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O.M. Magnussen, N.O.E. Olsson / International Journal of Project Management 24 (2006) 281–288 285Table 1The sampleType of project Number of projects Per centTransportation infrastructure 12 39Building 9 29Defence procurement 8 26Information technology 2 6Total 31 100ject reserves in major public projects is a fundamentallynew approach in Norway [9].Table 2 describes the size of the project reserves recommendedby the external consultant with respect to projecttype (upper part of the table) and size (lower part of thetable). Since the reserves are not expected to be used, theyare here presented as a mark-up above the 50% probabilitybudget.The fundamental information provided by Table 2 isthat the size of the typical project reserve lies in the areabetween 8% and 11%. The average reserve in this sampleis a 9% mark-up. An analysis based on a categorisationwith respect to project type (transportation infrastructure,building, defence procurement, and IT) shows that the subcategorymean values deviate little from the overall mean.Table 2 also shows that there is no obvious connectionbetween the project size and the size of the reserveexpressed in per cent. The three sub-categories includingprojects from NOK 300–750 million, NOK 750–1500 millionand projects larger than NOK 1500 million all showmean values close to the overall mean value. One mightexpect that it would be more difficult to predict all aspectsthat could have an impact on costs in large projects. Theintention with the allocated reserve is to mitigate projectrisks that can not be fully predicted [14]. Seen in relationto the literature referred to above, where it was stated thatmajor projects often suffer from cost overrun, one mightexpect that large projects would call for larger reserves.This is contradicted by the unsubstantiated notion that inTable 2Size of the recommended reserves (after project type and size)Type of projectNumberof projectsMean reservepercentage(sub-category)Transportation 12 8 3infrastructureBuilding 9 11 6Defence8 7 4procurementInformationtechnology2 11 5Total 31 9 4Size of project(million NOK)300–750 13 8 4750–1500 12 9 41500– 6 10 6Total 31 9 4Standard deviationpercentage(sub-category)major projects there exist more alternative courses ofaction, i.e., there are more opportunities to influence costs.The results here are nevertheless not surprising. The recommendedreserves basically reflect the uncertainty in theperformed calculations. As described above, the size ofthe reserve in most cases is the difference between the50% and the 85% subjective probability, which roughlyequals one standard deviation. The robustness of the resultfrom the uncertainty analysis depends on the ability to predictpossible factors and their influence on project cost.Table 2 indicates that there is a rather typical reserve percentage,independent of project size or type. Building andinformation technology projects display a somewhat highermean reserve and standard deviation than transportationinfrastructure and defence procurement projects, but theexisting material does not allow us to draw sharp conclusionswhether there is a pattern here. The results from analyzingprojects categorized by size, show even smallerdifferences between the sub-categories.One of the major concerns has been the possibility thatactual costs will be higher with the new approach, wherereserves are allocated, compared to the old procedure.The point here is that it is questionable to assume anythingabout actual costs as long as the projects have not beencompleted yet, and adequate measures to obtain more realisticbudgets have been established. Many authors emphasizethe importance of better planning in the early stages oflarge projects to increase the potential for project successand reduce the occurrence of cost overrun.6.2. The difference between the proposed estimate from theproject organisation and the recommendation from theexternal consultantThe main issue here is related to the significance of qualityassurance on the cost estimation process. This is thebackground for the attention paid to the comparisonbetween the initial estimate and the revised estimate.When comparing the estimates, fixed prices are used,and the numbers describe the ‘‘same project’’, which meansthat it has been controlled whether fundamental elementsof the project have been changed between the proposedestimate and the recommended estimate (cf. the discussionabove concerning that a project could be subject to modificationsover time). This is an important prerequisite,because when the cost focus and control aspect is dominating,one must not only consider the different answers, i.e.,the numbers from the uncertainty analyses. One must alsoask whether they are answers to the same question.To present an aggregate view of the data, the differenceshave been calculated in percent and divided into categoriesbased on the size of the difference.Table 3 shows that the recommendation from the externalconsultant is lower or equal to the projectsÕ proposal in8 out of 31 projects (26%). For the majority of the projects(74%), the external consultants recommend higher budgetlimits, in some cases up to 15% or more. On average the