Contingency is a budget reserve for unforeseen conditions and minor scope growth that is statistically likely on any construction project but can’t be specifically identified in advance. It differs from an allowance (which covers a known, definable item). Standard percentages: 5% for new construction with complete drawings and good site information; 10% for renovation of occupied or older buildings with unknown wall conditions; 15% for major renovation where extensive discovery scope is likely. RainFire Builders states the contingency amount, percentage, and basis explicitly on every estimate. On cost-plus projects, unused contingency reduces the client’s final cost. On fixed-price projects, the contractor carries the contingency risk. Either way, it should be visible and explained — not embedded invisibly in line item pricing.