Contingency reserve is used to manage identified risks, while management reserve is used to manage unidentified risks. Contingency reserve is an estimated figure. Management reserve is a percentage of the cost or duration of the project. The project manager has authority over the contingency reserve.
Cost Baseline
When you add the contingency reserve to the cost estimate, you get the cost baseline.
Ibrahim BritoSite Manager | Renewable Energy| Primoris Renewable EnergyNc, United States
The contingency reserve can be calculated for a determined work package, when you previously have implemented the tools for risk management, and should incorporate the amount for Contingency in the cost of the Work Package. If the risk happens, the cost should be still within the cost estimation. The Management reserve, just like our friend Veera told us, is usually a percentage of the whole project cost, to afford any unknown risk that could happen. Saving Changes...
Only thing I'd add is: Contingency Reserve is for your known-unknowns, Management Reserve is to protect the project and/or portfolio against unknown-unknowns...
I have seen many projects where the management reserve is not under project manager control and, therefore, not part of the project budget. Saving Changes...
