Contingency is an amount added to a construction budget, usually a percentage of the estimated cost, to cover unforeseen work, price rises and small design changes that cannot be priced in advance.
Contingencies of roughly 3% to 10% of project cost are common, with higher figures for renovation work and early-stage estimates, where more is unknown.
Contingency is not a reserve for planned scope. Draw on it only for genuinely unforeseen items and record each use, so the client can see why the budget moved.
ARC PEM computes contingency and GST automatically on each project budget. See all features.
ARC PEM tracks your BOQ, vendor bills, labour attendance, contractor ledgers and GST across every project — live for the whole firm, on any phone or computer.
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