CIVIL CONTRACTORS ON PUBLIC PROJECTS: 60 TO 90 DAY PAY CYCLES.
Government and municipal contracts pay slowly — often 60 to 90 days from mobilization to first payment. Civil contractors mobilize crews and equipment on day one, front-load material and labor costs for weeks, and don't see the first check until the GC's draw request is approved and processed through the owner's pay cycle. Without a cash plan built specifically around public project timing, that gap runs your company into a cash deficit on work that's completely profitable.
Public project work is real money. State DOT, municipal utilities, county road work, federal infrastructure — these are good contracts with legitimate owners who always pay. The problem is the timeline. This page covers exactly how to plan cash flow when your biggest contracts have the longest payment cycles.
THE PAY CYCLE IS LONGER THAN YOUR CASH CAN HANDLE.
On a private commercial job, the GC gets paid by the owner and passes payment through within 30–45 days. On a public project — municipal, state, or federal — the approval chain is longer: the GC submits to the project inspector, the inspector approves to the agency engineer, the engineer approves to the owner's accounting, accounting processes through government pay cycles. That can be 60, 75, 90 days or more from when you did the work.
Meanwhile, your costs don't wait. Payroll hits every week. Equipment is on site burning fuel and depreciation. Material has already been purchased. You've committed real dollars on day one for work that won't pay out until month two or three.
Mobilize Day 1. Bill at the End of Month 1. Get Paid at End of Month 2 or 3.
You mobilize equipment, stage material, and put crews on site starting day one. You submit your first pay app at the end of month one. The GC submits their draw request. The owner approves it — often in a scheduled board meeting or finance committee cycle, not on demand. Payment is released. By the time that check arrives, you've funded 60–90 days of direct project cost out of your own cash or line of credit. On a $600K mobilization, that's $600K your company floated for three months.
Your LOC Was Sized for Private Work — Not Government Work
Most civil contractors sized their line of credit when their book was primarily private GC work with 30–45 day pay cycles. When public project work grows to 30–50% of the backlog, the working capital requirement increases significantly — but the LOC limit doesn't automatically adjust. The result: a credit facility that worked fine for private work gets exhausted halfway through a public project with six weeks of costs still to fund before the first check arrives.
Multiple Public Projects Running Simultaneously Multiply the Cash Gap
A single public project with a 90-day pay cycle is manageable with proper planning. Two or three running simultaneously — each at different phases of their respective pay cycles — can stack the cash requirement to a level that exceeds any reasonable LOC. Civil contractors who grow their public work book without adjusting their cash planning often hit a wall not because the work is unprofitable but because three simultaneous gaps overwhelm the available capital.
CASH FLOW PLANNING FOR GOVERNMENT WORK.
The solution isn't to avoid public project work — it's to plan cash flow specifically around its payment structure. Here's what that looks like:
HOW WE BUILD THIS INTO THE OPERATING MODEL.
C.F.O.S cash planning for civil contractors doing public work includes:
A $6.7M civil contractor came to us with a LOC maxed out on government work that was completely profitable. The projects weren't the problem — the 90-day pay cycles combined with an LOC sized for private work were. Collections, billing restructuring, and a new LOC sized for the public project book fixed it in 60 days.
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