must also post at least one substantive reply to a colleague’s post. You must reply to a colleague with – 200 to

must also post at least one substantive reply to a colleague’s post. You must reply to a colleague with – 200 to 300 words.When citing resources, don’t forget to use in-text citations and a reference citation at the end using proper APA style. Please consult Purdue’s Online Writing Lab (OWL) website or your APA guide to assist you. See: OWL APA Style Guide for assistance.


Wells – 5.1
A “Contingency” is basically a plan “B,” meaning that if plan “A” does not work, we have a
backup plan in place. More specifically, a contingency plan is synonymous with contingent
response strategies. According to (PMI, 2013, p. 346), “Some responses are designed for use
only if certain events occur.” So, in the project management realm, “Events that trigger the
contingency response, such as missing intermediate milestones or gaining higher priority with a
supplier, should be defined and tracked.” (PMI, 2013, p. 346). The way to employ this strategy is
best explained by the (PMI, 2013). “The risk response identified using this technique are often
called contingency plans or fallback plans and include identified triggering events that set the
plans in effect.”
A contingency plan is not always required for every risk in a risk register because,
“Chances are, you’ll end up with a long list of potential threats. It may be unrealistic to attempt
contingency planning for all of them, so you need to prioritize.” (Mindtools, n.d.). When
identifying risks and the impact they have on a task, a good practice is to prioritize the higher
risks and develop a contingency plan. (Mindtools, n.d.) states, “Risk Impact/Probability
Charts are a good way to do this. These charts help you to analyze the impact of each risk, and
to estimate how likely it is to happen. This reveals which risks require the expense and effort of
risk mitigation.”
It is always a best practice to, at the very least, develop a strategical backup plan to
mitigate unforeseen high-risk tasks. If there is risk involved, we must be able to have a plan “B”
in place, because time is money, and money is time. The resultant nonproductive time has a
definite negative impact to a project, and will cause disruption to the budget, scheduled
deliverables, and can impact the project scope as well. It may even result in project failure.
A contingency plan is often structured around the identified triggering events, and the
organizations’ risk threshold. “Triggers, specify what, exactly, will cause you to put your
contingency plan into action.” (Mindtools, n.d.). Furthermore, an organization may define their
parameters on the respective risk threshold, and the amount of risk the company is willing to
accept.
All projects involve some degree of risk and it is critical to identify these risks. These
unidentified risks also come with an increase in project cost, so “To fund these risk responses, a
project manager needs to set up contingency reserves, the contingency in this case being if a
certain risk occurs at some point in the project.” (Rowley, 2013). In addition to contingency
reserves, there are also “Management Reserves. “The amount of these reserves is determined
before the project begins, but as opposed to contingency reserves, they are not under control of
the project manager.” (Rowley, 2013). In fact, these reserves are controlled by the project
sponsor. Both contingency and management reserves relate to the types of risk and the risk
levels, because the reserves in general, are there for funding the risks involved. The main
difference is that one is controlled by the project manager, and one is controlled by the project
sponsor. Before a project begins, management reserves are set in place. “You cannot develop a
risk response in advance because you don’t know what the risks are going to be in advance.”
(Rowley, 2013). Therefore, the project manager needs to have the control of contingency
reserves.
Works Cited
Mindtools. (n.d.). Mindtools. Retrieved from Contingency Planning:
https://www.mindtools.com/pages/article/newLDR_51.htm
PMI. (2013). The Guide to the Project Management Body of Knowledge (5th ed.). Newtown
Square, PA: Project Management Institute, Inc.
Rowley, J. (2013, May 7). 5th Edition PMBOK® GUIDE—Chapter 7: Contingency Reserves
and Management Reserves. Retrieved from 4Squareviews:
https://4squareviews.com/2013/05/07/5th-edition-pmbok-guide-chapter-7-contingencyreserves-and-management-reserves/

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