Everything You Need To Know About Contingency

When planning for a construction project, one of the most important – and often overlooked – elements is contingency. If you’re not familiar with the term, contingency refers to the money set aside in the project budget to cover unexpected costs or unforeseen issues that may arise during construction. At Dunlap Construction, we believe in being transparent about the importance of contingency so that you can plan your project with confidence and avoid surprises down the road.

What Does Contingency Cover?

Contingency funds are there for when things don’t go as planned. Construction projects are full of variables, and even the best plans can hit a few bumps along the way. Some common reasons for needing it include:

• Unforeseen Site Conditions – Sometimes, when digging or working on-site, we discover problems like underground obstacles, unexpected soil conditions, or environmental issues that weren’t visible during the initial assessment.
• Design Changes – Whether you decide to change a design feature or add new elements to your project, these adjustments can affect the cost. Having these funds available allows you to make these decisions without stalling the project.
• Material Price Fluctuations – The cost of materials can vary throughout the course of the project due to market shifts, availability, or supply chain delays. Contingency funds help cover the gap if prices go up unexpectedly.
• Delays – Sometimes, weather, labor shortages, or other external factors can cause delays. These delays may result in additional costs for labor or equipment rental, which is where contingency can help.

How to Plan for Contingency

Planning for contingency starts with understanding your project’s scope and potential risks. At Dunlap Construction, we work closely with our clients to help them estimate the appropriate amount for their specific project. Typically, it’s around 5-10% of the total project cost, but this can vary depending on the project’s complexity, location, and other factors.

While it’s essential to have these funds set aside, it’s equally important to manage them carefully. Only use them for legitimate, unforeseen issues. That way, you ensure your budget stays on track while having the flexibility to address the unexpected. If you have questions about contingency planning for your next project, feel free to reach out to us – we’re here to help you build with confidence.

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