CONSTRUCTION BID CONTINGENCY.
Too little contingency and a normal project variance wipes out the profit. Too much and you lose bids you should have won. The right amount depends on the specific risks of the job rather than a blanket percentage applied to everything, which means the number moves job to job. A low-risk job with good drawings and a stable GC prices at 1 to 3 percent. A high-risk job with limited geotechnical data and a fast-track schedule prices at 6 to 10 percent.
The blanket percentage is the habit worth breaking. Rating each job across a short list of risk categories, geotechnical conditions, design completeness, schedule, material price exposure, sub reliability, GC payment history, and owner financial strength, gives you a number you can defend in a bid review instead of a feeling you had on the site walk. It also gives you something to check afterward. Tracking how much of the contingency got consumed by category on every closed job is what turns a habit into a system that teaches you something.
Want Josh to check your own numbers? Financial Health Snapshot, $1,500 one time. Your last 12 months read against your trade's benchmarks, with a 60 minute readout.
WHAT IT MEANS.
Bid contingency is the financial cushion that protects your margin when actual conditions differ from estimated conditions.
Contingency isn't margin and it's not overhead. It's a priced allowance for things you know can go wrong without knowing whether they will, which is why it belongs to the risk review and not to the markup conversation. Treat it as margin and you'll cut it to win work. Treat it as overhead and you'll apply the same number onto jobs that don't need it.
WHY A FLAT PERCENTAGE COSTS YOU BOTH WAYS.
You're using the same contingency on every job
A 5 percent contingency on a well-defined concrete flatwork job and a 5 percent contingency on an excavation job with limited geotechnical data aren't the same risk. Applying a flat contingency across everything leaves you under-covered on the hard jobs and over-priced on the easy ones. You lose the easy jobs on price and win the hard jobs at a margin that was never adequate to begin with.
Your contingency is based on gut feel
Most subcontractors set contingency from experience and instinct: this feels like a 3 percent job, that site makes me nervous so I'll add 7. Instinct is worth something, but it's not systematic and it leaves no record of why the number was what it was. A risk-based framework produces more consistent results and documents the margin protection built into each bid, which is what makes a bid review possible.
You've won jobs and lost the margin to risks nobody identified
The risks you identified going into a bid are the risks you priced. The ones you missed, changed field conditions, material price escalation, design coordination problems, and unforeseen site conditions, are what use up the contingency and then reduce the margin. Contingency only covers known unknowns, so a thorough pre-bid risk review is worth more to you than a bigger percentage.
WHAT IT LOOKS LIKE IN DOLLARS.
Those are the three contingency bands by risk level, stated as a percentage of the bid. They come on top of normal overhead and profit rather than replacing margin. A flat 5 percent is in the middle of all three, which is why it's wrong at both ends: too thin for the hard jobs and too fat for the easy ones.
A NUMBER YOU CAN DEFEND.
Rate each risk category on the job: geotechnical and subsurface conditions as high, medium, or low; design completeness, meaning complete drawings against schematic; schedule risk, a fixed date against a flexible one; material price exposure, fixed price against open market; subcontractor reliability, known subs against unknown; GC payment history, strong against unknown; and owner financial strength, a public project against a private speculative one. Higher risk in more categories justifies a higher contingency. That's the whole logic, and it replaces the blanket percentage with something you can walk somebody through.
A low-risk job, meaning well-defined scope, a stable GC, good drawings, and fixed price materials, prices at 1 to 3 percent. A medium-risk job with some scope uncertainty, normal site conditions, and standard payment terms prices at 3 to 6 percent. A high-risk job with limited geotechnical data, a new GC relationship, a fast-track schedule, and open-price materials prices at 6 to 10 percent. These ranges come on top of normal overhead and profit and they aren't a substitute for adequate margin.
SPM tracks how much of the bid contingency got consumed by category on every closed job: which risks came true and what each one cost. That history sharpens the next risk review, because you stop guessing about your own exposure. Over time the repeats get obvious, since certain GCs create change order friction every time, certain project types keep producing material escalation, and certain site conditions keep generating unforeseen cost.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
Built for subs doing $1M to $12M. Above $12.5M we quote.
| Last 12 months revenue | Core | Strategic | Platinum | One-time onboarding |
|---|---|---|---|---|
| Under $1M | $1,900 | $3,100 | $3,300 | $1,000 |
| $1M to $3.5M | $2,600 | $4,100 | $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 | $5,900 | $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 | $7,600 | $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 | $8,900 | $14,900 | $6,000 |
| Above $12.5M | Quoted | Quoted | Quoted | Quoted |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers, and it moves with your revenue band. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Just want the setup? Onboarding only is the same onboarding work with no monthly service after it, one time, at the onboarding fee plus $2,000. Start a monthly engagement later and $2,000 counts toward it. It starts at $3,000, and the price for every band is on the pricing page.
The three tier columns are the whole price. Which one fits depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
- Online software only: QuickBooks, Sage, Viewpoint and similar. No VPN or hosted desktop.
- Not in any tier: payroll, pay applications, collections on receivables.
- Pricing valid through 2027.
CFO work. Your own bookkeeper keeps doing the books.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
Core, plus bookkeeping and bank reconciliations, plus job costing and WIP software set up and managed for you. Use your own online accounting software or we supply it, one price.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
