Some of the principal points which should be considered in connection with the estimate of a contingent item are here suggested. No claim is made that the almost impossible task of including them all has been accomplished.
Whether or not labor will be obtainable throughout the duration of the work at the prices estimated.
Possibility of strikes.
Whether labor will have to be imported at an expense for labor supply agents, railroad fares, etc.; if so, the percentage of desertions.
Laws governing conditions and hours of labor should have been considered in connection with making up the estimate proper but there may be features more or less uncertain.
Prices may vary greatly during the life of the contract.
For important items such as cement and fuel it is the common and safe practice to contract with mills or dealers for the entire quantities to be required. If a bid is made without contracting for materials and supplies, the bidder has simply put himself on the short side of the market, and the contingent item is to cover his possible error in judgment.
For most items other than cement and fuel the requirements are so small that any ordinary fluctuations in price would be immaterial.
Freight rates may be considered fixed, but the conditions of haul from railroad to work should be scrutinized for possible changes.
The number of interruptions and amount of lost time on account of rain or snow or temperature so low that work cannot be prosecuted.
Frequency, size, and effect of possible floods. Judgment as to frequency and size of floods must be based upon rainfall and run-off figures for that watershed or upon such figures for an adjacent and similar watershed of known relative size. Adequacy of proposed temporary works for diverting the water and possible damage by a flood exceeding their capacity. Such damage includes cost of repairing or rebuilding the works on the same or another plan, cost of resulting delay, cost of re-excavating loose material which may have washed into the pit, possible loss of plant, etc.
An uncertainty regarding a quarry is seldom as to the amount of stone but as to the shape in which it will come out; whether it will furnish at the estimated cost such large and well-shaped stone as may be required. This matter was discussed in the chapter on Quarrying. A contingent item may in some cases include the estimated cost of importing a proportion of the stone from a proved quarry. In the case of a deposit of sand of satis- . factory quality, the uncertainty is as to whether the deposit has been prospected sufficiently to show that the required quantity is available. There should be borne in mind the possibility of having to go further and open another pit or even of resorting to manufactured sand. The character of the earth to be excavated at the dam site has usually been determined with ample accuracy from the borings put down to locate the rock surface.
The experience, ability and above all the character of the engineer as affecting the progress of the work and the cost to the contractor.
The possibility of expense for right of way in addition to what had been estimated or secured.
Expensive or burdensome regulations by local legislative or licensing bodies.
Solvency of the owner; expense, delay or legal procedure to secure pay for work done. If, as is sometimes the case, it is stipulated in the contract that the contractor shall accept his pay wholly or partly in bonds of the enterprise, then the value of such securities is partly discounted in the estimate and is partly an uncertainty.
Payments to placate political parties, to secure contracts or for prompt action on final estimates and claims. In the light of recent events this item might in New York State properly be classed as an overhead expense.
Accidents resulting in damage or breakdown to portions of the plant; also injuries to workmen resulting in claims for damages or compensation. If the latter risk is carried by the builder it is properly a contingent item; if the builder takes insurance in a casualty company the usual basis for paying for it is a percentage (often 2 per cent.) of the pay roll, and it should then be classed as a portion of the labor cost.
Losses on account of disputed or disallowed claims, or arising from ambiguities in or misunderstanding of the contract.
After the estimate or bid has been completed, there always remains the chance that some item has been entirely overlooked. This brings to mind a certain picture entitled "The Successful Bidder " which represents more grim truth than it does poetic license. In it is shown a disheveled contractor on the verge of nervous prostration, clutching a notice of award of contract and wildly questioning "What did I forget?" There is no remedy, nothing to say. The matter is simply one of the experience of the estimator in that kind of work under similar conditions.