Image source: IPA Cost Estimating Guidance, 2021, Figure 11, reproduced under the Open Government Licence 3.0 Calculating Anticipated Final Cost and confidence range.
However hard you try, you simply can’t predict the future and anticipate every problem.Ĭontingency allows us to present final budget estimates as a range, as you can see in the figure below. No organization wants a cost overrun to scupper their budget. Only 62% of projects complete within their original budget, according to PMI’s 2021 figures. The detailed figures will go into the budget or the schedule management plan. In practice, that could mean a paragraph or two in your project plan or risk management plan. The amount of each of these will be documented in a project contingency plan. Schedule contingency: A buffer of extra time in case of schedule delays (not that you would ever pad your estimates?).Budget contingency: Additional funding to deal with problems, realized risks relating to a specific event.There are two types of contingency typically used on projects: Project contingency is the additional resources put aside to address potential risk and uncertainty in a project.
CONTINGENCY TABLE PERCENTAGES CALCULATOR HOW TO
This article will explain project contingency, how to calculate contingency and how to manage it within the scope of your projects. If you’re wondering what budget contingency is, then you have come to the right place. Not least: is it enough? Does the funding include contingency? (Because you put some in the request, right?) What exactly got approved? How much do you have and what boundaries and constraints come with it? You will likely have lots of questions. However, before you start the celebration too soon, there are always details to check first. You can’t do much on a project without some funding behind you.
You wouldn’t believe the number of project managers I speak to on mentoring calls who struggle to get their budget approved. Your new project was approved for funding.
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