Bid Contingency · Construction Risk · Estimating · Margin Protection · Subcontractor Bidding
Bid Contingency · Construction Estimating · Risk Management · Margin Protection · Bidding
Construction Bid
Contingency.
Bid contingency is the financial cushion that protects your margin when actual conditions differ from estimated conditions. Too little and a normal project variance wipes out profit. Too much and you lose bids you should win. The right amount depends on the specific risks of the job — not a blanket percentage applied to everything.
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SPM vs. Other CFO Firms
Most CFO Firms Serving This Trade
- High revenue minimums — most won't serve under $5M
- Advisory only — no bookkeeping, no implementation
- No job costing setup or ControlQore management
- No monthly WIP as standard deliverable
- No pricing published — discovery call required
- No vetted partner network for bonding, lending, or liens
- No prevailing wage specialty
The Construction CFO — SPM
- Serves $1M–$12M — starts at $1,900/month
- Full implementation — bookkeeping, job costing, CFO advisory
- ControlQore setup and managed for you every month
- Monthly WIP standard in Executive tier
- Full pricing published — no discovery call to find out costs
- Vetted partners for bonding, lending, lien services, payroll
- Prevailing wage and Davis-Bacon specialty
What We See in This Business
01
You're Using the Same Contingency on Every Job
A 5% contingency on a well-defined concrete flatwork job and a 5% contingency on an excavation job with limited geotechnical data are not equivalent risks. Applying a flat contingency across all jobs means you're under-covered on high-risk jobs and over-priced on low-risk jobs. You'll lose the easy jobs on price and win the hard jobs at inadequate margin.
02
Your Contingency Is Based on Gut Feel
Most subcontractors set contingency based on experience and intuition — 'this feels like a 3% job' or 'that site makes me nervous so I'll add 7%.' Intuition is valuable but it's not systematic. A risk-based contingency framework produces more consistent results and better documents the margin protection built into each bid.
03
You've Won Jobs and Lost the Margin to Unidentified Risks
The risks you identified going into a bid are the risks you priced. The risks you didn't identify — changed field conditions, material price escalation, design coordination issues, unforeseen site conditions — are what eat the contingency and then eat the margin. Contingency protects you from known unknowns. A thorough pre-bid risk assessment identifies more known unknowns.
How SPM Fixes It
The Risk-Based Contingency Framework
Rate each risk category: geotechnical and subsurface (high/medium/low), design completeness (complete vs. schematic), schedule risk (fixed date vs. flexible), material price exposure (fixed price vs. open market), subcontractor reliability (known subs vs. unknown), GC payment history (strong vs. unknown), and owner financial strength (public project vs. private speculative). Higher risk in more categories justifies higher contingency — not a blanket percentage.
Contingency Benchmarks by Risk Level
Low-risk job (well-defined scope, stable GC, good drawings, fixed price materials): 1–3% contingency. Medium-risk job (some scope uncertainty, normal site conditions, standard payment terms): 3–6% contingency. High-risk job (limited geotechnical data, new GC relationship, fast-track schedule, open-price materials): 6–10% contingency. These are contingency ranges on top of normal overhead and profit — not a substitute for adequate margin.
Post-Job Contingency Analysis
SPM tracks how much of bid contingency was consumed by category on every closed job — what risks materialized and what they cost. This historical data improves future risk assessment. Over time, patterns emerge — certain GCs consistently create change order friction, certain project types consistently have material escalation issues, certain site conditions consistently generate unforeseen costs. Data-driven risk assessment produces better contingency decisions than intuition alone.
