Level: Basic
TCM Section(s):
7.6. Risk Management
10.3. Change Management
Venue: 2023 AACE International Conference & Expo
Abstract: Contingency management continues to be a contentious topic in the world of capital project delivery. Key stakeholders often misunderstand, misuse, or make their assumptions on how to manage contingency during the course of the project. The lack of adopting a standardized and structured approach to the utilization of contingency drawdowns is a common challenge within the project controls profession. Mismanagement of contingency drawdown can lead to poor cost management and curtails the ability to understand and articulate the project cost performance status, Hence, having a negative impact on informed decision-making.
The purpose of this paper is not to talk about how contingency is established, but rather about how to manage its utilization from project sanction to completion.The authors will navigate the various definitions and concepts surrounding contingency drawdown and survey, tabulate and analyze some of the industry-wide used techniques. The authors will then compare the advantages and disadvantages of those techniques and provide the reader with recommendations that can be introduced and incorporated into the capital projects environment, to promote sound contingency management.
TCM Section(s):
7.6. Risk Management
10.3. Change Management
Venue: 2023 AACE International Conference & Expo
Abstract: Contingency management continues to be a contentious topic in the world of capital project delivery. Key stakeholders often misunderstand, misuse, or make their assumptions on how to manage contingency during the course of the project. The lack of adopting a standardized and structured approach to the utilization of contingency drawdowns is a common challenge within the project controls profession. Mismanagement of contingency drawdown can lead to poor cost management and curtails the ability to understand and articulate the project cost performance status, Hence, having a negative impact on informed decision-making.
The purpose of this paper is not to talk about how contingency is established, but rather about how to manage its utilization from project sanction to completion.The authors will navigate the various definitions and concepts surrounding contingency drawdown and survey, tabulate and analyze some of the industry-wide used techniques. The authors will then compare the advantages and disadvantages of those techniques and provide the reader with recommendations that can be introduced and incorporated into the capital projects environment, to promote sound contingency management.