{
  "schema": "vedokrok.public-item.v1",
  "release_id": "MHC-RPUB-20260920-75ad787a",
  "url": "/knowledge/build-contingency-from-named-residual-risks",
  "id": "MHC-D-RESEARCH-0625",
  "version": "0.1.0",
  "title": "Build contingency from named residual risks",
  "summary": "A round buffer is easy to add and hard to learn from.",
  "kind": "protocol",
  "body": "List material risks that remain after planned mitigation. For each, state trigger, plausible impact and whether the impact is already inside the base estimate. Use these residual risks—plus empirical forecast error where appropriate—to justify contingency instead of hiding a generic pad in every task.",
  "limits": [
    "Not every risk supports a credible numeric probability; qualitative contingency governance can be more honest than false precision."
  ],
  "topics": [
    "union-project-estimation-and-delivery-realism"
  ],
  "intents": [],
  "source_ids": [
    "RS-F874002E4A58CC3B",
    "RS-B3FC6B5B65061AB3"
  ],
  "evidence": [
    {
      "claim": "The Green Book treats contingency as an allowance for residual risk and remaining optimism bias rather than as an unexamined extra percentage.",
      "source_id": "RS-F874002E4A58CC3B",
      "role": "supports",
      "note": "How contingency is funded, governed and released depends on organization and project type.",
      "locator": "Contingency"
    },
    {
      "claim": "IPA guidance treats identified risks, mitigation costs, residual probability and impact as part of estimating rather than hiding all uncertainty inside the base estimate.",
      "source_id": "RS-B3FC6B5B65061AB3",
      "role": "supports",
      "note": "Qualitative or poorly evidenced probability estimates should not be dressed up as precise expected values.",
      "locator": "Accounting for risk"
    },
    {
      "claim": "The Green Book distinguishes prevention or mitigation costs from contingency for risks that remain after mitigation.",
      "source_id": "RS-F874002E4A58CC3B",
      "role": "supports",
      "note": "Organizations may use different accounting labels; the useful distinction is planned work versus allowance for residual uncertainty.",
      "locator": "Optimism bias and contingency"
    }
  ],
  "use_when": [
    "A team adds 20% to every estimate because projects are uncertain."
  ],
  "avoid_when": [
    "Not every risk supports a credible numeric probability; qualitative contingency governance can be more honest than false precision."
  ],
  "example": "A migration reserve covers possible manual repair after a reconciliation failure, while normal validation effort remains in the base estimate.",
  "check": "A reviewer can trace contingency to uncertainty rather than a habitually padded number.",
  "steps": [
    "Risk is named.",
    "Mitigation is named.",
    "Residual impact is described.",
    "Double counting against base estimate is checked.",
    "Contingency rationale is recorded."
  ],
  "sources": [
    {
      "id": "RS-F874002E4A58CC3B",
      "title": "The Green Book (2026)",
      "url": "https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-government/the-green-book-2026"
    },
    {
      "id": "RS-B3FC6B5B65061AB3",
      "title": "Cost Estimating Guidance",
      "url": "https://www.gov.uk/government/publications/cost-estimating-guidance/cost-estimating-guidance"
    }
  ],
  "relations": [
    {
      "from": "MHC-D-RESEARCH-0625",
      "to": "MHC-D-RESEARCH-0626",
      "type": "useful_with",
      "url": "/knowledge/keep-mitigation-work-out-of-the-hidden-buffer"
    }
  ],
  "collections": [
    {
      "id": "RC-3C67E080415E2677",
      "title": "Estimate the delivery system, not only the hands-on work",
      "url": "/collections/estimate-the-delivery-system-not-only-the-hands-on-work"
    }
  ]
}