Contingency reserve

What is Contingency Reserve in a Cost Estimate?

Watch this video to learn what Cost Contingency Reserve fund is in a Cost Estimate and why it is allocated to a cost estimate. Get the full video training, s...
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Contingency Reserve is a separately planned quantity used to allow for future situations which may be planned for only in part (sometimes called "known unknowns"). For example, rework is certain, the amount of rework is not. Contingency reserves may involve cost, schedule, or both. Contingency reserves are intended to reduce the impact of missing cost or schedule objectives. Contingency reserves are normally included in the project's cost and schedule baselines.