Contingency
Contingency is a buffer amount (a percentage of cost) added to an estimate to cover the unknowns that show up on almost every job.
Contingency isn't padding — it's a realistic allowance for conditions you can't fully predict at bid time. Burying it instead of pricing it is how unforeseen costs turn into lost margin.
Related terms
- Allowance — An allowance is a placeholder dollar amount in an estimate for a selection the client hasn't finalized — like tile, fixtures, or appliances.
- Markup — Markup is profit measured against your cost — the percentage you add on top of cost to get your price.
- Change order — A change order is a written modification to the original contract scope or price — added work, a selection upgrade, or a condition discovered on site.