ASTM_E_2168_-_10.pdf

Designation:E216810Standard 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 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 often 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 held 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 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 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 ProjectsE2013 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 program 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 These 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 when 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 needed 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)requirement(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 Subcommittee E06.81on Building Economics.Current edition approved May 1,2010.Published August 2010.Originallyapproved in 2001.Last previous edition approved in 2006 as E2168 06.DOI:10.1520/E2168-10.2For referenced ASTM standards,visit the ASTM website,www.astm.org,orcontact ASTM Customer Service 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 States1 4.4.4 To distinguish between these sums,and in recognitionof their differing purpose,they are described,and classifiedhere,using the terms allowance,contingency,or reserve.NOTE1Section 5 includes a generic statement of purpose for each ofthe three terms and provides a sub-classification that distinguishesbetween sums included for specific 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 the 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 applied inall forms of co