Construction Manager’s Contingency Clause Samples
The Construction Manager’s Contingency clause establishes a specific fund within the project budget that the construction manager can use to cover unforeseen costs or minor changes during the construction process. This contingency is typically managed at the construction manager’s discretion, subject to certain limitations or approval requirements, and is intended to address issues such as design clarifications, coordination errors, or minor scope adjustments that arise after the project has commenced. Its core practical function is to provide flexibility and financial resources to handle unexpected expenses without requiring formal contract amendments, thereby minimizing project delays and disputes over minor cost overruns.
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Construction Manager’s Contingency. The parties agree that the Construction Manager’s Contingency shall be as set forth in the GMP Amendment and shall reflect the risk arising from the relative completeness of the design documents at the time the GMP is established. The Construction Manager may draw down the Construction Manager’s Contingency without Owner’s approval, up to $ per month, and must provide the Owner with a weekly accounting of Construction Manager’s Contingency dr down. The Owner may, at any time, require the Construction Manager to obtain the Owner’s advance written approval to draw down Construction Manager’s Contingency. The Construction Manager’s Contingency shall not be allocated to any particular item of the Cost of the Work and is established for increases in cost of the Work incurred by the Construction Manager for unforeseen causes or details not anticipated by the Construction Manager at the time of the execution of this Agreement and is not intended for changes in the scope of the Work or for reimbursement of expenses and costs not otherwise recoverable as Cost of the Work under Article 6 of this Agreement. It is understood that the amount of any such Construction Manager’s Contingency, except as otherwise provided in this Agreement, is the maximum sum available to the Construction Manager to cover Cost of the Work not included in the Guaranteed Maximum Price which is incurred by the Construction Manager as a result of such unforeseeable causes or details, and it is further understood that cost overruns in excess of the amount of the Construction Manager’s Contingency or other costs not reimbursable as Cost of the Work will be borne by the Construction Manager. It is understood by the Parties that this contingency is not to be allocated to costs due to errors and omissions in the Contract Documents (CDs) or to remedy, correct or resolve any inconsistencies, ambiguities, errors or omissions contained within the Architect’s work product on which the Construction Manager’s Guaranteed Maximum Price was based.
Construction Manager’s Contingency. 4.2.5.1 The Construction Manager’s Contingency, established in the GMP, may be utilized, with the Owner’s concurrence, via ”no cost” change order for the following reasons:
(i) Errors and omissions in the Construction Manager’s bidding and scoping processes;
(ii) reasonable schedule recovery;
(iii) means, methods, and materials reasonably inferred from the Construction Documents;
(iv) subcontractor non-performance or default;
(v) Work not included in the Construction Documents which is necessary to cause the Project to conform to applicable building codes but was not identified as missing during the review of Construction Documents (through no fault of the Construction Manager),;
(vi) other costs incurred by the Construction Manager that are not Cost of the Work, General Conditions Cost or Construction Manager Staffing Costs,; and
(vii) costs and expenses incurred by the Construction Manager, not included in the General Conditions Cost, for provision of management services necessary to complete the Project in an expeditious and economical manner consistent with this Agreement and the best interests of Owner.
(viii) legal costs reasonably and properly resulting from prosecution of the Project for the Owner, including handling claims for changes by Subcontractors and Vendors, subject to the following limitations:
(a) The Owner approved incurring such cost in advance, which approval shall not be unreasonably denied; and
(b) The legal costs were not incurred as a result of the Construction Manager’s own negligence or default. This paragraph does not provide for payment of legal cost incurred in preparing or asserting claim or request by Construction Manager itself for change orders or in enforcing the obligations of this contract.
4.2.5.2 If upon completion of 75% of the Work, the remaining amount of contingency exceeds one- half of the amount of the initial post-buyout contingency, Owner may, at its sole discretion, direct Construction Manager to transfer such excess including related overhead and profit via change order to the Owner.
