This recommended practice (RP) of AACE International defines the expectations, requirements, and general principles of practice for estimating contingency, reserves and similar risk funds (as defined in RP 10S-90) and time allowances for project cost and schedule as part of the overall risk management process (as defined in TCM Framework Section 7.6). The RP provides a categorization framework and provides a foundation for, but does not define specific contingency estimating methods that will be covered by other RPs.

This RP does not address the general risk management “quantification” steps as might be used for screening or ranking risks in terms of their probability or impact. While the quantification methods of contingency estimating may be similar to those used for screening, the application often differs.

This RP is intended to provide guidelines (i.e., not a standard) for contingency estimating that most practitioners would consider to be good practices that can be relied on and that they would recommend be considered for use where applicable. There is a broad range of contingency estimating methodologies; this RP will help guide practitioners in developing or selecting appropriate methods for their situation.