What is the recommended contingency percentage for renovation work compared to new construction?
Correct Answer
C) Higher for renovation work
Renovation work typically requires higher contingency percentages due to unknown existing conditions, potential hazardous materials, and integration challenges with existing systems.
Why This Is the Correct Answer
Renovation work requires higher contingency percentages because contractors encounter numerous unforeseen conditions when working with existing structures. Hidden structural issues, outdated electrical or plumbing systems, asbestos or lead paint, and the challenge of integrating new work with existing systems create significant cost uncertainty. While new construction typically uses 5-10% contingency, renovation projects often require 15-25% or higher contingencies to account for these unknown variables.
Why the Other Options Are Wrong
Option A: Same percentage for both
Lower contingency for renovation work would be financially irresponsible, as renovation projects consistently present more surprises and unforeseen conditions that require additional time and materials to address.
Option B: Lower for renovation work
Contingency is especially critical for renovation work due to the high likelihood of encountering unexpected conditions, making this option completely incorrect and potentially financially disastrous.
Memory Technique
Think 'R.I.P.' for Renovation: Renovation = Increased Problems = higher contingency Percentage
Reference Hint
Look up project estimating and cost control sections, typically found in construction management or estimating chapters of contractor reference materials.
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