An owner has agreed to make periodic payments to the contractor during the construction period. These payments are known as what?

The correct answer is progress payments. These are payments made to the contractor at various stages of the construction project, typically aligning with the completion of certain milestones or phases of work. Progress payments serve to ensure that the contractor has cash flow throughout the duration of the project, allowing them to pay for labor, materials, and other expenses as the work progresses. This type of payment structure is essential in construction projects because it helps to mitigate financial risk for the contractor while also keeping the project moving forward.

Other options, while related to construction financing, do not describe periodic payments made during the construction phase. Bond performance refers to a type of surety bond that guarantees a contractor will fulfill their obligations as per the contract but is unrelated to payment structures. Retainage is a portion of the payment withheld until the project is fully completed to ensure that the contractor finishes the work satisfactorily, rather than being a periodic payment. An allowance is a predetermined sum included in a contract for specific items or work, but it doesn't reflect the ongoing payments made during construction.