Bid terms glossary
Contingency
Money set aside to cover unknowns and changes.
What it means
A contingency is a reserve of money for things nobody can fully predict, such as hidden conditions, design gaps or changes.
An owner's contingency sits in the owner's budget and is controlled by the owner. A contractor's contingency is carried inside the contractor's price, and who controls it, and what happens to any unused amount, depends on the contract.
Why it matters when leveling bids
If one bidder carries a contingency inside their number and another doesn't, the bids aren't comparable. Ask each bidder to show any contingency as a separate line.
Your own owner contingency is where you cover the gaps you find while leveling. Don't count on it to cover scope a bidder simply left out.
Example wording
Example only
- “Contractor contingency: $[amount], to be used only with owner's written approval.”
- “Pricing includes a [n]% contingency for unforeseen conditions.”
- “Unused contingency to be returned to owner at closeout.”
Made-up wording to show the pattern. Not taken from any real bid. Bracketed items are placeholders.
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Related terms: Allowance · Change order · General conditions · All terms
General guidance, not legal advice. How a term works on your project depends on your contract documents.