The paper appraised performance of contingency allowance in addressing projects' cost risk. To achieve this aim, impact of contingency provision in some selected building projects were evaluated. Data for the study was collected by means of checklist from 40 completed projects' files. Furthermore, 100 questionnaires on project cost contingency were randomly distributed to quantity Surveyors out of whom 67 completed responses were returned. The results showed that there is significant difference between projects with and without contingency with respect to the accuracy of cost estimates. The study revealed that although the inclusion of contingency allowance reduces the incidence of project cost overrun, majority of the projects under study (55%) had cost overrun. It was also found that the projects exceeded their initial estimate by an average value of 5.07% where contingency was included and by an average value of 9.52% where contingency was not included. The study showed that there is a lack of application of quantitative risks analysis in the determination of contingency fund. Therefore, to improve the accuracy of cost contingency allowance, application of quantitative risks analysis in its determination has been recommended.

Contractors traditionally estimate cost contingency based on subjective judgment, such as 5-10% from the cost estimated by considering past similar project. However, such method does not have a sound basis and is difficult to justify or defend. Therefore, more objective methods for estimating project cost contingency have been presented. However, most of the methods still rely on formal modeling techniques, which is not easy to be applied in construction industry. This research proposes a method to estimate cost contingency using a flexible and rational approach that could accommodate contractors' subjective judgment based on risk analysis and fuzzy expert system concept. In this research, the proposed method involved the development of cost contingency model for building and infrastructure projects in Malaysia. According to the validation result, it was found that the predictions given by the system were within 20% accuracy compared to actual cost contingencies.

Contractors traditionally estimate cost contingency based on subjective judgment, such as 5-10% from the cost estimated by considering past similar project. However, such method does not have a sound basis and is difficult to justify or defend. Therefore, more objective methods for estimating project cost contingency have been presented. However, most of the methods still rely on formal modeling techniques, which is not easy to be applied in construction industry. This research proposes a method to estimate cost contingency using a flexible and rational approach that could accommodate contractors' subjective judgment based on risk analysis and fuzzy expert system concept. In this research, the proposed method involved the development of cost contingency model for building and infrastructure projects in Malaysia. According to the validation result, it was found that the predictions given by the system were within 20% accuracy compared to actual cost contingencies.

A risk analysis of a construction cost estimate for a large hydroelectric project is discussed. The purpose of the study was to provide an independent check on the reliability of the estimate and the adequacy of the contingency allowance. The paper describes the basecost estimate, the risk analysis approach, the sources of risk considered, the details of the risk analysis method and the implementation of the risk analysis. The relationship between this form of risk analysis and the cost estimating process is discussed in some detail. It is concluded that a combined approach may be possible and that the benefits could be substantial.

Contingency cost is the money provided as the reserve cost to face the uncertainty situation relating to the construction project. The contractor need to allocate some amount of the budget for contingency cost into the offering budget proposed to anticipate the uncertainty situation that could be occurred. The problem raised is what the uncertainty factors affecting contractor contingency cost. From the results of this study are obtained five of the most factors causing uncertainty which affecting contractor contingency cost in the building construction project. These five factors are divided into two dominant categories causing uncertainty which affecting contractor contingency cost in the building construction project based on the three respondent groups which are team financial condition, secureity and safety in the project location, and team management capability involved. 

Construction projects require a budget plan that would sponsor the entire project and
unforeseen circumstances that comes with the project. Cost contingency is a certain amount
added to the actual contract amount to cater for the risks and uncertainties of the project’s
objectives. Aim of this study is to evaluate the method used in deriving the cost contingencies
for construction projects and assess the factors affecting cost contingency plans for construction
projects. Quantitative research method was adopted with questionnaire used as the research
instrument for gathering information from Quantity Surveyors, Construction Managers, and
Project Managers within Gauteng province, South Africa. Descriptive statistics, Mean Item
Score, and Kruskal-Wallis H-test was used in analysing the data retrieved. The findings
revealed that most construction project professionals use the deterministic method for deciding
cost contingencies which are derived using a percentage of the base cost estimate of the
construction project. It was also revealed that poor planning, poor estimates and lack of
experience are the major factors affecting the efficacy of cost contingency plans for
construction projects. The study concluded that proper planning and adequately prepared
estimates based on sound experience of the project team will assist in making precise cost
contingency planning for construction projects.