Although project management is principally concerned with reducing the risk involved with a project, all plans are based on a set of assumptions made about the future. During the scoping and planning phases much effort is put into identifying elements (whether probable or possible) that might impact on the success of the project . These are called risks and the plan that is prepared attempts to mitigate or control for these foreseeable risks. However,contingencies are something else. A contingency is something that is not able to be predicted and would waste resources to be included in the original plan. For example, just about every project may be impacted by a natural disaster such as an earthquake but it doesn’t make sense to include an earthquake response in every project plan.
Contingencies are therefore not things to be planned for, rather a project manager should monitor the environment for signs that the assumptions contained in the plan are no longer true. This would then trigger a different set of activities than that included in the original plan.