Project Contingency Reserve Fair Share Determination

Presented by

Dr. Steve Van Drew

About this talk

You’ve built a comprehensive project cost estimate that accounts for significant risks and uncertainties. The project baseline uses most likely values provided by those responsible for each control account/WBS element. A contingency reserve has been determined from cost risk/uncertainty analysis simulation results in conjunction with either the PM’s tolerance for risk or corporate policy. These funds have been earmarked for use by the PM as needed. NICE WORK! But … in the back of your mind is a nagging concern that some of those involved may be trying to game the process. If only there was a way to judge when an area of risk or uncertainty was diving too deep into the pool of contingency funds. This webinar will demonstrate a technique for determining proportionate “fair share” amounts, a procedure called WBS allocation in some cost estimating circles, that can be used to help manage these funds. The technique incorporates @RISK simulation results including tornado graphs and statistic functions.

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