Browse Definitions :
Definition

contingency budget (cost contingency)

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)

SearchCompliance

  • compliance risk

    Compliance risk is an organization's potential exposure to legal penalties, financial forfeiture and material loss, resulting ...

  • information governance

    Information governance is a holistic approach to managing corporate information by implementing processes, roles, controls and ...

  • enterprise document management (EDM)

    Enterprise document management (EDM) is a strategy for overseeing an organization's paper and electronic documents so they can be...

SearchSecurity

  • IPsec (Internet Protocol Security)

    IPsec (Internet Protocol Security) is a suite of protocols and algorithms for securing data transmitted over the internet or any ...

  • principle of least privilege (POLP)

    The principle of least privilege (POLP) is a concept in computer security that limits users' access rights to only what are ...

  • biometric authentication

    Biometric authentication is a security process that relies on the unique biological characteristics of individuals to verify they...

SearchHealthIT

SearchDisasterRecovery

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

SearchStorage

  • cloud storage

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

  • cloud testing

    Cloud testing is the process of using the cloud computing resources of a third-party service provider to test software ...

  • storage virtualization

    Storage virtualization is the pooling of physical storage from multiple storage devices into what appears to be a single storage ...

Close