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 carries 1 to 3 percent. A high-risk job with limited geotechnical data and a fast-track schedule carries 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.
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 carry 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 eat the contingency and then eat 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 sit on top of normal overhead and profit rather than replacing margin. A flat 5 percent sits 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, carries 1 to 3 percent. A medium-risk job with some scope uncertainty, normal site conditions, and standard payment terms carries 3 to 6 percent. A high-risk job with limited geotechnical data, a new GC relationship, a fast-track schedule, and open-price materials carries 6 to 10 percent. These ranges sit 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, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
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 rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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