When making contingency estimates, the contractor should
A) estimate the amount to mitigate high impact and probable issues.
B) include an amount for each issue that has high impact.
C) include a small amount for each possible issue.
D) heavily pad the estimates to include every issue.

Question

Quizplus · Accepted Answer

When making contingency estimates, it is best to estimate the amount to mitigate high impact and probable issues. This approach ensures that funds are reserved for the most critical issues that could cause significant delays or cost overruns. Including a small amount for each possible issue or heavily padding the estimate to include every issue may result in unnecessary funds being allocated, reducing the project's overall profitability. Including an amount for each issue that has high impact may not be practical, as too many high-impact issues could arise, and the contingency funds would be quickly depleted.

When Making Contingency Estimates, the Contractor Should