Project Management guide · Risk, quality and control
Contingency Plan in Project Management: Template and Examples
A contingency plan is a pre-agreed set of actions that the team will take if a specific risk occurs. It is prepared in advance so that, when a trigger is reached, people can act quickly instead of improvising.
Key takeaways
- A contingency plan sets out pre-agreed actions for when a risk occurs.
- Define clear triggers, owners, actions and reserves.
- Keep a fallback plan for when the contingency fails.
- Contingency reserve covers known risks; management reserve covers unknown ones.
Contingency plan vs mitigation vs fallback
| Term | When it is used | Example |
|---|---|---|
| Mitigation | Before the risk occurs, to reduce it | Run a load test early |
| Contingency plan | When a trigger shows the risk is occurring | If response times exceed 3 seconds, add two servers |
| Fallback plan | When the contingency plan does not work | Roll back to the old system |
| Workaround | Unplanned response to an unexpected problem | Manual processing while the fault is investigated |
Contingency plan template
| Field | Content |
|---|---|
| Risk ID and description | Link to the risk register entry |
| Trigger | The measurable sign that activates the plan |
| Decision maker | Who confirms the plan is activated |
| Actions | Step-by-step actions with owners |
| Resources and reserve | People, budget and time set aside |
| Communication | Who must be told, and how |
| Fallback | What to do if the contingency fails |
| Stand-down | How and when to return to normal |
How to write a contingency plan
- Pick risks with high scores or severe impact that cannot be reduced enough by mitigation.
- Define a clear, observable trigger, such as a date, a measurement or an event.
- List the actions in order, with an owner for each.
- Estimate the cost and time needed and agree a contingency reserve.
- Get approval in advance so no further sign-off is needed when the trigger fires.
- Rehearse critical plans, such as a system rollback.
- Review the plan when the risk changes.
Worked example
An outdoor product launch has a risk of heavy rain. Trigger: the Met Office forecast at 08:00 two days before shows more than a 60% chance of rain. Actions: the events lead confirms the marquee option with the supplier (pre-booked with a £2,000 cancellation fee), the communications lead updates the invitation page and emails guests, and the venue manager reorganises the layout. Reserve: £6,500 for marquee hire. Fallback: if the marquee is unavailable, move to the indoor conference room with a reduced guest list.
Contingency reserve
Contingency reserve is the time or money set aside in the cost or schedule baseline for identified risks. It differs from management reserve, which is held outside the baseline for unknown risks. Reserve can be estimated from the expected monetary value of risks or by Monte Carlo simulation.
Tips
- Make triggers specific: 'if the supplier misses the 12 March sample date' rather than 'if the supplier is late'.
- Keep plans short and practical; they are used under pressure.
- Store them where people can find them quickly.
- Record how contingency plans performed in lessons learned.
Free templates for this topic
Frequently asked questions
What is a contingency plan in project management?
A plan of actions prepared in advance to be carried out if a specific risk occurs.
What is the difference between a contingency plan and a fallback plan?
The contingency plan is used when a risk occurs; the fallback plan is used if the contingency plan itself fails.
What is the difference between mitigation and a contingency plan?
Mitigation acts before a risk occurs to reduce it; contingency is a response ready for when it does occur.
What is a trigger in a contingency plan?
A specific, observable condition that signals the plan should be activated.
How does contingency reserve relate to a contingency plan?
Contingency reserve is time or money included in the baseline to cover identified risks if they occur. It often funds the actions set out in a contingency plan.
How much should a project set aside for its contingency plans?
There is no universal figure. It should be based on the analysed risks, for example their expected monetary value or a simulation result.
Who approves a contingency plan?
Usually the project manager with the sponsor, so the plan can be activated without further delay.
Does every risk need a contingency plan?
No. Plans are usually prepared for high-priority risks or for accepted risks with serious impacts.
What is the difference between a workaround and a contingency plan?
A contingency plan is prepared in advance; a workaround is an unplanned response to a problem that was not anticipated or had no contingency plan.
Is a contingency plan the same as a business continuity plan?
No. A business continuity plan covers the whole organisation's ability to keep operating; a project contingency plan covers specific project risks.
Should contingency plans be tested?
Critical ones should be, for example by rehearsing a system rollback before go-live.