When preparing a bid, you should:

When preparing a bid, you should:

• A. allow for unexpected problems or costs
• B. negotiate after bid submission
• C. omit contingency for unknowns
• D. base the bid solely on material costs

Answer: (A)

Build in a contingency when you prepare a bid so unknowns don’t derail the project. Bids are predictions, and jobs often bring surprises like hidden drainage problems, soil conditions, permit delays, weather, design changes, or material price swings. A contingency provides a cushion to cover these costs without sacrificing scope or quality, protecting your profit and keeping the project financially viable if actual costs run higher than expected. It also fits how contracts manage changes later—adjustments can be handled through change orders rather than burying every risk in the base bid. Leaving no contingency risks overruns and possible loss, while basing the bid only on material costs ignores labor, equipment, overhead, and profit, which are essential for completing the work and sustaining the business.

Build in a contingency when you prepare a bid so unknowns don’t derail the project. Bids are predictions, and jobs often bring surprises like hidden drainage problems, soil conditions, permit delays, weather, design changes, or material price swings. A contingency provides a cushion to cover these costs without sacrificing scope or quality, protecting your profit and keeping the project financially viable if actual costs run higher than expected. It also fits how contracts manage changes later—adjustments can be handled through change orders rather than burying every risk in the base bid. Leaving no contingency risks overruns and possible loss, while basing the bid only on material costs ignores labor, equipment, overhead, and profit, which are essential for completing the work and sustaining the business.