Appraisal of risk contingency planning for construction projects

Abstract

Abstract Risk contingency plan in a construction project allows for flexibility and effective responses to change orders and unforeseen risks arising at the construction phase of projects. A poor risk contingency allowance can result in cost overrun on a project as well as time overrun. However, a good risk contingency plan can be tailored based on the previous similar projects while taking into consideration the individuality of that particular project. The aim of the study is to review risk contingency planning for construction projects. Secondary data was used in carrying out this research study. Extant literatures were reviewed carefully for proper understanding of the methods used in carrying out risk contingency estimation, the importance of risk contingency to construction projects, the categories of risk contingency plans and the factors affecting the accuracy of risk contingency for construction projects. The study revealed and concluded that risk contingency serves as the extra budget that caters for uncertainties which can lead to cost overrun on construction projects thereby affecting the accuracy of the preliminary estimate. It was recommended that risk evaluation must be done appropriately at the planning phase of the construction project, so that the estimator can have more information necessary to factor into the estimation process thereby increasing the accuracy of the estimate prepared.