1、Designation: E2168 10 (Reapproved 2016)Standard Classification forAllowance, Contingency, and Reserve Sums in BuildingConstruction Estimating1This standard is issued under the fixed designation E2168; the number immediately following the designation indicates the year oforiginal adoption or, in the
2、case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. Asuperscript epsilon () indicates an editorial change since the last revision or reapproval.INTRODUCTIONIn building construction estimating the terms allowance, contingency, and reserve are of
3、ten usedalmost interchangeably and are assumed to be universally understood, yet they often mean differentthings to different people. Consequently they can be ambiguous in meaning and intent.Applying these terms, as classified herein, adds a needed precision and rigor in their use as eachterm is hel
4、d to be specific in its meaning, intent, and use.1. Scope1.1 This classification establishes a classification forallowance, contingency, and reserve sums used in construction,project, and program estimating.1.2 This classification applies to all construction work.1.3 This classification is not based
5、 on permanent physicalelements of construction (as defined and classified in Classifi-cation E1557). Rather, the classification items are cost compo-nents common to construction, project, and program estimates.2. Referenced Documents2.1 ASTM Standards:2E631 Terminology of Building ConstructionsE833
6、Terminology of Building EconomicsE1557 Classification for Building Elements and RelatedSiteworkUNIFORMAT IIE1804 Practice for Performing and Reporting Cost AnalysisDuring the Design Phase of a ProjectE1946 Practice for Measuring Cost Risk of Buildings andBuilding Systems and Other Constructed Projec
7、tsE2013 Practice for Constructing FAST Diagrams and Per-forming Function Analysis During Value Analysis Study3. Terminology3.1 DefinitionsFor definitions of terms used in thisclassification, refer to Terminologies E631 and E833.4. Significance and Use4.1 When preparing construction, project, and pro
8、gram costestimates, it is often necessary to make monetary provision forchange or risk, or both, or other exigencies where informationis incomplete.4.2 Such allowance, contingency or reserve sums are em-ployed by many persons engaged in the planning, delivery, andfinancing of construction work.4.3 T
9、hese users include owners, developers, facilitiesprogrammers, cost planners, estimators, schedules, architectsand engineers, specification writers, operating and maintenancestaff, manufacturers, educators, financial managers, and comp-trollers.4.4 Usage:4.4.1 These sums are especially appropriate wh
10、en perform-ing the following activities:Cost budgeting;Conceptual, design, and construction cost estimating;Preparing complete forecast cost for economic evaluation,investment analysis, and approval; andControlling cost during planning, design, and construction.4.4.2 In any of these activities a nee
11、ded requirement, orcomponent, of the planned construction can be known whilethe defined solution, design or specification, for providing thismay not. The usual, and appropriate, response in thesesituations, is the inclusion of a monetary sum, within anestimate, to provide for this (these) requiremen
12、t(s).4.4.3 Such sums may be general or specific in scope, may beplanned to be spent or may only be included as possiblemitigation for unplanned events and requirements.1This classification is under the jurisdiction of ASTM Committee E06 onPerformance of Buildings and is the direct responsibility of
13、Subcommittee E06.81on Building Economics.Current edition approved May 1, 2016. Published May 2016. Originallyapproved in 2001. Last previous edition approved in 2010 as E2168 10. DOI:10.1520/E2168-10R16.2For referenced ASTM standards, visit the ASTM website, www.astm.org, orcontact ASTM Customer Ser
14、vice at serviceastm.org. For Annual Book of ASTMStandards volume information, refer to the standards Document Summary page onthe ASTM website.Copyright ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States14.4.4 To distinguish between these sums, and
15、 in recognitionof their differing purpose, they are described, and classifiedhere, using the terms allowance, contingency, or reserve.NOTE 1Section 5 includes a generic statement of purpose for each ofthe three terms and provides a sub-classification that distinguishesbetween sums included for speci
16、fic purposes and for non-specific, that is,general purposes. In cost budgeting, conceptual and design estimatingespecially, an estimator may intuitively recognize the need for a generalpurpose sum. This recognition comes in the absence of any known specificrequirement other than the need to ensure t
17、he estimate total is a reasonedforecast of a reasonable bid result.4.5 This classification defines allowance, contingency, andreserve sums as items common to construction, project, andprogram estimates through planning, design, construction, andcompletion. The terms are sufficiently generic to be ap