Service Tiers
Tier 01
Core Financial
Starts at $1,900 / month
- ControlQore setup and management
- Job costing aligned to your estimate structure
- Cost-to-complete tracking — updated monthly
- Full-service bookkeeping — minimum 30 min/week
- Vendor payments via ACH (you approve, we initiate)
- Accounts receivable management
- Bank reconciliations and transaction matching
- Controllership
- 1 monthly CFO meeting
- 60-day onboarding — books migrated to last taxable year
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Tier 02
Executive Financial
Starts at $2,900 / month
- Everything in Core Financial
- Monthly WIP schedule — delivered every month, standard
- 13-week cash flow forecasting
- CEO Report — monthly financial dashboard
- 3 CFO advisory meetings per month
- Strategic accountability and actionable to-dos
- Direct access to Josh Luebker
Pricing by Revenue
Revenue Range
(Last 12 Months) |
Core Financial
Monthly |
Executive Financial
Monthly |
| Under $1M | $1,900 | $2,900 |
| $1M – $3M | $2,600 | $3,600 |
| $4M – $6M | $3,800 | $5,500 |
| $7M – $9M | $5,100 | $6,900 |
| $10M – $12M | $6,100 | $8,500 |
| $13M+ | Quoted | Quoted |
Vetted Partner Network
National Lien Services
When AR gets too long, we connect you directly to our lien services partner to protect what you've earned.
Additional cost — not included in monthly fee
Payroll Integration Partners
Prevailing wage and regular payroll software partners integrated directly with ControlQore job costing.
Additional cost — not included in monthly fee
Bonding Partners
Surety relationships and bonding capacity support. We prepare the financials — our partners get you bonded.
Additional cost — not included in monthly fee
Lending Partners
Working capital lines and equipment financing through vetted lenders who understand construction.
Additional cost — not included in monthly fee
Reviewed Financials
CPA-level financial statement reviews for banking, bonding, and large contract requirements.
Additional cost — not included in monthly fee
CPA Coordination
We work alongside your existing CPA — not replacing them. Clean books and job costing make tax time easier.
Included — no extra cost
Common Questions
Straight answers.
Should contingency be a separate line item in the bid or embedded in unit prices?
Either approach works but each has implications. A separate contingency line item is transparent — the owner and GC can see it, which may create pressure to reduce it during negotiations. Embedding contingency in unit prices is less visible but makes the contingency harder to track and harder to recover as a change order if the risk doesn't materialize. Most subcontractors embed contingency, which is fine as long as it's tracked internally so you know how much of each unit price is margin vs. risk coverage.
What happens to contingency that isn't consumed?
Unconsumed contingency becomes additional margin at job closeout. This is actually a good signal — it means your risk assessment was conservative enough and your execution was disciplined enough that the identified risks didn't fully materialize. Tracking unconsumed contingency over time tells you whether your risk assessment is consistently too conservative (in which case you're over-pricing and losing bids) or consistently too aggressive (in which case you're winning bids and consuming the contingency on every job).
What's included in Core Financial?
ControlQore setup, job costing aligned to your estimates, cost-to-complete tracking, full bookkeeping (minimum 30 min/week), ACH vendor payments (you approve, we initiate), AR management, bank reconciliations, transaction matching, controllership, and 1 monthly CFO meeting. Starts at $1,900/month.
What does Executive Financial add?
Everything in Core plus monthly WIP schedule, 13-week cash flow forecasting, CEO Report, and 3 CFO advisory meetings per month. Starts at $2,900/month. WIP, cash flow forecasting, and the CEO Report are Executive tier only.
Do you handle payroll?
No. We have vetted payroll software partners — including prevailing wage integrations — that connect directly with ControlQore. Those are separate engagements at additional cost.
How long does onboarding take?
60 days. We migrate your books to the start of your last taxable year, set up ControlQore, and build your job costing structure. Fully operational in two months.
What software do clients use?
ControlQore. All SPM clients run on ControlQore for job costing and WIP. We set it up and manage it — you don't have to learn it. Clients switching from QuickBooks, Sage, or other platforms migrate during onboarding.
Do you work alongside our CPA?
Yes. We work alongside your existing CPA — not replacing them. Clean books and accurate job costing make their job easier at tax time.
What happens when we grow past $12M?
We have a clear graduation path. We prepare your financials, systems, and team for the transition and connect you with the right firm for your next stage of growth.