CEC Risk Management & Contingencies Flashcards
6 cards from real CEC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CEC Risk Management & Contingencies flashcards as text
In construction estimating, what is a contingency allowance?
Answer: A budget reserve added to cover undefined or unforeseen costs within project scope
A contingency allowance is a planned reserve in the estimate to cover scope uncertainties, design gaps, or minor unforeseen conditions without changing the contract price.
What distinguishes a design contingency from a construction contingency?
Answer: Design contingency addresses incomplete design scope; construction contingency covers field uncertainties during execution
Design contingency accounts for scope gaps in incomplete drawings, while construction contingency covers unforeseen field conditions that arise during physical construction.
Which qualitative risk assessment tool ranks risks by their probability and impact in a matrix format?
Answer: Probability-impact (P-I) matrix
A probability-impact matrix plots each risk on axes of likelihood and consequence severity, allowing teams to prioritize risks requiring the most attention.
A CEC estimator is bidding a project with unstable soil conditions. The BEST risk mitigation strategy is to:
Answer: Include a geotechnical allowance and clearly list assumptions in the bid
Including a geotechnical allowance and documenting soil assumptions in the bid protects the contractor while informing the owner of the uncertainty.
Monte Carlo simulation in construction risk analysis is used to:
Answer: Model a range of possible project cost outcomes based on variable input distributions
Monte Carlo simulation runs thousands of scenarios using probability distributions for uncertain inputs, producing a range and probability distribution of total project costs.
When an owner retains a project contingency (as opposed to the contractor's contingency), the primary purpose is to:
Answer: Cover owner-directed scope changes or unforeseen design modifications
Owner contingency funds owner-initiated scope additions or design revisions, separate from the contractor's construction contingency that covers field unknowns.