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Posted on Tuesday, August 08, 2006 - 07:30 pm:   Edit PostDelete PostPrint Post

I have a construction manager who has been lead to believe that the AIA has published a listing for recommended construction cost contingency percentages based on types of projects.

Has anyone seen a document like this? I have a AIA Handbook that states 5%, or higher for renovation projects. (12th edition, Vol 2, section 3.73, page 694).

Is there another source of this information that I can reference?

(posted anonymously because sometimes 4Specs is a little too popular and this is an ongoing project).
Anne Whitacre, FCSI CCS
Senior Member
Username: awhitacre

Post Number: 375
Registered: 07-2002
Posted on Tuesday, August 08, 2006 - 08:37 pm:   Edit PostDelete PostPrint Post

the American Society of Professional Estimators used to recommend 7% for renovations; 5% for new construction. (I know this because I had a business partner who was an estimator and I heard that drill over the phone a lot).
Frederick L. Jang, RA, CSI
Username: fred_jang

Post Number: 3
Registered: 07-2005
Posted on Wednesday, August 09, 2006 - 11:46 am:   Edit PostDelete PostPrint Post

Several years ago when the rising steel prices ran havoc over the construction industry, GSA (the federal government’s largest landlord) approached the Office of Management and Budget (OMB) to increase the construction contingency rates. Starting in FY 2007 (the federal government starts its fiscal year in October), new construction projects will budget a 7% construction contingency and 10% for R&A projects.

Of course this is a trickle down effect to the state and local governments. It may take a year or two before additional funding is given to projects with federal funds. In the mean time we have to bear the rising double digit raising materials increase that is impacting the award of our projects! Many Contractors and Construction Managers are recommending that Owners and Developers factor in a 5% to 10% “materials contingency” to account for future spikes to construction materials.
Konrad Hee
New member
Username: khee

Post Number: 1
Registered: 04-2006
Posted on Wednesday, August 09, 2006 - 07:33 pm:   Edit PostDelete PostPrint Post

I haven't ever seen any "official" construction contingency recommendations (not to say there isn't any out there). As a former estimator for an architectural cost consulting firm, I would say that percentages should be project specific, each evaluated for its own complexity and risk -- with special attention given for difficult site conditions (poor soils, significant grading issues). Publicly funded projects should probably be higher, in anticipation of a greater number of change orders. 5% for new and 7% for renovation may be typical, but on the lower end. Recommend 7% and 10%.
Tobin Oruch, CDT
Senior Member
Username: oruch

Post Number: 31
Registered: 04-2003
Posted on Thursday, August 10, 2006 - 01:48 pm:   Edit PostDelete PostPrint Post

Another gov't input is the DOE. Since many of their projects are large, complex, new technology, or remediation of uncharacterized brownfields, their older ('97) guide on contingency reflects 3-8% for typical fixed price construction but as high as 50% or more for entire project including design, land acquisition, etc. Interesting to skim through.
Posted on Thursday, August 10, 2006 - 01:52 pm:   Edit PostDelete PostPrint Post

This is all great info. I value your posts and input.

Mr. Jang's information is right on target with what I am looking for. Thanks everyone!

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