Mobilization and Demobilization Billing.
Mobilization is the cost to move crews, equipment, and temporary facilities onto a jobsite before production starts. Demobilization is removing them at closeout. It is billed as a separate schedule-of-values line, usually 3 to 10 percent of contract value, on the first pay application. Front-load it so you are not financing the general contractor on day one.
If you are billing mobilization wrong, you are financing the general contractor's project startup with your own cash. This page covers what mobilization and demobilization cost on a commercial or civil job, how to put them on the schedule of values, and how to bill them so the job funds its own start.
Mobilization And Demobilization, Defined.
Mobilization is the cost to move crews, equipment, and temporary facilities onto a jobsite and set up before production begins; demobilization is the cost to remove all of it at closeout. These are real costs you pay before and after the productive work, not overhead and not markup.
Mobilization covers hauling equipment to the site, setting up the job trailer and connex storage, running temporary power and water, installing erosion control and site fencing, and staging the first materials. Demobilization covers tearing all of that down, hauling equipment back, final cleanup, and site restoration. On most commercial and civil jobs both are billed as their own schedule-of-values line items rather than spread into unit prices.
The 3 To 10 Percent Range.
Mobilization is typically billed at 3 to 10 percent of contract value, so a $600K civil job carries an $18K to $60K mobilization line. Larger jobs sit at the lower end of that range because the fixed setup cost spreads over more revenue. Smaller jobs sit at the higher end for the same reason in reverse.
On DOT and federal work the owner often caps mobilization at 5 to 10 percent and makes you justify the number, so the line has to be defensible, not padded. On private commercial work you have more room to front-load the schedule of values, and that is where the cash advantage lives. Demobilization is smaller, commonly a third of the mobilization figure, and it is billed at closeout.
Put It On Pay Application One.
Three rules cover it. Give mobilization its own schedule-of-values line. Bill that full line on the first pay application, before production billing starts. Put demobilization on a separate line and bill it at closeout.
This front-loads the cash so the job funds its own startup instead of draining your line of credit. Burying mobilization in unit prices is the common mistake, because it forces you to pay to mobilize out of pocket and recover it slowly across the job. The calculator below shows the difference in dollars.
Size Your Mobilization Line
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Funded. A $42K mobilization line covers your $30K actual cost and starts the job $12K ahead instead of out of pocket.
A planning estimate. Public and DOT jobs may define mobilization as a specific capped pay item with earn-down rules. The demobilization figure is a rule-of-thumb suggestion at one third of the mobilization line. Confirm against your contract and owner specifications.
This Is A Cash Flow Decision.
Mobilization is cash out of your account in week one, before you have billed a dollar of production. If you do not bill it up front, you finance the general contractor's project startup with your own working capital. On a thin-margin trade that is the difference between a job that funds itself and a job that pulls from the next one.
The visibility matters as much as the billing. A $7.1M civil contractor found $779K on the balance sheet within three months once equipment and mobilization costs were tracked and billed instead of buried. Civil subcontractors at $1M to $5M net 5.5 percent, so a mobilization line billed wrong can erase the margin on the whole job. The Construction CFO builds the schedule of values and the job costing so the cost you incur and the cost you bill finally match.
