Managing contingency reserves in project schedules and budgets

Even if not explicitly identified as such, almost all project plans include contingency reserves in both budgets and in schedules. Effective management of these contingency reserves is essential in order to prevent overspending and to reduce project duration. The principle of aggregation and its application to the management of contingency reserves are discussed in this paper. Human behavior under conditions of uncertainty plays a major role in the management of contingency reserves and in order to exploit the opportunities that the principle of aggregation offers, these human behaviors have to be taken into account