Comments on: The Hesitancy of Contingency

By: Don Brinkmann

Don Brinkmann — Wed, 25 Nov 2015 18:26:35 +0000

I have had the same argument with GC’s. They expect the Owner to put money in the budget as a “contingency” but if you ask them whose money it is, the response is typically that it is theirs. Definately an argument to have at the start of the construction phase and not later. Seems like the Owner should have a contingency for Owner changes and design errors, while the GC should have his own contingency for his errors and omissions and both parties should put the funds in two escrow accounts and keep it out of the contract.

By: Joe Levi

Joe Levi — Wed, 26 Aug 2015 16:24:12 +0000

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Mark Twain

Paul, thanks for the great article.
we’re always struggling with this but in these volatile times more than ever.
All bidders must make assumptions to derive a cost with more assumption made in the earlier phases of the design. These assumption can rear their heads as the design progresses or in most cases in a change order request during construction. The Contingency seems the best way to manage this. Unfortunately our industry is fraught with distrust so the contingencies are never fully discussed. Who all is carrying a contingency owner, contractor, subs, suppliers, designers? What is the contingency for? What is it in the documents or the designers, or owners that you think requires some hedging? Why are you so hesitant to point out missing information during bidding and so readily able do do so during construction? You don’t have to answer that it’s obvious.
Finally a GMP without transparent contingencies appears to be no different than a hard bid.
Let’s figure out a way to get a GMP that is fair to all and represents what the concepts was meant to convey.
Thanks

By: Matt Porta

Matt Porta — Fri, 21 Aug 2015 16:03:48 +0000

Paul,

Your post today was uncanny in its timing. We have a monthly Project Manager’s round table, which took place yesterday afternoon. The discussion topic was ‘How to talk about money’ where one of the discussion topics focused around the role of contingency, who should hold it, how it should be spent, and how to talk to an owner about it. We appreciate your perspective and really have to concur with everything you have written.

Thanks,

Matt