Amount Of Contingency Research Articles

Regression-based model predicting cost contingencies for road network projects

Cost contingencies represent a significant markup percentage for construction projects. Many construction projects experience cost overruns due to unexpected events before or during the construction phase. Determining the cost contingency for construction projects is one of the most frequent and widespread financial problems many countries face. Since the amount included in the estimates is always insufficient to absorb the actual cost overruns of the project. The main objective of this paper is to develop a simple realistic regression model for predicting the appropriate contingency amount for road network projects before the bidding stage. The regression model has been developed based on data from real case studies for 75 road network projects to adequately consider all potential risks may face the project. Good-of-fit tests were used to select the best-fitting statistical distribution for a given dataset. Based on the analysis of selected data, the log-logistic probability distribution function is the best-fit curve representing cost overrun behavior, and the cumulative distribution function has been used to determine the realistic probability of incurred cost overrun. Based on the analysis of real case studies, it is suggested that an average of 59.722% be used as a cost overrun contingency amount for road network projects. The study outcomes will help practitioners and researchers improve future accuracy/calculations of contingency amount for road construction projects and improve the decision-making process.

Supervised learning to covering cost risk through post-construction evaluation of transportation projects by project delivery methods

PurposeThe main objectives of this study are to (1) develop and test a cost contingency learning model that can generalize initially estimated contingency amounts by analyzing back the multiple project changes experienced and (2) uncover the hidden link of the learning networks using a curve-fitting technique for the post-construction evaluation of cost contingency amounts to cover cost risk for future projects.Design/methodology/approachBased on a total of 1,434 datapoints collected from DBB and DB transportation projects, a post-construction cost contingency learning model was developed using feedforward neural networks (FNNs). The developed model generalizes cost contingencies under two different project delivery methods (i.e. DBB and DB). The learning outputs of generalized contingency amounts were curve-fitted with the post-construction schedule and cost information, specifically aiming at uncovering the hidden link of the FNNs. Two different bridge projects completed under DBB and DB were employed as illustrative examples to demonstrate how the proposed modeling framework could be implemented.FindingsWith zero or negative values of change growth experienced, it was concluded that cost contingencies were overallocated at the contract stage. On the other hand, with positive values of change growth experienced, it was evaluated that set cost contingencies were insufficient from the post-construction standpoint. Taken together, this study proposed a tangible post-construction evaluation technique that can produce not only the plausible ranges of cost contingencies but also the exact amounts of contingency under DBB and DB contracts.Originality/valueAs the first of its kind, the proposed modeling framework provides agency engineers and decision-makers with tangible assessments of cost contingency coupled with experienced risks at the post-construction stage. Use of the proposed model will help them evaluate the allocation of appropriate contingency amounts. If an agency allocates a cost contingency benchmarked from similar projects on aspects of the base estimate and experienced risks, a set contingency can be defended more reliably. The main findings of this study contribute to post-construction cost contingency verification, enabling agency engineers and decision-makers to systematically evaluate set cost contingencies during the post-construction assessment stage and achieving further any enhanced level of confidence for future cost contingency plans.

Appropriate budget contingency determination for construction projects: State-of-the-art

Contingency is a critical component in the cost estimation process for any construction project. The contingency reserve considers potential costs related to risks and uncertainties associated with construction projects. It is usually assumed to damp any resulting uncertain monetary impact and to prevent project cost overrun. Many contingency calculation methods for construction projects proposed in literature ranged from simple percentage to complex mathematical methods. Deciding the optimum contingency method for a given project at a given phase represents the main challenge in cost estimation process. This study presents a comprehensive compilation of all contingency calculation methods and divided them into three main groups: deterministic, probabilistic, and modern mathematical methods which have been discussed in details. Appropriate method for estimating contingency amount depends on many criteria such as project peculiarity, complexity, ease of method used, and the accuracy level of the estimates. This study proposed a practical guidance approach for construction agencies to choose their appropriate cost contingency method.This research is expected to help agencies/owners in the budget development stage to allocate a contingency budget for their construction projects.

