Having a Safety Net Means Everything in Lake of the Ozarks Commercial Construction. Follow Along With PCE Construction’s Contingency Guide

It is not out of the ordinary for a construction plan to evolve over the process. In fact, the unexpected is so expected that commercial builders usually offer contingency plans for projects in the Lake of the Ozarks area. As factors change and subcontractors are implementing new solutions, a general contractor will oversee these scenarios and pull from a commercial construction contingency budget that was set before the project began. 

Whether you’re building a new medical center, a local memorial, or an expanded office, having a backup plan is required for every commercial build in mid-Missouri. Follow along with our full construction contingency guide to learn more.

What is a construction contingency plan & what does it mean for Lake Ozark, MO builders?

Construction contingency is one piece of the complete pie that makes up your project’s budget. This is an amount or percentage of money that is kept tucked away and later used if an issue arises during the construction process. 

Contingencies vary far and wide, but most changes are a result of significant modifications, on-site environmental issues, or errors from a miscommunication in the design phase. Different types of contingency funds serve different purposes in Lake Ozark, MO: contractors, designers, owners, and subcontractors make up the majority of plans.

The most frequent types of commercial construction contingencies at the Lake of the Ozarks

Contractor’s contingency plan

Contingency plans for contractors are most frequently associated with commercial contracts in mid-Missouri. The reason for these budget changes can range broadly since the nature of a construction project is unpredictable. However, many commercial contingencies include material price increases, extra labor spent, timeline delays, and more. The contingency budget is often split between the contractor and the owner, but it depends on the guaranteed maximum price (GMP) contract. A guaranteed maximum price contract sets a cap on the overall budget, saving the project owner money when unforeseen events exceed the amount in the contract. 

Subcontractor’s contingency plan

This specific type of plan is for errors that happen on the subcontractor team. It can cover staffing problems, funding cuts, on-site failures, and a variety of other situations. Having this allotted money is an effective form of risk management that will ensure the project is finished with quality craftsmanship and materials. With an expert commercial construction team, there may be no need for a contingency fee at all by the end of the build. 

Designer’s contingency plan

While designer’s contingency plans are less common than contractor plans, they are still essential and should not be overlooked on certain projects. If a property is being built from a custom design, there is little room for error in the blueprints. A designer’s contingency plan accounts for this and keeps the project running if there are design changes, overdue deliverables, or a clash with the construction timeline. This mostly applies to design-builds at the Lake of the Ozarks, and is less relevant for commercial remodeling projects or expansions. 

Owner’s contingency plan

This type of contingency is mainly focused on the owner of a project at the Lake of the Ozarks. The owner is either a project manager or works closely alongside one, and their priority is making sure the vision of the build succeeds and looks aligned with the business. Funds for the owner can resolve document errors, contingencies with the construction site, and more. Since a project owner has so much oversight of a new build, this is one of the most significant types of commercial contingency plans in Lake Ozark, MO. 

How are construction contingency percentages estimated for Lake Ozark commercial contractors?

The truth is every commercial project is working under specific conditions, and the right amount for contingencies might look different for every team. Simple projects may have lower contingency percentages, while other projects can take up to 10%. Assessing potential risks of construction ahead of time can largely determine the proper budget. Consider the time of year and the weather conditions. How many people are working on the build? The most common calculation is as follows: 

• Look at the full commercial construction budget
• Discuss potential risks most relevant to the project
• Adjust lower or higher than 10% and optimize it to the business

Is commercial construction contingency the same as an allowance for a design-build project in Lake Ozark, MO?

Contingency plans share some similarities with construction allowances, but they are not quite the same. On one hand, a contingency fund is intended for unexpected costs that occur after an agreement was made. On the other hand, an allowance is set before design and construction, and is used for broad planning purposes when the details haven’t been worked out yet. Keeping track of both will ensure a smooth, professional outcome. 

We Are the Lake of the Ozarks’ Trusted Commercial Construction Team. Learn More About Our Work & Get in Touch Today

Since 1989, PCE Construction has been an active commercial building company proud to serve the Lake Ozark, MO area. From contractors to architects to subcontractors, we have the full staff and the right skills for any type of project, so budgeting can be made simple. Reach out to central Missouri’s most reliable design-build team today for more information.