According to Acquisition.gov, the construction-manager contingency allowance is capped at 3 percent of estimated construction cost, or up to 5 percent with written HCA approval.
Key takeaways
Four printed figures define the maximum add-on for specific contract types. Each applies only to the structure its source names.
- Construction-manager contingency: Capped at 3 percent of the ECW, rising to 5 percent only with written HCA approval, as stated by Acquisition.gov.
- California invoice markup (with overhead): Set at 10 percent for projects that include the time-related overhead bid item, listed in Caltrans guidelines.
- California invoice markup (without overhead): Set at 15 percent for projects that lack the time-related overhead bid item, also documented by Caltrans.
- Written repair estimate ceiling: Limited to 110 percent of the total price stated in the estimate, unless revised and authorized, according to the Minnesota Office of the Revisor of Statutes.
Which add-on cap can apply before you raise a price
Before raising a price, identify the specific contract type and the exact line item being modified. The four caps discussed in this article each attach to a distinct kind of price: a construction-manager contingency, a California administrative markup, or a Minnesota repair estimate ceiling. Do not move a cap from one contract type onto another. For example, the construction-manager contingency rule applies specifically to the contingency allowance within that named contract structure, not to every construction contract.
According to Acquisition.gov, the base limit for the construction-manager contingency is 3 percent of the estimated construction cost. That figure can rise only if a higher amount is approved in writing by the HCA, and even then it cannot exceed 5 percent of the estimated construction cost. This condition is specific to the named source and its stated scope. It does not establish a universal markup rate for all jobs.
The other three caps operate under different conditions and jurisdictions. The California administrative markup lines distinguish between two rates based on whether a time-related overhead item is present on the job. The Minnesota rule sets a ceiling at 110 percent of a written repair estimate. The Ohio force-account limits are dollar-based lines that restrict state work, not contractor fees. Each of these figures belongs to its own page and context. Mixing them creates pricing errors because the conditions attached to each cap differ.
The construction-manager contingency cap
The CCA stands for the CMc Contingency Allowance, which Acquisition.gov defines as an allowance for the exclusive use of the construction contractor to cover reimbursable costs during construction that are not the basis of a change order. This definition applies specifically to the context of Part 536 - Construction and Architect-Engineer Contracts. The base limit for this allowance is three percent of the ECW, according to Legal Information Institute. The source identifies the ECW as the Estimated Cost of the Work, meaning the estimated cost of the construction work, not including home office overhead. This written approval condition is the specific mechanism that allows the percentage to move from the three percent baseline to the five percent ceiling. The allowance provides for a contingency relative to a fixed percentage of the ECW, except for the requirements at paragraph (c)(3) of this section.
When you prepare an estimate for a contract type that uses this structure, verify whether your project documentation includes a written approval from the HCA. If no such approval exists, the three percent figure is the applicable limit. If a written approval is present, check that it specifies a higher amount within the five percent boundary. Do not apply the five percent figure without confirming the presence of the required written authorization. The scope of these definitions remains tied to the named source and its stated context; do not treat one government's rule as the rule for every job.
To manage this in your estimating workflow, apply the percentage to the contingency allowance calculated from ECW. The key is matching the printed cap to the specific contractual condition. If you are working with a Guaranteed Maximum Price structure, confirm that your calculation excludes home office overhead from the ECW base. Check your project files for the HCA approval before finalizing the contingency line item. For related fee limits, see Check 3 fee caps before adding design profit.
Illustrative example: a contingency ceiling
Suppose the estimated cost of the construction work is 100 thousand dollars. At the 3 percent base limit, the contingency allowance is capped at 3 thousand dollars. With written HCA approval for up to 5 percent, the cap rises to 5 thousand dollars.
The California invoice markup lines
The Caltrans payment section prints two distinct administrative markup rates for invoices, and the rate you apply depends entirely on whether the job includes a specific bid item. When the project has the time-related overhead bid item, the page states that the administrative markup to be applied to the invoice is 10 percent. This figure covers owner-operated labor and equipment costs under that specific condition. If you are pricing a California state project and your scope includes this time-related overhead line, the 10 percent figure is the printed cap for that invoice component.
When the job does not have the time-related overhead bid item, the same Caltrans section sets the administrative markup at 15 percent. This higher percentage applies only in the absence of that specific bid item. Do not move the 10 percent rate onto a contract that lacks the time-related overhead item, nor apply the 15 percent rate to a contract that includes it. The source ties each number to a different structural condition within the bid documents.
