A contractor is estimating a project with a base cost of $2.4 million. What is the recommended contingency percentage for a design-build project in the early design phase?
Correct Answer
B) 10-20%
Design-build projects in early design phases typically require 10-20% contingency due to incomplete design information and potential scope changes as the design develops.
Why This Is the Correct Answer
Design-build projects in the early design phase require higher contingency percentages (10-20%) because the design is incomplete and evolving. Unlike traditional design-bid-build projects where designs are finalized before construction begins, design-build projects start construction while design is still developing. This creates uncertainty in scope, materials, and methods that must be accounted for with adequate contingency reserves. The 10-20% range provides sufficient buffer for design changes, unforeseen conditions, and scope modifications that commonly occur during the design development process.
Why the Other Options Are Wrong
Option C: 20-30%
5-10% contingency is still insufficient for design-build projects in early design phases, as this range would be more suitable for projects with partially developed designs or later design phases where scope is better defined.
Option D: 2-5%
2-5% contingency is too low for early design phase work and would be more appropriate for projects with completed designs and well-defined scope, such as traditional design-bid-build projects in the construction phase.
Memory Technique
Think 'Early Design = Double Digits' - early design phase design-build projects need double-digit contingency percentages (10-20%) due to design uncertainty.
Reference Hint
Look up project estimating and contingency planning sections in construction management references, typically found in chapters covering cost estimating or risk management.
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