Is contingency added to the contract sum on the G702/703?
1 reply
Jan 23, 2020
Generally, a construction contract that has contingencies built-in should also include some provisions as to how a contractor is able to get their hands on the contingency funds. So, if the contract provides guidance there, then that guidance should be followed.
However, note that contingencies aren't necessarily paid out separately. Rather, they're often built into the project's budget and only dipped into, as required. So, it could be more appropriate to simply bill the job as work is done, knowing that you'll have a little extra room in the budget in case contingencies arise.
However, I'll be the first to admit that I don't have much experience with construction accounting. So, it might be helpful to reach out to someone with more experience in that area - such as Elizabeth Boals, another expert at the Levelset Expert Center.
For more on contingency basics, this article might be helpful: What is Construction Contingency? | Construction Accounting.