Cost Project Response: Contingent Strategies and COCOMO Model
PMBOK v8 Definition
The Constructive Cost Model (COCOMO) is a cost-estimation model for effort, time, and cost, usually associated with software development projects. It uses source lines of code or function points and adjustment factors as inputs to predict software development cost. Contingent response strategies are five predefined approaches for dealing with opportunities: Escalate, Exploit, Share, Enhance, and Accept. These strategies are applied when a risk event occurs, requiring a pre-planned response.
Why It Matters for the Exam
This concept appears frequently in PMI exam questions on Cost Management and Risk Management knowledge areas. You will encounter it in situational questions asking you to select the correct cost estimation technique or the appropriate risk response strategy when a specific opportunity arises. The exam tests your ability to distinguish between COCOMO and other estimation methods, and to match contingent response strategies to given scenarios.
Key Points to Remember (for the exam)
- COCOMO Definition: A constructive cost model specifically for software development projects—not for construction, manufacturing, or general projects
- COCOMO Inputs: Source lines of code (SLOC) or function points, plus adjustment factors
- COCOMO Outputs: Effort, time, and cost predictions
- Five Contingent Response Strategies for Opportunities:
- Escalate: When the opportunity is outside project scope or exceeds the project manager's authority
- Exploit: Ensure the opportunity definitely happens
- Share: Allocate ownership to a third party best able to capture the opportunity
- Enhance: Increase the probability and/or impact of the opportunity
- Accept: Acknowledge the opportunity but take no proactive action
- Key Distinction: Contingent response strategies are pre-planned and activated only if the risk event occurs—they are not proactive risk management actions
- Common Confusion: COCOMO is often confused with analogous estimation or parametric estimation; however, COCOMO is a specific model within parametric estimation, not a separate category
Typical PMI Exam Example
A project manager is estimating costs for a new software application. The team has historical data from 15 similar projects and can count the number of function points required. Which cost estimation technique should the project manager use? → COCOMO (Constructive Cost Model) because it uses function points and adjustment factors specifically for software development.
PMI Exam Traps
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Trap: Confusing COCOMO with analogous estimation
- Reality: COCOMO uses mathematical models with adjustment factors; analogous estimation uses historical project values without mathematical modeling
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Trap: Applying COCOMO to non-software projects
- Reality: COCOMO is exclusively for software development projects; use other parametric models for construction, manufacturing, etc.
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Trap: Treating contingent response strategies as proactive risk management
- Reality: Contingent responses are pre-planned but only activated when the risk event actually occurs; proactive responses are implemented before the risk event
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Trap: Confusing "Escalate" for opportunities with "Escalate" for threats
- Reality: Both exist but serve opposite purposes—for opportunities, escalation means the project team cannot capture the benefit; for threats, escalation means the risk exceeds the project manager's authority to handle
Important PMI Connections
| Related Concept | Relationship Type | Exam Attention Point |
|---|---|---|
| Parametric Estimation | COCOMO is a type of | COCOMO uses mathematical models with multiple adjustment factors; parametric estimation is the broader category |
| Contingency Reserves | Output of cost estimation | Contingency reserves are set aside for identified risks; COCOMO helps determine the baseline cost before adding contingency |
| Historical Information Review | Input to COCOMO | Historical project characteristics (parameters) are used to develop mathematical models for COCOMO |
| Risk Response Planning | Contingent strategies are part of | Contingent response strategies are documented in the risk register and activated only when the trigger occurs |
| Estimate Resources | COCOMO inputs feed into | COCOMO estimates effort and cost, which directly inform resource estimation for software projects |
Quick Review Questions
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A project manager is using source lines of code and adjustment factors to estimate software development costs. Which cost estimation model is being applied?
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During project planning, the team identifies an opportunity to use a new technology that could reduce development time by 20%. The project manager decides to assign a third-party vendor to implement this technology. Which contingent response strategy is being used?
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A risk trigger occurs for an opportunity that was identified during planning. The project manager activates the pre-planned response. What type of strategy is this?
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A project manager is estimating costs for a bridge construction project. Can COCOMO be used? Why or why not?
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Which contingent response strategy should be used when an opportunity is clearly outside the project scope and the project manager has no authority to pursue it?
PMBOK v8 Reference
Section 2.6.2.2 – Estimate Resources (COCOMO mentioned as a tool) Section 157-158 – Constructive Cost Model (COCOMO) and Contingent Response Strategies