Contingencies are an essential aspect of client contracts. It’s a part of a project's budget put aside to cover any unforeseen costs, risks, events, or changes in scope that may affect the project's cost over the course of its life. Here's how they work:

  • Setting Up Contingencies: GCs can opt to add contingencies to a contract. This choice is reflected in the "Do you want to add Contingencies?" field.

  • Configuration Options: When setting up contingencies, GCs can choose between percentage or fixed amount values. This provides flexibility in deciding the contingency amount.

  • Contract Amount Adjustment: If a contingency is added, the "Original Contract Amount" is adjusted to include the contingency value. 

  • Billing Schedule Calculation: Billing Schedule does NOT consider contingency for SOV calculations. 

  • Payment Ledger: Contingency amounts are not included in the Payment Ledger. Contingencies serve as a buffer, reserved for unforeseen circumstances or change orders.

  • Contingency Usage: Contingency amounts are only consumed when designated as the funding source for a change order. This ensures they are available for unexpected situations.

In summary, contingencies allow GCs to prepare for uncertainties in client contracts, without impacting payment schedules or financial records.

Last Updated: Dec-11-23