Contingency Explained

What contingency covers

It pays for unforeseen conditions, such as hidden damage behind a wall, an existing panel that does not match the drawings, or a code requirement that appears during review.

It is not a pool for upgrades. If you decide to add a feature, that is a change to scope and should be tracked as one.

How much to hold

The right amount depends on how much is known. A new build on a clear site with complete drawings needs less than a renovation of an older building where much is hidden behind finished surfaces.

Many owners hold a larger amount early in design and release part of it as risks are removed. Ask your contractor to explain where the risk sits in your project, instead of using a flat figure.

Design and construction contingency

Design contingency covers the space between a concept and a finished drawing set. It shrinks as the drawings develop. Construction contingency stays with the owner during the build and is drawn on as conditions are found.

Keeping the two separate makes it clear which is being used and why.

How HSM CM helps reduce surprises

Surveys, scoping of existing electrical and mechanical systems, and early site visits by our own tradespeople reduce what stays hidden. Our Master Electrician and mechanical crews often spot issues in existing systems before pricing is final.

Fewer unknowns mean less contingency is consumed, and any draw is reported plainly with the reason attached.

Agree on the rules early

Before work starts, agree in writing who approves a draw, how it is reported and how fast decisions are made. A delay in approval can cost more than the item itself.

• Record each draw with a reason and a photo where useful.
• Review the balance at every progress meeting.
• Keep owner-requested changes separate from unforeseen conditions.
• Release unused funds at completion.