Contingencies in construction

Contingencies are downside risk estimates generally applied to cost planning

and timescales.
Contingencies are often expressed in terms of percentages. The percentage
contingencies applied are at their greatest in the early stages of the project
when there are the greatest number of possible risks, but can then be
reduced as better particulars about the project become available and some
risks are passed or overcome:
At the preliminary business plan stage total cost estimates might include a
15% contingency.
In the elemental cost plan this might reduce to 10% of fees and construction
costs.
On awarding the contract, 5% of the contract value might be included as
contingency in the cost plan.
NB Inflation allowances are a separate calculation and are based on cash flow
against a programme.