Quiz Time: Can you name the topic that sparks the most discussion during:
- Cost Estimate Reviews
- Cost Engineers’ Interviews?
If your guess is Contingency, you’re spot on!
However, do you find yourself tangled in a web of terms like Contingency, Management Reserve, and Allowances? If so, you’re not alone.
Over the years, we’ve engaged with numerous cost engineers across various companies. In these discussions, we noticed a significant lack of consistency in how these terms are defined and used. Despite their importance, the confusion around these concepts persists.
In this article, we aim to address these inconsistencies, share our recommendations for resolving them, and invite your perspectives.
To ensure this article resonates with both young professionals and seasoned experts, we’ve divided it into:
🔸Basic Concepts for freshers and non-cost engineers
🔸Common discussion points:
🔹Design Allowance vs Contingency
🔹Contingency Vs Management Reserve
🔹Design Allowance vs Other Allowances
🔹The matrix of Known-Unknown
Dive in, and let’s demystify these critical cost engineering terms together!
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