In CSI-based project cost planning, contingency is defined as an amount added to an estimate or budget to cover uncertainties and unknowns that cannot yet be clearly defined at the current level of design development.
CSI’s practice guides and CDT materials explain (paraphrased):
In early design phases, such as schematic design, the design is only partially developed. Important elements are still undecided, and system configurations may change. Because of this, the cost estimate is inherently less precise.
A contingency line item is therefore included to cover:
Incomplete design information,
Potential scope refinement,
Normal estimating uncertainties, and
Other unknown factors at that stage.
As the project moves into design development and later into the construction documents phase, the design becomes more complete and the uncertainty decreases, so contingency percentages typically decrease.
By contrast, CSI differentiates contingency from other estimating tools:
Allowances: Specific sums in the contract for known-but-not-fully-defined items (e.g., “flooring allowance of X per m²”). These are identified items with placeholder values, not general unknowns.
Unit prices: Agreed rates for measuring work (e.g., $/m³ of rock excavation) used when quantities are uncertain, but scope categories are known and clearly described in the documents.
Alternates: Defined options requested by the owner (additive or deductive) for comparison and selection—again, specifically described items, not “unknowns.”
Because the question specifically references the schematic design phase and asks what the contingency line item covers, the CSI-aligned answer is “Unknown factors” – Option C.
Why the other options are incorrect:
A. Allowances – These are separate, explicit line items in the estimate or specifications and are not what contingency is intended to cover.
B. Unit prices – These deal with agreed rates for work whose quantities may vary, not with broad early-phase uncertainty.
D. Alternates – Alternates are specifically described choices requested for comparison; they are priced individually, not absorbed into contingency.
Key CSI-aligned references (no links):
CSI Project Delivery Practice Guide – sections on cost planning and contingencies by phase.
CSI CDT Body of Knowledge – definitions and uses of contingency, allowances, unit prices, and alternates in estimating.
