Project Risk Management: Contingency Plan vs Fallback Plan for PMP Exam


Project Risk Management: Contingency Plan vs Fallback Plan for PMP Exam

In project risk management, actions are required to be planned should identified risks actually occur. There are two major types of planning: Contingency Plan and Fallback Plan — both the Contingency Plan and the Fallback Plan are developed in advance during Plan Risk Responses process.

This post will expound on the similarities and differences of Contingency Plan vs Fallback Plan and what Aspirants would need to know for the exam.

Contingency Plan and Fallback Plan

  • Contingency Plan: a contingency plan is developed to be taken only when risk event occurs
    • only for risks that have been accepted (i.e. no proactive actions to be taken to minimize their occurrence)
    • for identified risks (known unknowns)
    • developed during Plan Risk Responses process
  • Fallback Plan: a fallback plan is developed to deal with risks if the primary planned risk response is not effective
    • to be taken after the Contingency Plan
    • for identified risks (known unknowns)
    • developed during Plan Risk Responses process

In short, Contingency Plan (also known as Contingent Response Strategies) are developed for specific accepted risk with certain triggers while Fallback Plan is used when the planned primary risk response (e.g. Contingency Plan) is not effective (similar to the meaning of “Plan B”).

Contingency Plan and Fallback Plan Illustrated

Let’s take the project of PMP® Exam study and preparation as an example to illustrate the concept of Contingency Plan and Fallback Plan.

Falling ill during exam preparation is one of the top risks that may adversely affect the exam preparation and taking. Though in theory there are a number of measures that can be taken to minimize the risk of falling sick; in reality, there are not much Aspirants can do to avoid the risk. Hence, many Aspirants will just accept falling ill as an accepted risk.

For every accepted risk, there are two plans that need to be developed:

  • Contingency Plan — accelerate the exam preparation by taking annual leave from work so as to catch up with the original PMP® Exam schedule
  • Fallback Plan — postpone the exam date (even if an administration fee is required — a US $70 fee will be charged if you reschedule or cancel your exam within 30 calendar days of the appointment)

Mock Exam Question

  1. Sue is named the project manager of a software development project aiming to automate manual tasks to save labour costs and time in the long run. Mid-way through the project execution, a risk identified previously comes up. In the risk register, this risk was marked as an accepted risk. Which of the following plan should Sue consult to know how to handle this risk?
    1. Contingency Plan
    2. Workaround Plan
    3. Fallback Plan
    4. Project Cost Management Plan
    Solution: A
    The Contingency Plan should be consulted as it documents what to do when a actively accepted risk comes up.
    If the risk response documented in Contingency Plan is not effective, the Fallback Plan would then be carried out.

Conclusion: Contingency Plan and Fallback Plan

In project risk management, identified accepted risks may be handled (should they occur) with Contingency Plan and Fallback Plan :

  • Contingency Plan: the pre-developed risk response strategies to be taken if the actively accepted risks occur
  • Fallback Plan: the pre-developed risk response strategies to be taken if the primary risk response is not effective

Note: the costs dealing with identified risks are included in the contingency reserve

In addition, for all unidentified risks (unknown unknowns), workaround would be carried out:

  • Workaround: the immediate risk response strategies for unidentified or passively accepted risks occur in order to contain the damages against the project plan (the costs dealing with identified risks can be obtained from the management reserve upon management approval)

Note: the costs dealing with unidentified risks are included in the management reserve

Hope this article can illustrate the differences between Contingency Plan and Fallback Plan well.

recommended PMP resourcesAdditional FREE PMP® resources: 47+ Commonly Confused Term Pairs with detailed explanations. If you found this article useful, you may wish to reference other Commonly Confused Term articles.

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Edward Chung

Edward Chung aspires to become a full-stack web developer and project manager. In the quest to become a more competent professional, Edward studied for and passed the PMP Certification, ITIL v3 Foundation Certification, PMI-ACP Certification and Zend PHP Certification. Edward shares his certification experience and resources here in the hope of helping others who are pursuing these certification exams to achieve exam success.

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7 Responses

  1. Abhishek says:

    In PMBOK6, the contingency plan is same as the fallback plan. It makes no distinction between these two. And there is no mention of “Workaround”. it says “A contingency plan (or fallback plan) can be developed for implementation if the selected strategy turns out not to be fully effective or if an accepted risk occurs.”

    • Artem says:

      That is not fully correct. Terms difference is just not expanded anywhere. Your quote is accurate but it does not mean terms are the same. Another quote from 11.5.3.3 points that explanation in the article seems to be accurate:
      “Contingency plans and risk triggers that call for their execution;
      Fallback plans for use when a risk that has occurred and the primary response proves to be inadequate;

  2. Vivek Naik says:

    Hi Edwards,
    First of all thanks for these amazing articles.

    Workarounds are for “UNIDENTIFIED” risks , right?

    #ACTUAL
    Workaround: the immediate risk response strategies for unidentified or passively accepted risks occur in order to contain the damages against the project plan (the costs dealing with identified risks can be obtained from the management reserve upon management approval)

    #EXPECTED
    Workaround: the immediate risk response strategies for unidentified or passively accepted risks occur in order to contain the damages against the project plan
    –> (the costs dealing with “UNIDENTIFIED” risks can be obtained from the management reserve upon management approval)

  3. Vikram says:

    Hi…. There might be a mistake in your wordings. You mentioned, contingency plans are for passive risk acceptance. My understanding is that it should read “active risk acceptance” as passive risk acceptance is usually represented by workarounds. Please correct me if I’m wrong.

    • Hi Vikram,

      Yes, you are right. My bad. Thanks a lot for pointing out the typos. Your contribution will definitely help lots of PMP Aspirants.

      Wish you PMP success!