Methodology of Estimating Construction Projects Contingency

Most construction projects suffer from many change orders during the construction period of the project and that leads to allocate more funds to cover these changes. Determining the amount of this fund by the owner is difficult due to the uncertainties in the construction project. On the other side, these allocated funds mean a restriction to valuable money that could be used for other financial activities. In this paper, a proposed methodology is suggested estimating the project contingency instead of the traditional approach of adding fixed value based on the contract value of the project. This methodology makes sure that minimum contingency is allocated through analyzing data from previous similar projects and identify the most activities causing change orders (consume contingency) then take actions in the planning stage to organize these activities and ensure their execution within the budget allocated. The amount of contingency could be determined based on the previous information. This methodology applied on a case study consists of seven construction projects in Tikrit University and the application indicates that adopt a scientific approach (such as this methodology) in estimating the amount of project contingency could increase the precision of estimation and minimize the contingency amount.

In Case You Haven't Heard…

While SAMHSA has kept the $75 cap in the new round of SOR grants, there are two changes from the former grant announcement. 1) In Appendix G, Standard Funding Restrictions, there is a bolded note which now states “The contingency amounts are subject to change.” Whether SAMHSA is preparing to announce such a change is a mystery as of last week. 2) However, the State SOR grant announced on May 19, 2022 referred to safeguards. “To mitigate the risk of fraud and abuse, while also promoting evidence‐based practice, recipients who plan to implement contingency management (CM) interventions as part of their SAMHSA grant award will be required to comply with the following conditions.” It would seem to be difficult, if not impossible, for SAMHSA to continue to insist on the value of $75 while at the same time imposing the administrative burden of safeguards. That administrative burden would discourage states from pursuing CM unless the effort was worth it. An appendix now includes the safeguards and critical elements that the Motivational Incentives Policy Group [see High‐powered group calls on HHS to negate SAMHSA's $75 CM limit, May 23; https://onlinelibrary.wiley.com/doi/10.1002/adaw.33437] has been promoting all along. Stay tuned.

Pumped-storage units to address spinning reserve concerns in the grids with high wind penetration

Abstract The low predictability of hourly available power of wind turbines and their volatile output, cause multiple hardships in the power system which are supposed to be handled by means of keeping a higher amount of contingency and regulation reserve. The intensified reserve requirement along with operational constraints may enforce wind-farms to operate below their maximum available power. It's shown that Pumped-Storage systems, not merely as storage capacity, but also as a high-quality reserve providers make the power system capable to lessen wind power curtailment. It is investigated how increasing the reserve requirement may restrict the overall renewable production and how Pumped-Storage can relieve this restriction. The Pumped-Storage system is precisely modeled based on Siahbisheh, a 1000 MW Pumped-Storage system in northern part of Iran. The soundness of the obtained results is fortified by using actual technical data based on Manjil wind-farm, and other active generating units in Iranian power system, as well as actual prices from the historical records of Iran Wholesale Electricity Market. As well as IEEE 24-Bus test system, the performance of Pumped-Storage system is analyzed on the actual network of Gilan Province in Iran.

What Enables a High-Risk Project to Yield High Return from a Construction Contractor’s Perspective?

“High risk high return” is a general rule in the overall industry; however, high-risk projects in the construction industry frequently fail to yield a high return. In order to achieve a sustainable business in the international construction market, contractors require an average to high return yield under high-risk conditions. This study aims to reveal what risk factors and risk management performance enables high-risk projects to yield high returns. The study investigated 124 international construction projects by Korean contractors and classified them into four groups: high-risk high-return (HH), high-risk low-return (HL), low-risk high-return (LH), and low-risk low-return (LL). The study found that risk assessment accuracy was the most important trigger in discriminating between high return projects (HH, LH) and low return projects (HL, LL), whereas risk mitigation performance showed little difference between high return and low return projects. In addition, the contingency amount did not significantly affect project return in HL, LH, and LL projects, but HH projects showed a positive relation between contingency and predicted risk amount. This article contributes to recognizing the differences between high return and low return projects and provides insights for practitioners into the relation between risk management performance and high returns in different risk conditions.

