Preliminary Scope

Contingency is defined as a predetermined amount of money set aside in a project budget to cover unexpected costs, changes, or risks that may arise during the design and/or construction process. Contingency funds serve as a financial buffer to ensure the project can address unforeseen challenges without requiring additional funding approvals. Contingency plays a crucial role in project planning and budgeting.

The integration and management of contingency funds by state DOTs are typically influenced by project delivery methods, risk tolerances, and specific project conditions, whether managed by the owner, shared, or designated to contractors. The interplay between risk assessment/mitigation and contingency allocation also plays a role in the choice of project delivery method.

The objective of this synthesis is to document state DOT practices related to project contingency analysis, development, structure, and use across various project delivery methods, including Design-Bid-Build (DBB), Design-Build (DB), Construction Manager/General Contractor (CM/GC), and Progressive Design-Build (PDB).

Information to be gathered includes (but is not limited to):

• Written guidelines for contingency development and draw-down procedures;
• Methods, tools, and processes used for contingency analysis and risk-based cost estimation for various project delivery methods (e.g., DBB, DB, CM/GC, and PDB);
• Distinction between contingency and allowance in usage;
• Contingency structure and allocation approaches (e.g., owner versus shared pool versus contractor);
• Contingency tracking and management practices; and
• Past performance of project contingency use.

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

Information Sources (Partial)

• 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
Jo Allen Gause
Phone: 202-334-3826
Email: jagause@nas.edu

Meeting Dates
First Panel Meeting: October 2024 (Date TBD)
Teleconference with Consultant: TBD
Second Panel Meeting: TBD