The contingency log: what every entry should carry
Every contractor keeps a contingency log. Most owners do not, and the ones who do often keep a copy of the contractor's. The owner's log is a different document with a different purpose. It records what the owner knows, what the owner agreed with, and what the owner still has questions about. The fields below are the ones that make it work.
The identity fields
Each entry needs a number that never changes, the fund it belongs to, the date it was entered, and the pay application it first appeared on. The fund is the first decision: contractor contingency or owner contingency. Getting this wrong at entry and fixing it later is what the audit trail is for, but getting it right is easier.
The pay application reference matters because the log and the G703 should reconcile. If the owner's log shows draws of $480,000 to date and the G703 contingency line has moved by $510,000, the $30,000 difference is a question. Without the pay application reference the question cannot be asked precisely.
The amount fields
Record the amount requested and the amount approved as two fields. They are often the same. When they differ, the difference is a negotiation the owner should be able to find later. Record the fee and general conditions markup separately if the contract allows markup on contingency draws, because at closeout the markup is usually the first thing disputed.
Add a running balance after each entry. It sounds trivial, but a log that has to be summed every time it is read is a log nobody reads. The balance should be per fund, and it should match what the monthly report shows.
The cause and the owner's position
The cause is the most important field and the least consistently filled. Use a short fixed list: buyout shortfall, coordination, design gap, unforeseen condition, owner scope, schedule recovery, other. The list should match the one used in the change order register, so that a draw and a change order for the same event classify the same way.
Next to the cause, record whether the owner agrees with it. This is a separate field, not a note. Agree, disagree, or under review. A draw the contractor calls coordination and the owner believes is a design gap should carry the contractor's cause and the owner's position side by side. That pairing is what makes the log useful at closeout and in any conversation with the design team.
On a fictional $26 million library renovation, the owner's log carried 64 draws at the end. Fifty one showed agreement. Nine showed disagreement, all classified as coordination by the contractor and design gap by the owner. The nine became the agenda for a meeting with the architect. Without the position field they would have been fifty one plus thirteen with no pattern.
Backup, approval, and history
Record the backup status as expected, partial, or complete, with a link to the documents held. Record the approver and the clause under which the draw was made. Record whether the draw went above any consent threshold and, if so, whether consent was given.
Finally, every change to an entry should leave a record: what changed, from what, to what, when, and by whom. A log that can be edited silently is a log that will be edited silently, usually in the last month.
Fields that do not belong
Keep the log free of narrative. Long descriptions belong in the linked documents. Keep it free of the contractor's internal cost codes unless they map to something in the owner's budget. And keep it free of totals that mix funds. The log is a record, not a report, and the report is built from it.
Keeping it as a ledger
Costwitness holds the contingency log as a ledger with these fields fixed, so that every entry carries a fund, a cause, a backup status, an approver, and an owner position, and every edit is kept. The software enforces the shape. The content of each field is the owner's judgment.
What to do this month
- Write down the fixed cause list your project will use and share it with the contractor so both logs speak the same language.
- Rebuild your contingency log from the pay applications to date with fund, cause, and owner position on every entry.
- Reconcile the log's running balance to the contingency line on the latest G703 and write down any difference.
Questions on this
Should the owner's log match the contractor's log exactly?
The draws and amounts should match, and differences should be chased. The causes and positions may differ, and those differences are the point. Two logs that agree on the facts and record where they disagree on the interpretation are doing their job.
How detailed should the cause list be?
Short enough that every entry fits one category without argument. Six or seven causes is usual. A list of twenty becomes a debate about which of three similar categories applies, and the log stops being filled in.
Who should maintain the owner's contingency log?
Whoever reviews the pay application on the owner's side. That is often the owner's representative or a project accountant. The person needs access to the pay applications and the contractor's narrative, and the authority to record a disagreement without needing anyone's sign off.
In the product
Contingency ledger, Change order register, Monthly owner report. Free tool: Pre-GMP Readiness Score, Contingency Runway.
Keep reading
Earlier: A monthly contingency routine for owners in four steps. Later: Unused contingency at closeout: who keeps it under your contract. All articles on contingency.
See the two funds on a project like yours.
Thirty minutes on a call. The twin drawdown chart on a fictional project at your GMP size, and the month the fund runs out.