Final Scope

State DOTs are interested in understanding the state of practice for establishing construction contingencies for highway projects. Contingency is defined for the purpose of this synthesis as a predetermined amount of money set aside to cover unexpected costs, changes, or risks that may arise during the project construction phase. Contingency funds serve as a financial buffer to ensure the project can address unforeseen challenges without requiring additional funding approvals.

The integration and management of contingency funds by state DOTs are typically influenced by risk tolerances, specific project conditions, and project delivery methods whether managed by the owner, shared, or designated to contractors.

The objective of this synthesis is to document state DOT practices related to project contingency analysis, development, and use for various project delivery methods, ie. Design-Bid-Build (DBB), Design-Build (DB), Construction Manager/General Contractor (CM/GC), Progressive Design-Build (PDB), and Job Order Contracting (JOC)/Indefinite Delivery, Indefinite Quantity (IDIQ).

For identified project delivery methods, information to be gathered includes (but is not limited to):
• Written guidelines, policies, practices for contingency analysis, development and use;
• Methods, tools, and processes used for contingency analysis and risk-based cost estimation;
• Distinction between contingencies and allowances;
• Contingency tracking and management practices; and
• Past performance of project contingency use.

Information will be gathered through a literature review, a survey of state DOTs, and follow-up interviews with selected DOTs for the development of case examples. Information gaps and suggestions for research to address those gaps will be identified.

Information Sources (Partial)

• Guidance - Cost Estimating - Major Projects - Federal Highway Administration
• NHI Course 134205: Probabilistic Risk-Based Estimating for Highway Project Cost and Schedule
• PD-04 Project Contingencies and Supplemental Work, project delivery directive; https://dot.ca.gov/programs/project-delivery/directives
• FHWA Manuals and resources on project risk assessment, contingency development, and alternative project delivery
• Relevant TRB papers and reports
• State DOT contingency (estimating) and risk management guidelines or procedures
• Industry research and resources (e.g., AASHTO, AACE, DBIA, etc.)

TRB Staff (Consultant)

Sandra Q. Larson
Phone: 515-971-6329
Email: slarson@nas.edu

Meeting Dates
First Panel Meeting: March 13, 2025
Teleconference with Consultant: TBD
Second Panel Meeting: December 4, 2025

Topic Panel

Melissa Ambler, Washington State Department of
Transportation

Brandi Baldwin, Missouri Department of Transportation

Paul Chung, California Department of Transportation

Erika Drury, Kentucky Transportation Cabinet

Kevin Hagness, Minnesota Department of Transportation

Nickie Hunter, New Hampshire Department of
Transportation

Michael James Kennerly, Iowa Department of Transportation

Steven R. Mills, Federal Highway Administration (FHWA)