To manage the final forecast in a construction project, it is built up from two main types of cost: known costs — budget, contract or purchase, changes and so on — and unknown costs.
The unknown costs are split into two categories: Uncertainty and Expected addition. They represent different degrees of certainty, both as to whether the cost will actually occur and how large it will be if it does.
Uncertainty
Uncertainty covers costs you set aside as a provision to adjust the final forecast, where you are unsure about both the size and the probability.
This is the most open-ended category: you do not know for certain whether the issue will materialise at all, and even if it does, the cost impact is unclear. Uncertainty acts as a buffer in the final forecast for this type of risk.
Expected addition
An expected addition is a cost you know with 100% probability will occur — but where the size of the cost is still somewhat uncertain, because you have not yet received a price for the work from the party who will carry it out.
In other words: the whether question is settled — the cost is coming. It is the how much question that remains.
The difference in short
| Will the cost occur? | How large will it be? |
Uncertainty | Uncertain | Uncertain |
Expected addition | Certain (100%) | Still uncertain |
Why make provisions?
The purpose is to ensure that the final forecast always reflects the most realistic cost picture possible — including for issues that have not yet been formalised as a contract, change or other cost object.
When an expected addition is registered, the final forecast is adjusted upwards immediately by the value of the expected addition. The same applies to uncertainty: the provision affects the final forecast directly, in line with the amount you have chosen to set aside.
Converting to other cost types
Expected addition and Uncertainty are not permanent categories. They represent a preliminary estimate that can later be converted into another, more concrete cost type as the issue is clarified.
Example: You first register an expected addition for an issue you know will cost something, but without a priced scope. As the matter develops — for example when you receive a priced claim from a subcontractor — you can convert the expected addition into a Subcontractor change order. This replaces the temporary provision with a concrete, documented cost object.
