All new projects involve some level of risk or uncertainty. Short-term projects using established technologies are typically considered low risk, while long-term projects using new, untried technologies are generally considered higher risk.

You can use a number of approaches to account for risk during project evaluations. You can establish special guarantee provisions in the specifications and the contract, for example. This will typically increase the price from the suppliers, since they assume more of the risk.

You can also increase the buyer's internal contingency account in the project's cost evaluation. Another option is to make adjustments to the discount rate to accommodate the level of risk, with higher rates applied to riskier projects. Finally, you can use combinations of these approaches.