Business FinancesQuestion 334 of 1605
A schedule of values that allocates more value to early line items than the work actually justifies is sometimes called "front-loading." From the owner's perspective, the risk of front-loading is that:
a.The contractor will finish the job too quickly
b.The contractor may be overpaid early relative to work completed, weakening the owner's security
c.The owner will pay less retention than required
d.Overhead costs will be eliminated
Explanation
Front-loading shifts contract value to early activities so the contractor collects more cash up front than the completed work warrants. This leaves the owner under-secured if the contractor later fails to finish.
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