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Risk management

How does an owner provide a financial safeguard for the following situations:
- unanticipated price escalation of a particular product
- an architect’s omission of flashing in the construction documents
- a necessary change during construction, modifying the project’s scope.
A. Allowance
B. Alternates
C. Contingency
D. Escalation

AnswerC. Contingency is an amount, usually a percentage, that is part of the project budget to offset changes in the scope of the project, unknown conditions, and gaps/oversights in the documents.

ARE 4.0 exam prep: PPP

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