When should a design allowance typically be used in a construction estimate?
Correct Answer
C) When specific materials or finishes have not been selected by the owner
Design allowances are used when the owner hasn't made final selections for items like fixtures, finishes, or equipment. This allows the project to proceed while maintaining budget control for unspecified items.
Why This Is the Correct Answer
Design allowances are specifically used when the owner has not yet made final decisions on materials, fixtures, finishes, or equipment. This allows the contractor to include a reasonable budget placeholder in the estimate so the project can move forward with bidding and contracting. The allowance provides cost control by establishing a baseline amount that can be adjusted up or down once actual selections are made. This is a standard practice in construction estimating when design elements remain undetermined.
Why the Other Options Are Wrong
Option B: When subcontractor bids are higher than expected
High subcontractor bids are addressed through re-bidding, value engineering, or scope changes, not through design allowances. Design allowances are specifically for unspecified design elements, not cost overruns.
Option D: When the contractor wants to increase profit margins
Design allowances are not used to manipulate profit margins - they are legitimate budget placeholders for unspecified items. Using allowances to artificially increase profits would be unethical and could constitute fraud.
Memory Technique
Think 'Design Allowance = Decisions Absent' - when design decisions are absent, allowances fill the gap
Reference Hint
Look up 'Estimating and Bidding' chapter in your contractor reference manual, specifically the section on allowances and contingencies
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 masonry crew consists of 3 bricklayers and 2 laborers. Bricklayers earn $32 per hour and laborers earn $18 per hour. If the crew can lay 450 square feet of brick per day (8 hours), what is the labor cost per square foot?
Next Question
Under Florida Statute Chapter 713, what is the maximum time limit for a general contractor to record a Claim of Lien after the last day of work or furnishing of materials?