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Contingency sums

222.In estimating construction costs, it is common practice for engineers to include a ‘contingency sum’. This may be done to offset optimism bias, or to avoid the need for additional budgetary approvals if the cost goes over budget, or for other reasons. There is no need to take account of contingency sums where point estimates represent the 50th percentile of a distribution of possible outcomes, or where confidence intervals are used.

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