HKSM

A portion of the project budget or schedule kept outside the performance measurement baseline (PMB) under management control, set aside to address unexpected work that still falls within the approved project scope.

Key Points

• Held outside the PMB and not part of performance measurement until it is authorized for use.
• Intended for unforeseen, in-scope work (unknown-unknowns), not for approved scope changes.
• Typically released by senior management or the sponsor; using it usually requires a formal change to the PMB.
• Different from contingency reserve, which is inside the baseline and linked to identified risks.

Example

Midway through a capital project, new regulatory testing is unexpectedly required but is still within the project's scope. The sponsor authorizes use of management reserve to cover the extra tests and associated schedule impact, and the PMB is updated to reflect the approved change.

PMP Example Question

Which statement best describes management reserve?

1. Funds within the cost baseline set aside for identified risks with planned responses.
2. Money or time kept outside the PMB, controlled by management, for unforeseen but in-scope work.
3. Budget allocated for customer-requested scope changes.
4. Extra padding added by team members to individual activity estimates.

Correct Answer: B — Money or time kept outside the PMB for unforeseen, in-scope work

Explanation: Management reserve is outside the PMB and used for unknown-unknowns within scope; contingency (A) is inside the baseline, while C and D are not correct uses.