Vocal Learning via Social Reinforcement by Infant Marmoset Monkeys

For over half a century now, primate vocalizations have been thought to undergo little or no experience-dependent acoustic changes during development [1]. If any changes are apparent, then they are routinely (and quite reasonably) attributed to the passive consequences of growth. Indeed, previous experiments on squirrel monkeys and macaque monkeys showed that social isolation [2, 3], deafness [2], cross-fostering [4] and parental absence [5] have little or no effect on vocal development. Here, we explicitly test in marmoset monkeys-a very vocal and cooperatively breeding species [6]-whether the transformation of immature into mature contact calls by infants is influenced by contingent parental vocal feedback. Using a closed-loop design, we experimentally provided more versus less contingent vocal feedback to twin infant marmoset monkeys over their first 2months of life, the interval during which their contact calls transform from noisy, immature calls to tonal adult-like "phee" calls [7, 8]. Infants who received more contingent feedback had a faster rate of vocal development, producing mature-sounding contact calls earlier than the other twin. The differential rate of vocal development was not linked to genetics, perinatal experience, or body growth; nor did the amount of contingency influence the overall rate of spontaneous vocal production. Thus, we provide the first experimental evidence for production-related vocal learning during the development of a nonhuman primate.

Proactive tactical planning approach for large scale engineering and construction projects

Large-scale engineering and construction projects are subject to a great level of uncertainty which lead planners to use time buffers and add contingencies to the estimated budget. However, the size of the buffers and the contingency amounts are usually arbitrarily established and projects still encounter severe time and cost overruns. In this paper, a robust planning approach for tactical planning of large-scale engineering and construction projects is proposed. The approach relies on a simple resource buffering strategy applied to the aggregate periods. An extensive simulation-based experiment was conducted to test the robustness and performance of the proposed approach. Results show that the proposed buffering strategy can considerably reduce project cost variations and can provide comparable performance results with those obtained using a disaggregated approach, especially on instances characterized by a large number of resource groups.

Gregory’s Sixth Operation

In relation to a thesis put forward by Marx Wartofsky, we seek to show that a historiography of mathematics requires an analysis of the ontology of the part of mathematics under scrutiny. Following Ian Hacking, we point out that in the history of mathematics the amount of contingency is larger than is usually thought. As a case study, we analyze the historians' approach to interpreting James Gregory's expression ultimate terms in his paper attempting to prove the irrationality of pi. Here Gregory referred to the last or ultimate terms of a series. More broadly, we analyze the following questions: which modern framework is more appropriate for interpreting the procedures at work in texts from the early history of infinitesimal analysis? as well as the related question: what is a logical theory that is close to something early modern mathematicians could have used when studying infinite series and quadrature problems? We argue that what has been routinely viewed from the viewpoint of classical analysis as an example of an "unrigorous" practice, in fact finds close procedural proxies in modern infinitesimal theories. We analyze a mix of social and religious reasons that had led to the suppression of both the religious order of Gregory's teacher degli Angeli, and Gregory's books at Venice, in the late 1660s.

Exposing Uncertainty in Bid Preparation of Steel Construction Cost Estimating: II. Comparative Analysis and Quantitative C-I-V-I-L Classification

AbstractBid prices vary greatly based on assumptions about uncertain conditions. In steel construction bidding, the contingency amount is typically used as a bid line item to factor in the unexpected—including impact of uncertainty—to the lump-sum bid price. Therefore, the goal of this research is to explore the impacts of uncertainties that contribute to contingency amounts. The costs of uncertainties in bid documents of several real-world school projects have been calculated. Contributions to the body of knowledge are (1) providing illustrative examples of real-world uncertainties from the data set; (2) statistically analyzing the relative occurrence and cost significance to increase estimators’ awareness when they evaluate uncertainties; and (3) comparing the cost significance from the data with officially recommended contingency percentages. This research enables steel estimators to make quantitative-based decisions on contingencies in their estimates should various major types of uncertainties arise ...

Dynamic Management of Cost Contingency: Impact of KPIs and Risk Perception

Risks are inherent in construction projects. In order to manage risks, contingency amount is set aside usually in an escrow account. Cost contingency can be a handsome amount that would get blocked during the execution of the project for further use, incurring constant opportunity cost. The stakeholders may wish to use this held amount for other endeavors during project execution. The managerial practices for dynamic contingency management are of extreme importance. Stakeholders anticipate risks and hindsight project performance by eyeing key performance indicators of a project to direct decisions. The aim of this research is to integrate project key performance indicators with future risk perception to develop a decision support system for facilitating cost contingency release requests. The model is expected to help decision making to ease the managerial burden ensuring effective use of contingency. The findings are not conclusive due to ongoing nature of research.

