Professional Practice Architecture Practice Test

For a simple residential project, how much should be allocated for Contingencies?

1. 5%

2. 10%

3. 15%

4. 20%

The correct answer is: 15%

In project management, particularly in residential construction, allocating a portion of the budget for contingencies is essential to accommodate unforeseen expenses. A commonly accepted practice is to allocate around 10% to 15% of the total project budget for contingencies. This allocation helps to cover unexpected costs that might arise during the building process due to changes in scope, price fluctuations in materials, or other surprises. Choosing 15% as the contingency allocation is a practical approach. This percentage is generally considered a safe buffer to ensure the project stays on track financially, thereby maintaining the project's viability without significantly compromising its quality or scope. While lower percentages, like 5% or 10%, may be adequate in very straightforward projects or where risks are minimal, having a contingency set at 15% provides a more robust safety net. In complex projects where the potential for unexpected costs is higher, this additional coverage can ensure smoother completion without excessive financial strain.