A project reserve, also called a management reserve, is a set of funds put aside for the duration of the project to cover contingencies, risks and unforeseen circumstances. The project reserve typically reduces throughout the program life-cycle. This reserve is not normally part of the program mgt. performance baseline or target cost.

Project reserves can be calculated simplistically as a fixed % of remaining program costs or estimate-to-complete, or based on the sum of all risk weighted costs impacts for that project. Provided that project managers and engineers have the discipline to track risks and their cost impacts, it is recommended to set project reserves from the sum of risk weighted cost impacts.

The RISK tab of a project, proposal or estimate shows the that project's risk as a list and as a heatmap. You can see the weighted cost impact highlighted with a purple box in the screen shot above. The sum of the weighted risk impacts is the project reserve.

The project reserve is not tracked or maintained within this system, rather weighted risk cost impact data is provided for informational purposes. Project risk reserves should be maintained in your project accounting system (e.g. SAP).