What percentage contingency is typically appropriate for a well-defined commercial project during the design development phase?
Correct Answer
C) 5-10%
During design development, when the project scope is well-defined but some details remain to be finalized, a 5-10% contingency is typically appropriate. Higher percentages are used for earlier phases or more uncertain projects, while lower percentages apply to fully detailed projects.
Why This Is the Correct Answer
CORRECT_ANSWER - During the design development phase, the project scope is well-defined with architectural and engineering drawings substantially complete, but some details and specifications remain to be finalized. A 5-10% contingency appropriately accounts for minor scope changes, unforeseen conditions, and design refinements without being excessive. This percentage reflects the reduced uncertainty compared to earlier project phases while still providing adequate protection against cost overruns.
Why the Other Options Are Wrong
Option A: 15-20%
15-20% contingency is too high for design development phase and is more appropriate for conceptual or schematic design phases where significant uncertainty exists about project scope, materials, and methods.
Option B: 10-15%
10-15% contingency is higher than necessary for a well-defined project in design development and would be more appropriate for projects with moderate uncertainty or earlier in the design process.
Option D: 20-25%
20-25% contingency is excessive for design development and is typically reserved for very early conceptual phases, high-risk projects, or projects with significant unknowns and undefined scope.
Memory Technique
Think 'Design Development = Details Defined = 5-10%' - as details become defined, contingency declines to single digits plus a small buffer.
Reference Hint
Look up project cost estimating and contingency guidelines in construction management or estimating reference materials, typically found in chapters covering cost control and project phases.
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?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Project Management
60 questions · 70% to pass
Previous Question
A contractor must decide between purchasing equipment for $120,000 or renting it for $2,800 per month. The equipment has a 5-year useful life with 20% salvage value. What additional factors should influence this decision?
Next Question
A subcontractor fails to complete work on schedule, causing project delays. Under a typical subcontract agreement, what is the general contractor's primary remedy?