Browse Definitions :
Definition

contingency budget (cost contingency)

Contributor(s): Ivy Wigmore

Contingency budget, in the context of project management, is an amount of money that is included to cover potential events that are not specifically accounted for in a cost estimate. The purpose is to compensate for the uncertainty inherent in cost and time estimates, as well as unpredictable risk exposure

A contingency is something that may or may not occur but that must be dealt with if it does. The word contingency implies that the potential of an event is foreseeable. In business, contingency plans are drawn up to specify foreseeable potential events, the actions to be taken to address them and the resources that will be required to do that, including money.

Events that are known possibilities are sometimes referred to as known unknowns. Additional funding may be included in contingency for unforeseeable events, which are sometimes referred to as unknown unknowns.

The amount allotted for contingency and details of what it is intended to cover may be laid out in documents shared with the clients or may be only specified within the project management organization. In some cases, contingency is not specified but is ensured through mechanisms like adding to the number of days allotted for a segment of the project, in which case it is sometimes referred to as padding. 

This was last updated in March 2019

Continue Reading About contingency budget (cost contingency)

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

  • compliance as a service (CaaS)

    Compliance as a Service (CaaS) is a cloud service service level agreement (SLA) that specified how a managed service provider (...

  • data protection impact assessment (DPIA)

    A data protection impact assessment (DPIA) is a process designed to help organizations determine how data processing systems, ...

SearchSecurity

  • quantum key distribution (QKD)

    Quantum key distribution (QKD) is a secure communication method for exchanging encryption keys only known between shared parties.

  • identity theft

    Identity theft, also known as identity fraud, is a crime in which an imposter obtains key pieces of personally identifiable ...

  • cybercrime

    Cybercrime is any criminal activity that involves a computer, networked device or a network.

SearchHealthIT

SearchDisasterRecovery

  • disaster recovery (DR)

    Disaster recovery (DR) is an area of security planning that aims to protect an organization from the effects of significant ...

  • disaster recovery plan (DRP)

    A disaster recovery plan (DRP) is a documented, structured approach that describes how an organization can quickly resume work ...

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

SearchStorage

  • cloud storage

    Cloud storage is a service model in which data is transmitted and stored on remote storage systems, where it is maintained, ...

  • secondary storage

    Secondary storage is storage for noncritical data that will not be frequently accessed.

  • logical unit number (LUN)

    A logical unit number (LUN) is a unique identifier for designating an individual or collection of physical or virtual storage ...

Close