To put it another way, with a contingency fee, paying for your lawyer's services depends on you receiving some amount of compensation. Your lawyer will take an agreed percentage of your recovery. Home builders and remodelers typically allocate between 5% and 10% of a project budget for a construction contingency. This amount creates enough space for unexpected expenses.
Anyone who keeps track of estimates and costs manually calculates a contingency percentage on all costs, before profit margins are applied. Whether made on paper or calculated by hand, these methods offer familiar and accessible estimation options that put budgets and proposals in the hands of customers. However, any price negotiation or recalculation requires careful monitoring and risks human error. This contingency is usually calculated as a percentage.
If the phase is 100 days of effort, the 20% contingency would be another 20 days. As the project progresses, the level of risk decreases as the requirements and problems are known, so the percentage will be reduced. In the closing phase, the percentage added could be as low as 5% or none. A construction contingency is the amount of money allocated to pay additional or unexpected costs during the construction project.
Usually, a calculation of 5 to 10% of the construction budget should be allocated to your construction contingency.
