What is a mobilization fee in construction?

Mobilization fees appear as a line item on the Schedule of Values and are typically billed as part of the first progress payment. The amount varies widely — anywhere from 5% to 15% of the contract price is common on large commercial projects. On smaller residential jobs, mobilization costs are usually folded into the first milestone payment rather than itemized separately.

A mobilization fee is not a deposit in the traditional sense. It is meant to cover specific, identifiable start-up costs, not to give either party leverage. If a project is cancelled before work starts, the mobilization fee is generally refundable only to the extent that the contractor has not yet incurred the costs it was meant to cover. Contract language on this point matters, and disputes about refundability are common. This is general information, not legal advice.