Common use of Project Contingency Clause in Contracts

Project Contingency. The Project Contingency, established in the GMP proposal, shall be considered the Construction Manager’s contingency. The estimated Cost of the Work shall not include the Construction Manager’s Buy-Out/Owner’s Contingency. It is expected that some cost savings between the Construction Manager’s Guaranteed Maximum Price (GMP) and the actual Cost of the Work may be generated as a result of the final bidding negotiation of subcontracts and actual expenses incurred by the Construction Manager. The Construction Management Fee, General Conditions, and General Requirements shall not be adjusted as a result of these savings. Any cost savings which is realized as a result of this Buy-Out shall be held by the Owner as the Owner’s Contingency, which is not part of the GMP proposal. When costs arise on the Project which the Construction Manager believes should be paid from the Project Contingency fund established in the GMP proposal, the Construction Manager shall promptly advise the Owner of such costs consistent with the requirements of the Contract Documents. If the Owner concurs that such costs are properly payable from the Project Contingency funds, the Project Contingency shall be reduced in the amount of such costs. Owner’s concurrence that costs be paid from the Project Contingency will not be unreasonably withheld. Only upon the exhaustion of the funds in the Project Contingency shall similar Construction Manager’s contingency payments be made from the Owner’s Contingency and only with the Owner’s prior approval. The Owner’s Contingency shall only be adjusted by means of issuing a written Construction Change Directive, and it shall be clearly noted on the document that costs are allocated against the Project Contingency.

Project Contingency. The Project Contingency, established in the GMP proposal, shall be considered the Construction Manager’s contingency. The estimated Cost of the Work shall not include the Construction Manager’s Buy-Out/Owner’s Contingency. It is expected that some cost savings between the Construction Manager’s Guaranteed Maximum Price (GMP) and the actual Cost of the Work may be generated as a result of the final bidding negotiation of subcontracts and actual expenses incurred by the Construction Manager. The Construction Management Fee, General Conditions, and General Requirements shall not be adjusted as a result of these savings. Any cost savings which is realized as a result of this Buy-Out shall be held by the Owner as the Owner’s Contingency, which is not part of the GMP proposal. When costs arise on the Project which the Construction Manager believes should be paid from the Project Contingency fund established in the GMP proposal, the Construction Manager shall promptly advise the Owner of such costs consistent with the requirements of the Contract Documents. If the Owner concurs that such costs are properly payable from the Project Contingency funds, the Project Contingency shall be reduced in the amount of such costs. Owner’s concurrence that costs be paid from the Project Contingency will not be unreasonably withheld. Only upon the exhaustion of the funds in the Project Contingency shall similar Construction Manager’s contingency payments be made from the Owner’s Contingency and only with the Owner’s prior approval. The Owner’s Contingency shall only be adjusted by means of issuing a written Construction Change Directive, and it shall be clearly noted on the document that costs are allocated against the Project Contingency.