Construction Manager’s Contingency. The Guaranteed Maximum Price Proposal may include a Construction Manager’s Contingency amount to be used to fund increases in the Direct Construction Cost of the Project identified through the refinement, development and completion of the Construction Documents or procurement of the Work. Any re-allocation of funds from the Construction Manager’s Contingency to cover increases in the Direct Construction Cost must be approved by the Owner in advance and in writing, such approval not to be unreasonably withheld. In written requests to use the Construction Manager’s Contingency, the Construction Manager shall provide detailed documentation of the scope of work affected and the bases for any increases in costs. The Construction Manager’s Contingency is specifically not to be used for Contractor rework, unforeseen conditions, cost increases caused by lack of coordination or communication with the Project Architect or trade Subcontractors, or to correct errors or omissions in the Construction Documents. As the Construction Documents are finalized and the Buyout of the Work progresses the Construction Manager’s Contingency amount shall be reduced by mutual agreement of Owner and Contractor. Any balance in the Construction Manager’s Contingency fund remaining at the end of the Project shall be returned to the Owner as savings.
Construction Manager’s Contingency. 4.2.5.1 The Construction Manager’s Contingency, established in the GMP, may be utilized, with the Owner’s concurrence, for the following reasons:
(i) Errors and omissions in the Construction Manager’s bidding and scoping processes;
(ii) reasonable schedule recovery;
(iii) means, methods, and materials reasonably inferred from the Construction Documents;
(iv) subcontractor non-performance or default;
(v) Work not included in the Construction Documents which is necessary to cause the Project to conform to applicable building codes but was not identified as missing during the review of Construction Documents (through no fault of the Construction Manager), but expressly excluding any legal costs and expenses, including, without limitation, attorneys’ fees and costs, associated with the Project;
(vi) other costs incurred by the Construction Manager that are not Cost of the Work, General Conditions Cost or Construction Manager Staffing Costs, but expressly excluding any legal costs and expenses, including, without limitation, attorneys’ fees and costs, associated with the Project; and
(vii) costs and expenses incurred by the Construction Manager, not included in the General Conditions Cost, for provision of management services necessary to complete the Project in an expeditious and economical manner consistent with this Agreement and the best interests of Owner, but expressly excluding any legal costs and expenses, including, without limitation, attorneys’ fees and costs, associated with the Project.
4.2.5.2 If upon completion of 75% of the Work, the remaining amount of contingency exceeds one-half of the amount of the initial post-buyout contingency, such excess shall be transferred via change order to the Owner.
Construction Manager’s Contingency shall be no greater, as a percentage of the estimated Cost of the Work, than the following at each of the following phases: ten percent (10 %) at Pre-Design ten percent (10 %) at Conceptual Schematic Design eight percent (8 %) at Advanced Schematic Design six percent (6 %) at Design Development five percent (5 %) at (60 %) Construction Documents three percent (3 %) at the time the GMP proposal is submitted two percent (2%) at the time that Construction Manager has bought out Trade Contracts representing ninety percent (90%) of the Cost of Work or more.
Construction Manager’s Contingency. The Guaranteed Maximum Price Proposal may include a Construction Manager’s Contingency amount to be used to fund increases in the Direct Construction Cost of the Project identified through the refinement, development and completion of the Construction Documents or procurement of the Work. Any re-allocation of funds from the Construction Manager’s Contingency to cover increases in the Direct Construction Cost must be approved by the Owner in advance and in writing, such approval not to be unreasonably withheld. In written requests to use the Construction Manager’s Contingency, the Construction Manager shall provide detailed documentation of the scope of work affected and the bases for any increases in costs. The Construction Manager’s Contingency is specifically not to be used for Contractor rework, unforeseen conditions, cost increases caused by lack of coordination or communication with the Project Architect or trade Subcontractors, or to correct errors or omissions in the Construction Documents. As the Construction Documents are finalized and the Buyout of the Work progresses the Construction Manager’s Contingency amount shall be reduced by mutual agreement of Owner and Contractor. Any balance in the Construction Manager’s Contingency fund remaining at the end of the Project shall be returned to the Owner as savings. The Construction Manager’s Contingency shall be limited to a maximum of 3% of the Construction Cost Limitation or other value as agreed to by the Owner. When Design Assist Subcontractor services are implemented on and participate in both Pre-Construction and Construction Phase Services and their combined cumulative value of the work is equal to or greater than 50% of the Construction Cost Limitation indicated the in the Construction Manager’s Guaranteed Maximum Price. the Construction Manager’s Contingency shall then be limited to a maximum of 2% of the Construction Cost Limitation or other value as agreed to by the Owner.
