When estimating the cost of a project, product or investment, there may be uncertainty about the exact content of the items in the estimate, how the work will be carried out, what the working conditions will be when the project is delivered, and so on. These uncertainties are risks to the project.
Some refer to these risks as “known unknowns”, because the estimator is aware of them and, based on past experience, can estimate their likely cost. The estimated cost of these known unknowns is what cost estimators refer to as cost contingency.
