Using the Riscor® Model, which is built on Palisade @RISK simulation platform, semi-quantidfied project risk register with quantifiable systemic risks (discrete distribution) is integrated to cost estimate specific risks (continuous distribution) to derive aggregated project contingency. Several risk workshops will be facilitated with SMEs to select, range and simulate estimate specific risks related to each sub-project's cost estimate variables, such as quantities, productivity, crew man hours and materials quotes.
Contingency also captured some applicable indirect costs due to unplanned construction schedule delays. The SRA will be performed independently and in advance of Q.CRA, the results are taken in as inputs to Riscor Model for simulation, and the contingency amount dedicated to schedule delays is convincingly derived.
The combined final project contingency at a given confidence level from systemic risks, specific risks and schedule delays typically reflects the estimate classification and the maturity level and completeness of cost estimate deliverables. In a very rare circumstance, a NEGATIVE contingency may be surprisingly yielded. It should be noted that interface, integration and unpredictable human psychological behaviors plays an important role the Quantitative Risk Analysis (QRA) process, as a portfolio-based contingency is lower than the sum of individually managed project-based contingency.
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