Construction Manager’s Contingency. The estimated Cost of Work shall include the Construction Manager’s Contingency, an amount mutually agreeable between the Construction Manager and Owner, to cover costs arising under Subparagraph 3.2.2, and other costs which are properly reimbursable as Costs of Work, but not the basis for a Change Order. The Construction Manager’s Contingency is for the exclusive use of the Construction Manager while executing the construction Work to address unexpected circumstances (but not material escalation), force majeure impacts, and to correct unanticipated circumstances which are not otherwise reimbursable and do not constitute a change in the Work, as defined in this Agreement. The Construction Manager’s Contingency shall only be adjusted by a written Change Order; and it shall be clearly noted on the Change Order that costs are allocated against the Construction Manager’s Contingency. The Construction Manager shall maintain a Contingency tracking log updated each time Construction Manager’s contingency funds are used.
Construction Manager’s Contingency. 14.3.1 The GMP Proposal may include a Construction Manager’s Contingency amount to be used to fund increases in the Direct Construction Cost of the Project identified through the refinement, development, and completion of the Construction Documents or procurement of the Work, as set forth in Section 8.5.
14.3.2 Any re-allocation of funds from Construction Manager’s Contingency to cover increases in the Direct Construction Cost must be approved by Owner in advance and in writing, such approval not to be unreasonably withheld. In written requests to use Construction Manager’s Contingency, Construction Manager will provide detailed documentation of the Scope of Work affected and the bases for any increases in costs.
14.3.3 Construction Manager’s Contingency is specifically not to be used for Contractor rework, unforeseen conditions, cost increases caused by lack of coordination or communication with A/E or trade Subcontractors, or to correct errors or omissions in the Construction Documents.
14.3.4 As the Construction Documents are finalized and the Buyout of the Work progresses Construction Manager’s Contingency amount will be reduced by mutual agreement of Owner and Contractor. Any balance in Construction Manager’s Contingency fund remaining at the end of the Project will be returned to Owner as savings.
Construction Manager’s Contingency. 1. The GMP Proposal may include an amount (the “Construction Manager’s Contingency”) to be used to fund increases in the Direct Construction Costs of the Project identified through the refinement, development and completion of the Construction Documents or procurement of the Work. The Construction Manager’s Contingency shall be negotiated between the Parties and it shall reflect the risk inherent in the state of completion of the Construction Documents at the time the GMP Proposal is submitted.
2. Any re-allocation of funds from the Construction Manager’s Contingency to cover increases in the Direct Construction Costs must be approved by the City in advance and in writing, which approval shall not to be unreasonably withheld. In written requests to use the Construction Manager’s Contingency, the Construction Manager shall provide detailed documentation of the scope of work affected and the basis for any increases in costs resulting in the need to use Construction Manager’s Contingency funds.
3. As the Construction Documents are finalized and the buyout of the Work progresses the Construction Manager’s Contingency amount shall be reduced by mutual agreement of the City and Construction Manager. The buyout shall occur within the first 20% of the construction duration for each Notice to Proceed issued for construction. Should savings occur after the buyout stage, such savings, and related reductions to the Construction Manager’s Contingency amount, will be retained by the City.
Construction Manager’s Contingency. The GMP Proposal will contain, as part of the estimated Cost of the Work, Construction Manager’s Contingency, a sum mutually agreed upon and monitored by Construction Manager and Owner to cover costs which are properly reimbursable as a Cost of the Work but are not the basis for a Change Order. Construction Manager’s Contingency shall not be used for changes in scope or for any item that would be the basis for an increase in the GMP. Construction Manager’s use of its contingency shall be by written approval of the Owner, and Construction Manager shall provide Owner with a monthly accounting of charges against Construction Manager’s Contingency, if applicable, with each application for payment.