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 B: 10-15%
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.
Option D: 20-25%
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.
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.
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