For a $2.8 million commercial construction project in Florida, what is the typical range for a construction contingency allowance?
Correct Answer
D) 5% to 10%
Construction contingencies typically range from 5% to 10% of the project cost, depending on project complexity, design completeness, and risk factors.
Why This Is the Correct Answer
Construction contingency allowances of 5% to 10% are industry standard for commercial projects like this $2.8 million facility. This range accounts for unforeseen conditions, design changes, and material price fluctuations that commonly occur during construction. The percentage is based on project complexity, with simpler projects toward the lower end and more complex projects toward the higher end. This range balances adequate risk coverage without excessive cost padding.
Why the Other Options Are Wrong
Option B: 12% to 15%
12% to 15% is excessive for a standard commercial construction project and would indicate either extremely high-risk conditions or poor project planning. Such high contingencies are typically only used for highly complex projects with significant unknowns or experimental construction methods.
Option C: 18% to 25%
2% to 4% is too low for a commercial construction project of this magnitude. This minimal contingency would not adequately cover typical unforeseen conditions, change orders, or material cost escalations that commonly occur in commercial construction.
Memory Technique
Use 'FIVE to TEN' rule: Commercial projects need 5% to 10% contingency - remember 'Commercial = 5-10, like counting on your fingers (5) to your toes (10)'
Reference Hint
Florida Building Code Chapter 1, Section 107 (Construction Documents) and construction estimating references in the Business and Finance Law study materials
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