Contingency costs are costs that are included in a project budget to cover unforeseeable events or circumstances that may occur during the project. These costs are typically set aside as a percentage of the total project budget and are used for expenses that are not accounted for in the initial estimate. Examples of contingency costs include unexpected delays, changes in materials or labor costs, or unforeseen environmental or regulatory issues. The purpose of including contingency costs in a project budget is to ensure that unexpected challenges can be addressed without causing significant delays or cost overruns.