La política como representación en Marx. Una Interpretación de sus obras histórico-políticas.

This article offers an interpretation, one among many other possible, of the Las Luchas de clases en Francia (1850) and El dieciocho brumario de Luis Bonaparte (1852). Our hypothesis is that in Marx’s political analysis politics are necessarily linked to representation and is unconceivable without it. Taking as the connecting thread the metaphor of the scenario used by Marx to understand politics, in the first part we scrutinize the books looking for the role of political action in dialogue with Marx’s economicist readings. Marx represents politics as a theater, but it doesn’t mean he demotes it to a secondary position. Although action is produced among constrains left from past and from the class conflicts, he does not overlook that it also has a considerable amount of contingency. In the second part, we examine what, keeping with metaphor, could be denominated the “characters” and their “scripts”, it means, the way Marx conceptualizes the subjects that are present in the political scene and the problems raised by the representation of their interests. These characters are the classes, the class’ frictions and the parties, defined both in relation to their objective interests and to their struggles. Amid these interests (scripts) and their representation, there is an hiatus, which makes representatives to have some room for manoeuvre to reformulate (improvise) interests according to power relationships. Consequently, such interests cannot be produced apart from the dynamic of representation

Factors affecting cost contingency in the construction industry – Contractors' perspective

The main objectives of this paper are to identify the major factors affecting cost contingency amount, evaluate their impact on cost contingency and their degree of consideration in bid estimates by construction contractors in the Gaza Strip. A questionnaire was developed to identify contractors' viewpoints regarding the impact of the identified 61 factors on cost contingency amount and their degree of consideration in bid estimation. These factors were categorized into 12 groups. Border and tunnels closure was ranked as the most important factor that impacts the cost contingency amount; it was also ranked by the respondents in the first position that is considered by local contractor in bid estimation process. The findings of this research will help the contractors in pricing cost contingency more efficiently by realizing the top most factors that impact the cost contingency amount. It will also help the donors and clients in identifying the base reasons of increasing contractor bid estimate and taking the required procedures to avoid it. Contractors should identify and evaluate the reasons for using cost contingency amount during the estimate process. Contractors are advised to prepare a method statement and work plan for each project taking into consideration its reality, complexity and type. Project resources such as materials and equipment should be assessed and planned throughout estimate preparation process.

A comparison of fuzzy logic and multiple regression analysis models in determining contingency in international construction projects

Purpose – The main objective of this paper is to show how fuzzy logic and multiple regression analysis (MRA) techniques can be used by construction companies for determining the size of contingency that will be included in bid prices for international construction projects in a more systematic way and to compare their modelling performances. Design/methodology/approach – The steps followed in the execution of this study mainly consists of: conducting a literature review on international construction in order to identify the factors that may affect contingency amounts that will be included in bid prices for international construction projects; developing the general framework of the proposed contingency estimation model; designing a questionnaire based on the information gathered from the literature review, delivering these questionnaires to construction experts, and obtaining the actual data of 36 international construction projects; developing a fuzzy logic model based on expert judgments and three multi...

Synthesis of Performance Measures for Highway Cost Estimating

The use of performance measures for evaluating projects or agencies as a whole is not a new idea. Performance measures have been in use for many years in the private and public highway construction sectors for a variety of areas and tasks. The American Recovery and Reinvestment Act of 2009 (ARRA) and federal transportation funding are now requiring state highway agencies to develop and document performance measures throughout their agency operations. However, few highway agencies use performance measures for cost estimating. This study synthesizes, categorizes, and validates existing performance measures for cost estimating of highway projects to assist with improving estimating accuracy. It provides a foundation for the development and use of new performance measures that agencies can share and use to improve estimating procedures. Performance measures for estimating were developed through an extensive literature review and content analysis to synthesize measures specifically for cost estimating in addition to categorizing the cost-estimating performance measures. These categories and performance measures were then validated with a questionnaire and interviews of selected state highway agency estimating experts. The main categories for these performance measures are bidding accuracy, estimating accuracy, competition effects, estimating processes, and contingency amounts. The results then provide a comprehensive list of valid performance measures for cost estimating in use today by highway agencies and a foundation for developing future measures.

