Which term refers to an amount added to the estimate to allow for changes that experience shows will likely be required?

Which term refers to an amount added to the estimate to allow for changes that experience shows will likely be required?

• A. Escalation
• B. General Conditions
• C. Contingency
• D. Production

Answer: (C)

Contingency is a reserve added to the estimate to cover changes that experience shows will likely be required. It acknowledges uncertainty in scope, design, and conditions and uses past project data to size a cushion so the project can absorb changes without blowing the budget. This differs from escalation, which anticipates cost increases over time due to market conditions; General Conditions cover ongoing overhead and site-related costs; and Production relates to output or productivity rather than a budget buffer.

Contingency is a reserve added to the estimate to cover changes that experience shows will likely be required. It acknowledges uncertainty in scope, design, and conditions and uses past project data to size a cushion so the project can absorb changes without blowing the budget. This differs from escalation, which anticipates cost increases over time due to market conditions; General Conditions cover ongoing overhead and site-related costs; and Production relates to output or productivity rather than a budget buffer.