Project Controls and Estimation Curriculum

Contingency

Module from the Project Controls and Estimation Curriculum curriculum.

Module 5 - Contingency and Risk · Learning Objectives · 1. Distinguish contingency from management reserve · 2. Apply qualitative ranging (% by category) · 3. Apply quantitative Monte Carlo with probability distributions · 4. Set P50, P80 confidence levels per owner appetite · 5. Escalate estimates per published indices (CEPCI, ENR) · Typical Contingency by Estimate Class

Class	Typical Contingency %	Basis	Notes	P Level	Ref
Class 5	30-50% of TIC	Capacity factor	Very preliminary	P50	AACE 40R
Class 4	25-40% of TIC	Equipment factors	Budget	P50	AACE 40R
Class 3	15-25% of TIC	Semi-detailed	FID basis	P50	AACE 40R
Class 2	10-15% of TIC	Detailed	Bid	P50	AACE 40R
Class 1	5-10% of TIC	Definitive	Contract	P50	AACE 40R
Risk reserve (on top)	5-15%	High-risk items	Specific line items	Owner	Owner policy

Source: Project_Controls_Estimation_Curriculum_v1.xlsx · Sheet: Contingency

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