Front-loaded costs
The term ‘front-loaded’ refers to costs that are applied disproportionately to elements of the work that take place early on during a project or part of a project.
Suppliers may front-load costs (or prices in bids) in order to maximise their revenue early in a project by assigning overstated values to the preliminary elements of the work. For example, a contractor might front-load costs for preliminary construction work such as services diversions, demolition, setting out, groundworks, piling, and so on.
Front-loading costs can help reduce a supplier's risk on a project, by improving their cash flow and ensuring that maximum payments are received on projects that might not proceed to completion. However, making payments in excess of the value of work completed puts the client under greater financial pressure early in the project and also at greater risk if the project does not proceed, or if a supplier becomes insolvent or has to be replaced. It can also act as a disincentive for suppliers to keep to time schedules, as they may have already completed the most profitable parts of the works.
Front loading can be avoided by detailed cost planning and cash flow projection during the design development and tender stages of a project, giving the client a clear idea of how much they should be expected to pay at different stages. Tender assessment should then allow comparisons to be made between competing bids to determine whether individual tenderers have submitted excessive prices for certain aspects or stages of the works. During the construction phase, there should be careful assessment of applications for payment to ensure that the amounts paid do not exceed the value of the works completed.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Moisture, fire safety and emerging trends in living walls
How wet is your wall?
Current policy explained and newly published consultation by the UK and Welsh Governments.
British architecture 1919–39. Book review.
Conservation of listed prefabs in Moseley.
Energy industry calls for urgent reform.
Heritage staff wellbeing at work survey.
A five minute introduction.
50th Golden anniversary ECA Edmundson apprentice award
Showcasing the very best electrotechnical and engineering services for half a century.
Welsh government consults on HRBs and reg changes
Seeking feedback on a new regulatory regime and a broad range of issues.
CIOB Client Guide (2nd edition) March 2025
Free download covering statutory dutyholder roles under the Building Safety Act and much more.
AI and automation in 3D modelling and spatial design
Can almost half of design development tasks be automated?
Minister quizzed, as responsibility transfers to MHCLG and BSR publishes new building control guidance.
UK environmental regulations reform 2025
Amid wider new approaches to ensure regulators and regulation support growth.
The maintenance challenge of tenements.
BSRIA Statutory Compliance Inspection Checklist
BG80/2025 now significantly updated to include requirements related to important changes in legislation.
Shortlist for the 2025 Roofscape Design Awards
Talent and innovation showcase announcement from the trussed rafter industry.
OpenUSD possibilities: Look before you leap
Being ready for the OpenUSD solutions set to transform architecture and design.
Global Asbestos Awareness Week 2025
Highlighting the continuing threat to trades persons.
Retrofit of Buildings, a CIOB Technical Publication
Now available in Arabic and Chinese as well as English.