18、plied inall forms of construction work.5. Basis of Classification5.1 Classification Criteria:5.1.1 The selected classification of terms is based on thefollowing criteria. The terms shall:Be readily distinguishable one from the other,Be simple and must identify their properties and usage directly,Be
19、appropriate in all forms of construction financial activities, andAllow a distinction between the environments (internal or external)within which they are applied.5.2 Primary Classification:5.2.1 AllowanceA sum of money that is intended to bespent on the planned scope of work. Used in the absence of
20、precise knowledge, and estimated, to the best of ones abilities,to ensure a full and complete estimate. Allowances coverevents and activities that are normally internal and so aredirectly controllable within the project plan.5.2.2 ContingencyA sum of money that is provided tocover the occurrence of
21、unintended departures from theplanned scope of work. Used in the absence of preciseknowledge, and estimated, to the best of ones knowledge toensure that a financial buffer is available within a budget.Contingencies assist in mitigating the effects of unplannedevents and other risks that are external
22、 to, and are not directlycontrollable within, a project plan.5.2.3 ReserveA sum, usually held by management (client)to be disbursed only when project requirements are changed.Used to provide insurance against a project or program failingto complete on budget or for the revision of a budget in the ca
23、seof changed management or program direction and requirement.NOTE 2For the purposes of the classification an internal environmentis that which exists within an organization. An internal environment mayreadily allow cost control through revision of design or specification, orboth. External environmen
24、t changes impact the project cost and may bethe result of contractual obligation, uncovered site conditions or changedlegislation, for example. External environment changes may allow little orno opportunity for mitigation.5.3 Secondary Classification:5.3.1 Each of the Primary Classifications may be
25、furthersub-classified as:5.3.2 SpecificWhere the content of a sum is uniquelyidentified and the sum is calculated solely for that distinctpurpose, and5.3.3 Non-SpecificWhere the content of a sum is onlybroadly identified and the sum is calculated for application tothat general purpose.NOTE 3Referenc
26、e should also be made to Practice E1946, whichdescribes a formal methodology for estimating the amount of each sum.NOTE 4For examples of specific allowance items refer to PracticeE1804.5.4 Classifications in Context:5.4.1 Placing these classifications in the context of typical/generic usage provides
27、 an additional understanding of thedistinctions between the classified terms.5.4.2 Table 1 is a tabulation of the basic properties, eventsand methods defined for allowances, contingencies, and re-serves as typically applied in the building construction indus-try. This table identifies the key differ
28、ences, and somesimilarities, makes for easy identification of the generic prin-ciples driving the classifications, and so allows consistentapplication. It also draws attention to the need for a subsidiaryTABLE 1 Classification of Allowance, Contingency, and ReserveTypical ApplicationAllowance Contin
29、gency Reserve1. Intend to spend? Yes No No2. Applied to work actions that are: Intended Unintended At Client Discretion3. Expenditure is effected by:Internal Change Yes No NoExternal Change No Yes NoManagement (Client) Change No No Yes4. Is an integral part of:Construction Estimate Yes No NoProject
30、Estimate Yes Yes NoProgram Estimate Yes Yes Yes5. Commitment Sanctioned by:Consultants Yes No NoProject Manager Yes Yes NoManagement (Client) Yes Yes Yes6. Calculated on the basis of:Past Personal/Corporate Experience Yes Yes YesStatistical Analysis of Past Projects Yes Yes YesProbabilistic Assessme
31、nt of Change Yes No NoProbabilistic Assessment of Risk No Yes NoManagement Policy No No YesE2168 10 (2016)2cost classification that is typically part of a generic WorkBreakdown Structure.5.5 Subsidiary Classification:5.5.1 Construction EstimateAn estimated cost for theconstruction work including all
32、 trade costs and the primecontractors Field Requirements and Office Overhead budgeting; building economics; classifica-tion; construction estimating; contingency; cost control; costestimating; cost planning; cost risk; reserve; UNIFORMAT IIAPPENDIXES(Nonmandatory Information)X1. GUIDANCE NOTESX1.1 T
33、hese guidance notes are included to aid in under-standing the application of the classification terms. A simpleand relatively common arrangement used in building construc-tion has been used, within the mandatory information as Table1, describing a common usage. Appendix X2 provides anexample of its
