Before defining contingent reserve strategies in the context of project management, it is important to define reserves first. Reserves are any amount of time, fund or resources that are used in the project’s life cycle. In project management, it is crucial to mitigate the cost as well as the schedule of the risk with a modifier. The modifier such as the contingent reserve strategy provides detail on the types of risks that should be mitigated.
In a project management environment, uncertainties often arise. This happens because every project may result in different products or services. Different events can affect the ability of the team to achieve the objectives of the project. The contingency reserve is defined as the budget that is within the cost baseline that is allocated to the identified risk which the mitigating responses have been developed.
The contingent reserve strategies serve as a cushion to the risks that if ever they become real, the reserve strategies will be able to absorb the impact so that the project team will still be able to deliver the product or service within the baseline time as well as duration.