Construction · Defined
Construction contingency
A budget allowance reserved for defined uncertainties or unforeseen construction costs. Its intended use and approval process depend on the project’s financing and contract documents.
Why it matters
Owner contingency and contractor contingency may be separate amounts serving different purposes. A contingency balance is not automatically available for every overrun, and spending it does not necessarily increase the project’s overall funding. Track commitments as well as amounts already paid.
In practice
A project example
A project shows an unused contingency, but several pending changes may already consume much of it. Reporting only the unspent balance would miss that exposure.
General educational guidance from KOW Building Consultants. Examples are illustrative, not project records. The applicable contract, standard, program, and jurisdiction control the requirements for a specific assignment.