34、application within the transportation construc-tion sector.X1.2 Most especially with design construction estimatesthere is a need to make provision for the, as yet, undefineddetail. It is necessary to make allowance for this if an estimatetotal is to be a reasoned forecast of construction cost. Anes
35、timate based on complete drawings and specifications willinclude only those allowances specifically prescribed in thatdocumentation. Both specific allowances and non-specificallowances may be required, particularly during the earlydesign stages.X1.3 Table 1 considers just three levels of a typical W
36、orkBreakdown Structureprogram, project, and constructionand the cost estimates within them. Each rolls up into the other,with program being the top level. In Table 1, it is assumed thatresponsibility for maintaining these levels within budget isdelegated down from management/client (program), to pro
37、jectmanager (project), to consultant (construction), although eachlevel has an oversight responsibility for their subordinatesactions. Table 1 uses this hierarchy.X1.4 Construction LevelWhen summarizing estimatesspecific allowances are usually included within the section towhich they apply, that is,
38、 an allowance for rock excavationwould be included within the appropriate trade or elementalcategory. Non-specific allowances, by their very nature, cannotbe treated that way and so must be included in a unique sectionor category of their own. In architectural building parlance, anallowance is somet
39、imes described as provision for a deferred orevolving design decision.NOTE X1.1This summary methodology and its distinction betweenthe specific and the non-specific also applies to contingencies andreserves.X1.5 Project LevelA project manager, whose responsibil-ity is to deliver a project “on time a
40、nd within budget,” willmake provision within the project estimate for risk items whenadvising management of their financial exposure. This may bedone by including a contingency sum within the total forecastproject cost. Although estimated in several possible wayscontingency sums should reflect both
41、the upside and down sideof identified project risks. Contingencies are reasoned sumsthat take into account the probability of occurrence of suchidentified risks. Such sums may likely be included for fundsappropriation purposes and are only to be expended, as needed,against those risks.X1.6 Program L
42、evelA prudent client may also makeprovision for changes in overall program direction, changes inrequirement, and other discretionary or unavoidable changes.Amanagement reserve is the usual approach. For purposes of thisdiscussion, a program may include several projects but onlyone reserve. Such rese
43、rves are controlled by the client and theamount may be based on company policy, calculation, or therecommendation of others. Again it is a measure of possibleexposure and is for use in the event that the client needs tochange the programs direction. Similar in many respects to acontingency the name
44、reserve identifies the party concernedwith its control.E2168 10 (2016)3X1.7 A simple chart summarizing the distinction and choicebetween the three terms, Allowance, Contingency, andReserve, in a generic decision tree follows as Fig. X1.1.FIG. X1.1 Cash Sums The Three-Way TestE2168 10 (2016)4X2. RECO
45、NSTRUCTION OF I-94 IN DETROIT, MICHIGANINTRODUCTIONThis Appendix X2 applies the principles contained in this standard to a “real world” example.Appendix X2 is based on Managing Transportation Projects with ASTM International Standards, aStandardized News piece published by ASTM in November 2007. Tha
46、t article, written by MuthiahKasi, was awarded first place in the 2007 ASTM International Advantage Award Competition.X2.1 The Michigan Department of Transportation (MDOT)conducted a unique, highly successful three-week Value Plan-ning (VP) Study of the planning and engineering data compo-nent of th
47、e I-94 Early Preliminary Engineering (EPE) Study.The subject of the VP Study was a seven mile, $1.2 billionreconstruction and widening of I-94 through downtownDetroit, including two freeway to freeway interchanges andseven local interchanges. The proposed project consisted oftotal reconstruction of
48、the existing six lane depressed freewayplus widening to a total of four through lanes in each directionand median barrier plus a total reconstruction of 30 bridgeswithin the two freeway interchanges and another 40 bridgesover the freeway. The freeway and service drive project wouldrequire the purcha
49、se of approximately 100 business andresidential properties adjacent to existing I-94 (see Fig. X2.1).X2.2 The Value Planning was performed in two one-weeksessions with a 10-day break. The participants included engi-neers from MDOT and five other consultants. The cost modelfor the $1.2 billion expenditure was developed by followingE2168 06. In the planning phase of any transportationproject, there are many uncertain elements. The project extendsmore than 10 to 20 years from planning to construction phasesand there are many unknowns in design, planning
