Which of the following is true about contingency amounts in estimates?

Contingency amounts in estimates serve a crucial role in construction project planning by providing a financial buffer against unexpected issues. This additional sum is included in the overall project budget to accommodate unforeseen expenses that might arise during the course of the project. Such unexpected issues can include unanticipated site conditions, sudden changes in material costs, or other variables that could impact the project's timeline and budget.

Including a contingency amount ensures that the project can absorb these potential costs without compromising the entire budget. This financial strategy enhances the project's resilience and helps maintain progress, even when faced with challenges that were not originally accounted for in the initial estimate.

The other options suggest limitations or misconceptions about how contingencies work. For instance, they should not be fixed and non-adjustable, as flexibility is key in adapting to the changing landscape of a construction project. Similarly, while they can cover predictable risks to some extent, their primary purpose is to address unforeseen issues, making them broader than just predictable risks. Lastly, contingency amounts are not restricted to material costs; they can also cover labor, equipment, and other project-related expenses.