For a $2,500,000 commercial project in Florida, what is typically the appropriate range for contingency allowance?
Correct Answer
D) 5-10%
For commercial projects, contingency typically ranges from 5-10% depending on project complexity, site conditions, and level of design completion. This covers unforeseen conditions and minor scope changes.
Why This Is the Correct Answer
The 5-10% contingency range is industry standard for commercial projects because it provides adequate coverage for unforeseen conditions, minor design changes, and construction uncertainties without being excessive. This percentage accounts for the complexity of commercial work while maintaining competitive pricing. For a $2.5M project, this translates to $125,000-$250,000, which is reasonable for handling typical construction contingencies. The range allows flexibility based on project risk factors such as site conditions, design completeness, and project complexity.
Why the Other Options Are Wrong
Option A: 1-3%
15-20% is excessive for typical commercial projects and would make bids uncompetitive; this high percentage might only be justified for highly complex projects with significant unknowns or experimental construction methods.
Option B: 15-20%
1-3% is too low for commercial projects and would only be appropriate for very simple residential work or projects with extremely detailed plans and minimal risk factors.
Memory Technique
Think 'Commercial = 5-10' - the word 'Commercial' has 10 letters, helping you remember the upper limit of the range.
Reference Hint
Look up contingency allowances in the project estimating or cost control sections of construction management references, typically found in chapters covering project budgeting and risk management.
More Contract Admin Questions
A project experiences a 30-day delay due to unusually severe weather. The contract includes a liquidated damages clause of $1,000 per day for delays. If the weather delay is excusable but not compensable, what liquidated damages apply?
A commercial project requires a total of 12 inspections. The building department charges $85 per inspection for the first 5 inspections, $65 for inspections 6-10, and $45 for any additional inspections. What is the total inspection fee?
What document must be posted at the job site before a Certificate of Occupancy can be issued for a commercial building?
A mixed-use development requires a variance for reduced setbacks. The property is located within 500 feet of a hospital. What additional consideration must be addressed?
A LEED project requires tracking of regional materials. Materials are considered regional if they are extracted, harvested, or recovered, as well as manufactured within what distance of the project site?
An indemnification clause in a construction contract typically requires the contractor to:
A property owner wants to convert a single-family home into a duplex in an area zoned for single-family residential use. The conversion meets all building codes but violates density requirements. What approval is needed?
As-built drawings are typically required to be submitted:
AIA Document A401 is primarily used for:
A general contractor is building a 12,000 square foot commercial warehouse. The building permit fee is calculated at $8.50 per $1,000 of construction value. If the project value is $2,400,000, what is the building permit fee?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
A general contractor discovers that the architectural drawings show a conflict between the structural and mechanical plans that will require additional work. The contractor should first:
Next Question
Which document is required before a new commercial building can be legally occupied by tenants?