How much contingency should a construction project have?

It depends on the work and how much is unknown. A straightforward new build often carries about 5 to 10 percent, a renovation 10 to 20 percent, and a complex or first-of-kind project 15 to 25 percent. Early design and uncertain conditions push the number higher.

How do you calculate contingency?

Contingency = base construction cost multiplied by a contingency percentage. The better approach is to set that percentage from the project type and its risk factors rather than applying one flat number to every job.

What is the difference between contingency and management reserve?

Contingency covers known risks within the project scope and is part of the cost baseline. Management reserve covers unknown unknowns and sits above the baseline, released only by management. This tool sizes contingency.

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Right-size your contingency.

A flat percentage over-reserves the easy jobs and under-reserves the risky ones. Size it by project type and what you actually do not know yet.

How much contingency depends on the work and how much is unknown. Typical starting ranges:

New build	5 to 10 percent
Renovation	10 to 20 percent
Complex / first-of-kind	15 to 25 percent

Early design and uncertain site conditions push the number toward the top of the range. This tool risk-weights it for you.

Your project

Base construction cost ($)

Project type

Design stageSite conditionsMarket pricing

Risk-weighted contingency

19%

base 12% for the type, plus 7 points for risk

Setting the reserve is step one. Watching it burn is the job.

A contingency number is only useful if you track it as the project spends it. POD reads the cost and change data your team already records and shows the reserve drawing down in real time, so you know when it is running thin before it runs out.

We won't invent numbers you didn't give us.

Track your contingency as it burns.

POD turns the reports you already produce into a live reserve burndown. As complete as your data.

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Last updated: July 2026