What is project contigency plan?

Contingency or management reserve is an amount the consultant or the contractor may want to include the unexpected resources that may be overlooked or tasks that may have to be redone because they might not work for the first time. Contingency provision is to cover the elements of unforeseen minor changes in the technical and design specification.

The strategies considered before the execution of the project are pre-project evaluation, sources of finance, qualities of the project, planning helps for the successful project implementation. The other major focal points of project management are cost estimation. Cost estimates, work break down structure and project schedules are interrelated concepts. Once a base line schedule is prepared it is necessary to develop a base line budget.

 

It is important to note that the cost of a work package cannot be estimated because it is too complex and it must be broken down so that appropriate estimate can be made. The initial cost estimate can seal the project fate. If the project cost is over estimated, i.e. unrealistically high then the project may be lost. Accurate cost estimation is difficult task in project management, because it is done in the early planning stages. It is necessary to put practical constraints on project costs so that realistic budgets can be established.

 

The following elements would typically constitute the ingredients of most cost estimates.

 

§ Resource required for the project.
§ Overheads in the technology.
§ Indirect overheads.
§ Profitability from the project.
§ Total expenses.

 

Scheduling and scheduling function are one of the important aspects in project management system. A schedule is a timetable for a plan and therefore cannot be established until the plan has been developed Information technology projects require proper project management discipline in order to collect system requirements, design systems and adequately trained users. When network-planning techniques are used, scheduling depends on the planning function.

 

With projects for which there is a high degree of uncertainty about the activity duration estimates, it is possible to use three duration estimates, an optimistic, a pessimistic, and the most likely. The project schedule control process involves regularly gathering data on project performance, comparing with the planned performance. An inchoate screening of a project idea bequeaths several insights for an in depth investigation.

 

In order to scrutinize further the project proposal. Hence there is a need to conduct a feasibility study and need to estimate the cost of such detailed study. The study is conducted quite exhaustively by exploring many factors related to the project. The budget should tell how the money would be spent over the particular period. In preparing a budget for a project it is necessary to consider the administrative aspects of the project also.

 

1. Identification of investment opportunities.
2. Submission of proposal.
3. Decision-making.
4. Preparation of budget and appropriation.
5. Implementation.
6. Performance review.

 

The objectives and policies guiding the project planning exercise must be articulated. It is the practice in many organizations to prepare the pre project evaluation and reports.

 

§ Purpose of the project as per sanction.
§ Having a clear vision of project objectives.
§ Project approval and execution of the project.
§ Strategies of implementation.
§ Time schedule for the project.
§ Estimated cost of completion of the project.
§ Resource requirement.
§ Setting up an effective control and monitoring the progress of the project.

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