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Article: Pilot plant cost estimating: make intelligent use of contingency: in capital cost estimating, provision for contingency is often a misunderstood concept. Here are guidelines for applying it soundly to estimates involving pilot plants.(Engineering Practice Part 3)
- Article from:
- Chemical Engineering
- Article date:
- January 1, 2006
- Author:
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The first two installments of this three-part series (CE, November 2005, pp. 40-45, and December, pp. 42-47) dealt mainly with the major methods for estimating the capital costs of pilot plants. This final installment begins with a look at the making of provision for contingency, a concept sometimes misunderstood and even more often misapplied in pilot-plant cost estimating.
PROVIDING FOR CONTINGENCY
There are many different types of contingency, each with its own purpose (Table 1). Variations in terminology arise among different organizations. In particular, some of the kinds of contingency listed in that table are instead called "allowances" by some ...