Drivers of Contingency and Cost Reserve in Cost Risk Analysis

Cost risk analyses play a crucial role in budgeting and decision-making for large-scale public projects. This article investigates the factors that influence the size of contingency and cost reserves derived from such analyses. Based on a dataset of 107 real-life projects in Norway and regression modeling, the study finds that building projects typically have lower relative contingency and cost reserves, likely due to their standardized nature and more predictable cost structures. Projects in early planning phases (QA1) show significantly higher risk buffers, reflecting increased uncertainty and project immaturity. Notably, the identity of the assignment manager shows a significant effect, particularly on cost reserves, indicating the potential impact of individual judgment within group-based analysis processes. While the models explain a moderate share of the variation (R 2 = 0,20/0,32), the findings emphasize both technical and procedural factors that influence the outcomes of cost risk assessments. These insights may support efforts to strengthen methodological consistency and reduce subjective bias in future project evaluations.