Practical step for your estimate: Check your bid schedule for the presence of the time-related overhead bid item before selecting a markup rate. If the item exists, use the 10 percent line for the relevant invoice portion. If the item is absent, use the 15 percent line. These are administrative markups defined by the state agency for its own projects; they are not general contractor profit margins or universal industry standards. Your estimating tool should reflect the specific condition of the contract you are bidding, not a blended average of these two figures.
Remember that these rates apply to the invoice as defined by the Caltrans manual. They do not replace other fee structures or profit calculations you might include elsewhere in your estimate. The distinction between having and not having the time-related overhead bid item is the sole determinant for choosing between these two printed percentages. Verify which condition matches your current project documentation before locking your price.
Related reading: Markup and margin rates in 4 estimating tools.
The written-estimate ceiling and the Ohio force-account limits
The Minnesota Office of the Revisor of Statutes sets a ceiling for repair shops that provide a written estimate, capping charges at 110 percent of the total price stated in that estimate ( Minnesota Office of the Revisor of Statutes). This rule applies to repairs on motor vehicles, appliances, or dwelling places. If a shop begins repairs and finds additional work is necessary to accomplish the original repairs, it may charge more than 110 percent only if it did not unreasonably fail to disclose the possible need for that extra work when the estimate was made. In that case, the shop must immediately provide the customer with a revised written estimate and receive authorization to continue before exceeding the initial cap. If the customer does not authorize continuation of the repairs, the shop must return the item as near as possible to its former state or place it in a mutually agreed-upon condition, and release it upon payment for repairs actually performed, which cannot exceed 110 percent of the original estimate. This limit protects the customer from open-ended billing after a specific written figure has been agreed upon.
Ohio Laws prints different dollar lines for state work that do not function as contractor fees. Section 5517.02 of the Ohio Revised Code limits force-account work by the state to thirty thousand dollars for each centerline mile of highway, exclusive of structures and highway traffic signals ( Ohio Laws). For any single highway traffic signal or any other single project, the limit is sixty thousand dollars. These figures define the threshold below which the state may perform work without competitive bidding; they are not markups added to a contractor’s bid price. On the first day of July of every odd-numbered year beginning in 2015, the director shall increase these amounts by an amount not to exceed the lesser of 3 percent or the percentage increase in the department of transportation's construction cost index, annualized and totaled for the prior two calendar years. This 3 percent ceiling caps the growth of the dollar limits themselves, not the profit margin on a contract. Do not treat these Ohio lines as a fee structure you can apply to your own estimates; they regulate state procurement thresholds.
Add-on caps by publisher
The following table maps each publisher to its specific printed cap and the condition that page attaches to it.
Pick the cap for one price
Pick the single line that matches the price you are raising. Check your contract today for the condition that fits: a construction-manager contingency allowance, a California invoice with or without the time-related overhead bid item, or a Minnesota written repair estimate. Use only the figure attached to your exact job category.
Related guides: Retainage caps from 5 public contract rules · Takeoff scale setup and stated limits for 5 programs.
FAQ about contingency and markup caps
Which four caps should an estimator read?
The four printed add-on limits are the construction-manager contingency of 3 percent of estimated construction cost, the California administrative markup of 10 percent for projects with the time-related overhead bid item, the California administrative markup of 15 percent for projects without that item, and the Minnesota ceiling of 110 percent of the total price stated in a written repair estimate. Each figure appears on a specific official page tied to a particular contract type or service context. Do not move one cap onto a different kind of price; match the figure to the exact line its source names.
When may the contingency rise from 3 percent to 5 percent?
According to Acquisition.gov, the base limit is 3 percent of the estimated construction work unless approved in writing by the HCA for a higher amount not to exceed 5 percent. The written approval must come from the named authority before the increase applies. Without that specific authorization, the 3 percent figure remains the ceiling for the contingency allowance.
Which California markup uses 10 percent?
The 10 percent administrative markup applies to invoices for projects that include the time-related overhead bid item. This rate covers owner-operated labor and equipment when that specific bid item is present on the job. It is distinct from the 15 percent line used when the project does not have that item.
What does the Minnesota 110 percent line limit?
Minnesota Office of the Revisor of Statutes sets a rule where a shop shall not charge more than 110 percent of the total price stated in a written repair estimate. A shop may exceed this only if it determines additional work is necessary, did not unreasonably fail to disclose that need, and immediately provides a revised written estimate that the customer authorizes. This is a repair-shop provision, not a general construction contingency.
Why are the Ohio lines not a markup?
The Ohio figures represent dollar limits on state force-account work without competitive bidding, not a contractor fee. According to Ohio Laws, the director increases these amounts every odd-numbered year beginning in 2015 by no more than the lesser of 3 percent or the prior two-year construction cost index increase. These adjustments cap how far the state’s own thresholds can rise; they do not define a profit margin or markup for a private contractor.