Contingency Reserve
Budget or time set aside for identified risks that may or may not occur (known unknowns).
Contingency reserve is budget or schedule buffer allocated inside the cost and schedule baselines to address known unknowns — identified risks whose probability and impact have been quantified. Because it sits within the baseline, the project manager can authorize its use without escalating to senior management, a direct tool for risk response. The key exam distinction is from management reserve, which covers unknown unknowns, sits outside the baseline, and typically requires a formal change request and change control board approval to access. Knowing which reserve the PM can spend autonomously is one of the most frequently tested nuances.
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