell their subcontractors what to expect: government money arrives on about a 15-day cycle, so subs get paid 16 to 18 days after billing, often within 24 hours of the prime receiving funds. Predictable payment schedules keep good subs loyal — and loyal subs are how you bid more work.
Set it up before you need it
Your schedule of values is usually settled at the pre-construction conference, before work starts. Arrive with it drafted, front-loaded sensibly on early activities — but not absurdly; inspectors notice a $60,000 line item for "mobilization." Balance your early costs (materials, permits) against credibility.