Contingency: how much should a builder actually allow

Contingency has a bad name because it is usually done badly: a vague lump lobbed on top, or worse, nothing at all with fingers crossed. Done properly, contingency is priced risk, sized to the specific unknowns of a specific job, and it is one of the clearest markers of a builder who prices like a professional.

What contingency is, and what it is not

Contingency is money for the things that are genuinely uncertain at pricing time: the condition of what you cannot see, the surprises old buildings reliably provide, the small design decisions the client has not made yet. It exists because on real jobs, the drawings are never the whole truth.

Be equally clear about what it is not. It is not a cushion for your own estimating errors; underpriced plastering is a rate problem, and the fix is a better rate book, not a bigger fudge. It is not spare margin to give away in negotiation. And it is not a substitute for measuring; a fat contingency on top of guessed quantities is just two guesses stacked up. Risk money only works when the rest of the estimate is honest, which is why it comes after measurement in the pricing sequence, never instead of it.

How much: rules of thumb by job type

The right allowance tracks one variable above all: how much of the job is hidden from you when you price it. A new detached garage on a clean site hides almost nothing; a Victorian refurbishment hides almost everything. As rules of thumb, many firms allow along these lines:

Treat these as starting points, then move the number for the evidence in front of you: a proper survey, trial holes, an honest drain camera all buy the percentage down; a client who has not chosen a kitchen, stairs from the seventies, or a roof nobody has been inside push it up. The percentage is a stand-in for knowledge, so anything that turns an unknown into a known is worth real money at pricing time, and an hour spent lifting a hatch or walking the drains often pays for itself several times over in allowance you no longer need to carry.

Where to hold it: visible line or inside the rates

Now the tactical question: does the client see the contingency? There are three honest approaches, and one dishonest one.

Visible line. A stated "contingency: £3,500 for unforeseen works to the existing structure, only spent with your agreement" reads as maturity, not weakness. It manages the client's expectations about old buildings, and any unspent balance handed back at the end builds the kind of trust that wins referrals. This is the default we recommend on refurbishment work.

Held in the rates. Some builders spread risk money through the unit rates on riskier elements. Legitimate, and sometimes right for competitive tenders where a visible line invites cherry-picking, but you lose the expectation-setting benefit, and you must track it yourself or it silently becomes margin you then give away.

Carved out as provisional sums. Where a specific chunk of work is unknowable, drains, the floor structure under the tiles, treat it as its own provisional item rather than inflating the general allowance.

The dishonest version is claiming there is no contingency to win the job, then finding the "surprises" fund via aggressive extras. It works once per client and poisons the well; the difference between risk pricing and that game is the difference between a QS and a cowboy.

Contingency versus provisional sums

The two get muddled constantly, and the distinction is useful. Contingency is a general allowance for the unknown-unknowns across the whole job. A provisional sum is a specific placeholder for a known item that cannot be priced yet: "allow £2,000 for drainage repairs pending camera survey", "kitchen units by client, allow £8,000 supply". Known item, unknown cost: provisional sum. Unknown items entirely: contingency. A good quote on an older property often carries both, clearly labelled, and our guide to provisional and PC sums covers the mechanics.

Spending it well

Contingency discipline continues on site. Log every draw against it: date, what was found, what it cost, ideally with a photo. When the client can see that £1,800 of the allowance went on the rotten wall plate with pictures to prove it, the conversation stays factual. And when the job ends with allowance unspent, tell them; returning £900 nobody expected is the cheapest marketing you will ever do.

Then close the loop for yourself: compare what risk actually cost against what you allowed, job after job, and let your percentages learn. That review habit is the same one that sharpens every other part of the estimate, as we argue in the seven margin-killing mistakes. If you price with QS Quoter, the contingency sits as its own visible, editable line in every generated bill, sized to the job type, so the risk conversation starts honest and stays that way.