Define contingency amounts and how some estimators use them.

What will be an ideal response?


Contingencies are amounts of money put into a bid to cover any items that might have been left out, overlooked or to cover unforeseen circumstances. The primary disadvantage of such a practice is it tends to encourage less accuracy in the bidding process. The estimators may feel that they can be less meticulous because they have this sum of money to cover the little things that were overlooked.

Contingency may also be used to cover project risk. When dealing with this type of contingency it is important for the estimator to understand who owns the contingency (who gets it if it is not used).

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