Building projects are complex and despite the best planning, there are times when unexpected issues arise that cause delays and additional costs. To mitigate these risks, project managers include contingencies in their project plans. In this article we take a quick look at the different types of building project contingencies to help you better understand how to plan for them.
What is a Building Contingency?
The term ‘building contingency’ can refer to both a possible future event and a reserve fund set aside during the planning phase of a building project to cover unexpected costs that may arise. Having a contingency in place helps project teams respond quickly and effectively, minimising the impact of unexpected events and keeping the project on track to success.
Design Contingencies
- Errors and omissions that need to be corrected
- Changes in building codes during the design phase, requiring modifications to the design plan
- Client requests for modifications
- Availability of materials may change
- Changes in project scope
- Unforeseen site conditions
- Environmental factors such as weather or soil conditions
- Technological advances may require modifications to the design plan to incorporate new features or functions
Construction Contingency
- Modifications to the construction plans requested by the client, architect, or other stakeholders
- Unforeseen site conditions that require additional work or resources, such as soil or environmental issues
- Permit and inspection delays
- Labour and material shortages
- Weather-related delays
- Equipment failure
- Design errors or omissions
- Unforeseen structural issues
- Unforeseen changes in building codes or regulations
Schedule Contingency
Weather delays
Permit and inspection delays
Material shortages
Labour shortages
Design modifications
Site conditions
Equipment failure
Unforeseen structural issues
Contractor delays
Environmental Contingency
Contaminated soil discovered during excavation or site preparation that requires additional work or disposal measures
Endangered species found on the construction site may require changes to the construction plan or additional permits
Wetlands on the construction site may require changes to the construction plan and/or permits
Air quality polluted by dust, smoke or chemicals may require additional measures
Excessive noise caused by construction activities that may require additional measures to reduce the impact on the surrounding environment or nearby residents
Waste management, including recycling and responsible disposable of contaminants
Energy efficiency measures may need to be taken
Water conservation in cases of low flow plumbing fixtures and irrigation systems
Legal Contingency
Permitting issues
Zoning changes
Land disputes
Easements and rights-of-way
Environmental regulations
Labour laws and regulations
Contract disputes
Intellectual property rights
Insurance coverage
While it’s impossible to predict every risk, setting aside contingencies can act as a buffer if an unexpected event does arise.
Jaws Contracting (NT) has decades of experience in contracting and project management, and our team is well-equipped to handle jobs of all shapes and sizes. Get in touch today via our contact form or call 1300 792 974 for a quote for our professional building project management services or to discuss how we can help support your project.
Call 1300 792 974 today to learn how we can help you manage your building project more effectively.
