Appraisal of the Performance of Contingency Cost Provision for Building Projects in Nigeria
The paper appraised performance of contingency allowance in addressing projects’ cost risk. To achieve this aim, impact of contingency provision in some selected building projects were evaluated. Data for the study was collected by means of checklist from 40 completed projects’ files. Furthermore, 100 questionnaires on project cost contingency were randomly distributed to quantity Surveyors out of whom 67 completed responses were returned. The results showed that there is significant difference between projects with and without contingency with respect to the accuracy of cost estimates. The study revealed that although the inclusion of contingency allowance reduces the incidence of project cost overrun, majority of the projects under study (55%) had cost overrun. It was also found that the projects exceeded their initial estimate by an average value of 5.07% where contingency was included and by an average value of 9.52% where contingency was not included. The study showed that there is a lack of application of quantitative risks analysis in the determination of contingency fund. Therefore, to improve the accuracy of cost contingency allowance, application of quantitative risks analysis in its determination has been recommended.
Keywords: Contingency, Risks, performance, Building.