💼 Module 6: Overhead, Profit & Contingency
Finish your estimate with a clear markup sequence so you recover overhead, price risk, and still stay competitive.
Overhead (OH)
Contingency (CT)
Profit (GP)
🎬 Watch the Lesson
Pause when needed—then complete the markup exercise right after.
📋 Key Takeaways
- Overhead recovers the cost to run the business/project (not tied to one line item).
- Contingency covers uncertainty/unknowns (not known scope).
- Profit is your return for risk and growth.
- Pick a sequence and stick to it: Direct → OH → CT → Profit (then document it).
🧰 Do This Now (Markup Builder)
Use your estimate subtotal (labor + material + subs) and build your final price step-by-step.
✔ Tip: If PM hours, small tools, mobilization, or supervision are already in labor, don’t add them again as “overhead.”
🧾 Quick Reference: What goes where?
| Bucket | Examples | Rule of thumb |
|---|---|---|
| Overhead (OH) | Admin, office, vehicles, insurance, software, project management allocation | Business/project support costs not tied to one install item. |
| Contingency (CT) | Unknowns, small gaps, incomplete details, renovation surprises | Use when you can’t quantify yet — document why. |
| Profit (GP) | Return for risk + growth | Higher risk/complexity = higher GP target. |
Keep your sequence consistent and write it the same way every time. That’s how you stay defensible and train others.
✅ Skill Check
- What’s the difference between overhead and contingency?
- Why is contingency not used for known scope?
- What is your markup sequence (in order)?
- What’s one example of double-counting you must avoid?
- What should you write in your estimate notes to defend CT?
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