The Analysis of Importance Index to the Dominant Category Causing Contractor Contingency Cost in Aceh Province Hafnidar A. Rani Department of Civil Engineering, Universitas Muhammadiyah Aceh, Indonesia Email: nidarrani@yahoo.com Abstract—Contingency cost is the money provided as the reserve cost to face the uncertainty situation relating to the construction project. The contractor need to allocate some amount of the budget for contingency cost into the offering budget proposed to anticipate the uncertainty situation that could be occurred. The problem raised is what the uncertainty factors affecting contractor contingency cost. From the results of this study are obtained five of the most factors causing uncertainty which affecting contractor contingency cost in the building construction project. These five factors are divided into two dominant categories causing uncertainty which affecting contractor contingency cost in the building construction project based on the three respondent groups which are team financial condition, security and safety in the project location, and team management capability involved. Index Terms—contingency cost, uncertainty, contractor, importance index I. INTRODUCTION The cost estimation is important in construction project. The construction cost estimation calculated before construction physical implementation process done and requiring detail analysis and document compilation because the cost estimation has the impact on the success of the project and the company. The accuracy of the cost estimation depends on the latest information obtained in the construction sector, in addition to the selection of cost estimation type used. Inadequate project management and unrealistic cost estimation become the cause of cost increase in the project implementation. Therefore, the contractors are required to allocate a number of contingency costs into every bidding document submitted in order to anticipate any uncertainties occurred. Project contingency cost has become one of the important parts in the project management. Most of the studies discussing about the project management especially project cost management, generally have the references of the project contingency cost, such as explained in [1]. Although there are a lot of discussions about project contingency cost in project cost management Manuscript received January 11, 2017; revised May 3, 2017. theory, but there is still little empirical research carried out on the understanding of project practitioners about this concept, the desired scope and methods to predict or to manage it. It is required to be investigated because contingency cost becomes one of the important factors in the project and the understanding of the people about this concept will affect how they manage the contingency cost. The study aims to identify the uncertainty factors affecting contingency cost in the construction project. II. LITERATURE STUDY A. Cost Estimation Cost estimation can be defined as the art to estimate (the art of approximating) the possibility of the amount of costs required for an activity based on the information available at that time [2]. The cost estimation has close relation to the cost analysis, since the work related to cost assessment of the previous activities that will be used as the references to create the cost estimation. In other words, the cost estimation preparation means focus on the future condition, calculating and estimating the condition could possible happen. While the cost analysis focused on assessing and discussing the last activities cost that will be used as input. There are two types of cost estimation in the project construction depending on work type and contract type used; they are lump sum cost and unit price cost. The components involved in the cost estimation are unit price and work volume. Then the cost estimation is required to identify construction cost components first which are divided into 3 categories mentioned below:  Direct cost; the cost required by every material that becomes permanent component of the project. Several direct cost components such as; material cost, equipment cost, worker cost and foreman cost  Indirect cost; the cost required to the management operational need, quality controlling, and the service to project procurement which not become permanent product, but required in the project implementation process. The indirect cost can be divided into:  Overhead cost, the indirect cost which used as field and company operation cost as the whole. 228 International Journal of Structural and Civil Engineering Research Vol. 6, No. 3, August 2017 © 2017 Int. J. Struct. Civ. Eng. Res. doi: 10.18178/ijscer.6.3.228-232