Copyright 2008 AACE, Inc.
AACE International Recommended Practices
AACE International Recommended Practice No. 40R-08
CONTINGENCY ESTIMATING – GENERAL PRINCIPLES
TCM Framework: 7.6 – Risk Management
Acknowledgments:
John K. Hollmann, PE CCE CEP (Author)
Christopher P. Caddell, PE
Michael W. Curran
Larry R. Dysert, CCC CEP
Christopher O. Gruber, CCC
Dr. Kenneth K. Humphreys, PE CCE
Copyright 2008 AACE International, Inc.
AACE International Recommended Practices
AACE International Recommended Practice No. 40R-08
CONTINGENCY ESTIMATING – GENERAL PRINCIPLES
TCM Framework: 7.6 – Risk Management
June 25, 2008
INTRODUCTION
Scope
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.
Purpose
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 wi