Look up what "escrow" is. When 1/4 million dollars is on the line, you don't take the company's word that they'll pay you afterward, and they don't take your word for it that you'll actually deliver the service.

The idea is that you want a trusted third party because either of the two adversarial parties could screw the other over.

The company could say: we’re going to pay you 125 and you could sue us and spend 60k and two years or just settle for that, after he’s already done the work.

The guy could demand the payment directly to his account and then not deliver, and the firm would be in the same situation.

By depositing the funds in escrow, they’re making sure that the money is there and in the hands of people whose only incentive is to give it to the correct party upon fulfillment of the contract.

With the check held in escrow, it makes cheating harder.

The contractor knows that the money has been paid by the company and won't be withheld after the job is done.

The company knows that the contractor doesn't have the money until the job is done.

It went into an escrow account, presumably until he completed the work