Design Contingency versus Construction Contingency

Design Contingency is used to resolve unforeseen issues during the design period. The design contingency is used when the original budget didn’t address project requirements, potential changes in market prices, and inaccurate project information available when the budget was developed. Its amount will diminish as the design phases progress and the drawings and specifications are developed and refined.

Construction Contingency refers to a percentage of money reserved to cover unanticipated construction costs or delays not identified in the budget or scope of work for the project. Especially in an environment of volatile prices, construction contingencies may be used when material prices suddenly skyrocket.