Construction Contingency Refund?

W

wooger

Greeting's to all,

Should the general contractor refund contingency to the owner when not being used (no undetermined circumstances happened) upon completion of the project? why so?
 

harry

Trusted Information Resource
Re: Construction Contingency-Refund?

.................... Should the general contractor refund contingency to the owner when not being used ..........................

Yes, because contingency is just a provision for some specific purpose.
 

somashekar

Leader
Admin
Re: Construction Contingency-Refund?

Greeting's to all,

Should the general contractor refund contingency to the owner when not being used (no undetermined circumstances happened) upon completion of the project? why so?
When it is accounted correctly under the head of "contingency advance" paid to general contractor, your books of accounts automatically takes care of it.
 

Pancho

wikineer
Super Moderator
Greeting's to all,

Should the general contractor refund contingency to the owner when not being used (no undetermined circumstances happened) upon completion of the project? why so?

Depends on the contract.

If the contract is cost-plus or reimbursement, then most likely the contractor will have to return any advanced contingency funds that were not used. If the contract is fixed-price no-escalation, then most likely the contractor gets to keep whatever contingency he built into his budget.

But contracts can be written to say whatever the parties can agree to, so the above can be reversed, or they can split the difference, or whatever. Check the language of the contract.
 

Jim Wynne

Leader
Admin
Depends on the contract.

If the contract is cost-plus or reimbursement, then most likely the contractor will have to return any advanced contingency funds that were not used. If the contract is fixed-price no-escalation, then most likely the contractor gets to keep whatever contingency he built into his budget.

But contracts can be written to say whatever the parties can agree to, so the above can be reversed, or they can split the difference, or whatever. Check the language of the contract.

Before signing it. :D
 
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