Probabilistic Estimation and Allocation of Project Time Contingency
Publication: Journal of Construction Engineering and Management
Volume 137, Issue 4
Abstract
Project managers implement the concept of time contingency to consider uncertainty in duration estimates and prevent project completion delays. Some project managers also build a distribution of the project time contingency into the project activities to create a more manageable schedule. Generally, both the estimation and distribution of the project time contingency are conducted by using subjective approaches. Because the project schedule feasibility mainly depends on the variable behavior of the project activities, the estimate of project time contingency and its allocation at the activity level should be obtained by considering the performance variability of each activity rather than basing on human judgment. In this paper, the stochastic allocation of project allowances method, which is based on Monte Carlo simulation, is proposed to estimate the project time contingency and allocate it among the project activities. The application of this method to a three-span bridge project results in a fair allocation of the project time contingency and provides practical means to control time contingencies at the activity level.
Get full access to this article
View all available purchase options and get full access to this article.
References
AbouRizk, S. M., and Halpin, D. W. (1992). “Statistical properties of construction duration data.” J. Constr. Eng. Manage., 118(3), 525–544.
Antill, J. M., and Woodhead, R. W. (1990). Critical path methods in construction practice, 4th Ed., Wiley, New York.
Ballard, G., and Howell, G. (1995). “Toward construction JIT.” Proc., 11th Annual ARCOM Conf., Association of Researchers in Construction Management, Sheffield, UK.
Barraza, G., and Bueno, A. (2007a). “Cost contingency management.” J. Manage. Eng., 23(3), 140–146.
Barraza, G., and Bueno, A. (2007b). “Probabilistic control of project performance using control limit curves.” J. Constr. Eng. Manage., 133(12), 957–965.
Britney, R. (1976). “Bayesian point estimation and the PERT scheduling of stochastic activities.” Manage. Sci., 22(9), 938–948.
Burger, R. (2003). “Contingency, quantifying the uncertainty.” Cost Eng., 45(8), 12–17.
Chapman, C., and Ward, S. (1997). Project risk management, Wiley, Chichester, UK.
Crandall, K. C. (1976). “Probabilistic time scheduling.” J. Constr. Div., 102(3), 415–423.
Crandall, K. C., and Woolery, J. C. (1982). “Schedule development under stochastic scheduling.” J. Constr. Div., 108(2), 321–329.
Galindo, A. (2000). “Probabilistic project control based on contingency management.” M.S. thesis, Dept. of Civil Engineering, Instituto Tecnológico y de Estudios Superiores de Monterrey, Nuevo Leon, Mexico.
Galloway, P. (2006). “Survey of the construction industry relative to the use of CPM scheduling for construction projects.” J. Constr. Eng. Manage., 132(7), 697–711.
Grey, S. (1995). Practical risk assessment for project management, Wiley, Chichester, UK.
Leach, L. (2003). “Schedule and cost buffer sizing: How to account for the bias between project performance and your model.” Proj. Manage. J., 34(2), 34–47.
Lee, D., and Arditi, D. (2006). “Automated statistical analysis in stochastic project scheduling simulation.” J. Constr. Eng. Manage., 132(3), 268–277.
Lee, S., Peña-Mora, F., and Park, M. (2006). “Reliability and stability buffering approach: Focusing on the issues of errors and changes in concurrent design and construction projects.” J. Constr. Eng. Manage., 132(5), 452–464.
Moselhi, O. (1997). “Risk assessment and contingency estimating.” American Association of Cost Engineers International Transactions, Morgantown, WV, 6.1–6.6.
Neil, J. N. (1989). “Management of project risks and uncertainties.” Publication 6–8, Construction Industry Institute, Univ. of Texas at Austin, Austin, TX.
Peña-Mora, F., and Park, M. (2004). “Reliability buffering for construction projects.” J. Constr. Eng. Manage., 130(5), 626–637.
Pollack, B., and Liberatore, M. (2005). “Project planning under uncertainty using scenario analysis.” Proj. Manage. J., 36(1), 15–26.
Project Management Institute (PMI). (2004). A guide to the project management body of knowledge, 3rd Ed., PMI, Newtown Square, PA.
Sha’ath, K. K., and Singh, G. (1994). “A PC-based stochastic project scheduling and costing module.” Proc., Computing in Civil Engineering, ASCE, New York, 9–16.
Smith, G., and Bohn, C. (1999). “Small to medium contractor contingency and assumption of risk.” J. Constr. Eng. Manage., 125(2), 101–108.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 137 • Issue 4 • April 2011
Pages: 259 - 265
Copyright
© 2011 American Society of Civil Engineers.
History
Received: Apr 27, 2009
Accepted: Aug 25, 2010
Published online: Aug 31, 2010
Published in print: Apr 1, 2011
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.