contingency
5 years ago No Comments

(pronounced kuhn-TEN-juhn-see)

An incident – such as an emergency situation – that may or may not occur, but that you want to plan for just in case. It’s something liable to happen as or result of something else happening (or not happening). More specifically, you will hear professionals (designers, architects, lawyers, even contractors, etc.) including a contingency fee in their pricing. This fee can be a cushion when the full scope of work is “iffy” or an amount that will be paid upon full and successful completion of the services. Extra info: This fee typically calculated as a percentage of the overall fee.

Example: Because she knew how unpredictable her client – the bank board of directors – could be, Dana built a 10 percent contingency into her estimate for remodeling the lobbies of all the branches in the northeast region.