Construction contingency
A construction contingency is a sum set aside in the budget for costs that are expected to arise but cannot be identified in advance.
Also known as: Contingency allowance · Contingency budget
A contingency is not padding and it is not profit. It is an acknowledgement that on any build of substance, something will be found behind a wall, a rate will move, or a detail will need resolving in a way nobody drew. The figure covers the unknowable, not the unpriced.
The range depends on the work. New construction from complete drawings carries less risk than a renovation to an eighty-year-old building where nothing is certain until it is opened up. Set it against the risk you actually hold rather than a habitual percentage.
Ownership decides behaviour. An owner's contingency is the client's money, released against approved changes. A builder's contingency sits inside the contract price and is consumed silently. Either works; ambiguity about which one is in play does not.
The practical failure is invisibility. Contingency consumed in ones and twos across twenty small decisions is gone before anyone notices, which is an argument for tracking it as its own budget line rather than letting it dissolve across the job.
Run the job, not the paperwork
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