The cost of a large-scale hollow fibre MBR

A cost sensitivity analysis was carried out for a full-scale hollow fibre membrane bioreactor to quantify the effect of design choices and operational parameters on cost. Different options were subjected to a long term dynamic influent profile and evaluated using ASM1 for effluent quality, aeration requirements and sludge production. The results were used to calculate a net present value (NPV), incorporating both capital expenditure (capex), based on costs obtained from equipment manufacturers and full-scale plants, and operating expenditure (opex), accounting for energy demand, sludge production and chemical cleaning costs. Results show that the amount of contingency built in to cope with changes in feedwater flow has a large impact on NPV. Deviation from a constant daily flow increases NPV as mean plant utilisation decreases. Conversely, adding a buffer tank reduces NPV, since less membrane surface is required when average plant utilisation increases. Membrane cost and lifetime is decisive in determining NPV: an increased membrane replacement interval from 5 to 10 years reduces NPV by 19%. Operation at higher SRT increases the NPV, since the reduced costs for sludge treatment are offset by correspondingly higher aeration costs at higher MLSS levels, though the analysis is very sensitive to sludge treatment costs. A higher sustainable flux demands greater membrane aeration, but the subsequent opex increase is offset by the reduced membrane area and the corresponding lower capex.

Discriminant Analysis for Predicting Ranges of Cost Variance in International Construction Projects

Unanticipated market conditions as well as project-related risks can easily lead to cost overruns in international construction projects. For a contractor to be financially successful in international projects, a careful examination of the project is a prerequisite to understanding the cost variance characteristics. Based on the reasonably accurate characterization of the cost performance, the markup or contingency amount is determined to ensure both a decent level of profit and a good chance of winning the contract. This paper presents a classification model to categorize international construction projects, particularly faced by Korean contractors, into five cost-variation classes: extreme cost overrun, moderate cost overrun, neutral, moderate cost saving, and extreme cost saving. The model is able to characterize an international project for its cost performance prediction in comparison to the contractor’s initial cost estimate. A linear discriminant analysis is utilized to develop the predictive classification model with the support of the bootstrap method. Tests show that the proposed model is able to help cost estimators determine a proper level of cost contingency before bidding on an international project.

Pilot Tunnels: Contractor's Position

Geologic uncertainty in underground construction promotes design and construction conservatism and has a significant impact on project cost. Site investigation can reduce this uncertainty and decrease the contingency amounts included in bids. Pilot tunnels are one of the best geologic exploration methods, but they are also one of the most expensive. This paper presents the contractor's view concerning the usefulness of constructing a pilot tunnel as part of the site investigation program and offers guidelines for evaluating its benefits. These benefits can be realized both prior to and during construction. They include furnishing information about the geology and its behavior, and facilitating design development and construction operations. Pilot tunnels are generally most useful in large projects with limited surface access, and where the geologic conditions are unfavorable. Depending on project conditions, the construction of a pilot tunnel can reduce bid contingencies up to 20% of the project cost.

Geologic Exploration and Risk Reduction in Underground Construction

Geologic uncertainty in underground construction promotes design and construction conservatism and has a significant effect on project cost. Site investigation can reduce this uncertainty and decrease costs by reducing the contingency amounts included in bids. This paper presents research findings that provide a better understanding of how subsurface exploration and improved contractual risk sharing can decrease the cost of underground projects. Issues discussed include: the methodology used by tunneling contractors to estimate geologic profiles given a set of available geologic information; the geologic classification methods used to associate the expected profile with acceptable construction alternatives; the spatial prediction of ground classes and the extents over which different excavation and support methods will be necessary; the factors involved in selecting the initial support, the excavation round length and the estimation of the advance rate; the relationship between exploration, risk allocation, and bidding behavior; the impact of changed conditions clauses in underground construction contracts; the merits of using well-defined geologic conditions as a basis in unit price contracts; and the magnitude of bid contingencies that are actually used in practice.