Escalating Issues to the Project Board During Initiation in PRINCE2
You are managing a construction project. During the Initiation Stage, you are developing the Project Plan. The senior supplier informs you that the required steel will be delayed by 3 months due to a global shortage. This delay will push the project completion beyond the board's deadline. The project has a fixed completion date due to regulatory requirements. The senior user is unwilling to accept a delay. You have identified that using an alternative material could save 2 months but would increase costs by 15%. The project budget has a 10% contingency. What is the most appropriate course of action?
Quick Answer
The correct answer is to inform the Project Board that the project cannot meet the deadline and request guidance. This is because the delay and cost exceed the agreed tolerances: the alternative material still leaves a one-month overrun past the fixed regulatory deadline, and the 15% cost increase surpasses the 10% budget contingency. In PRINCE2, when a plan cannot be achieved within delegated tolerances—whether for time, cost, scope, or quality—the Project Manager must escalate the issue to the Project Board, as only the board can authorize changes beyond those limits. On the PRINCE2 Foundation exam, this scenario tests your understanding of the escalation principle during the Initiation Stage, where the Project Plan is being finalized. A common trap is trying to solve the problem yourself by accepting the alternative material, but the core rule is that exceeding tolerances requires escalation, not unilateral action. Remember the mnemonic: "Tolerances topped? Escalate and stop."
⚠ Common exam trap
Candidates often think the contingency is available to cover any cost overrun, but PRINCE2 requires that contingency use must be within agreed tolerances and that exceeding tolerances triggers escalation, not autonomous action.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Inform the board that the project cannot meet the deadline and request guidance
The project has a fixed completion date due to regulatory requirements, and the identified solution (alternative material) still results in a 1-month delay (3-month delay minus 2-month saving) and exceeds the 10% contingency (15% cost increase vs. 10% contingency). According to PRINCE2, when a stage plan or project plan cannot be achieved within agreed tolerances, the Project Manager must escalate the issue to the Project Board for a decision. The board is the only authority that can authorize a change to the project's scope, schedule, or budget beyond the delegated tolerances.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Reduce the project scope to meet the deadline
Why it's wrong here
Scope change needs board approval and may not be feasible.
- ✗
Switch to the alternative material and use the contingency to cover the cost increase
Why it's wrong here
The cost increase is 15%, but contingency is only 10%, so insufficient. Also, the delay may still be unacceptable.
- ✗
Accept the delay and update the Project Plan accordingly
Why it's wrong here
The board's deadline is fixed; the PM cannot unilaterally accept.
- ✓
Inform the board that the project cannot meet the deadline and request guidance
Why this is correct
The board must decide on options, as the issue impacts the project's viability.
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Same concept, more angles
1 more way this is tested on PRINCE2F
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A project is in the Initiation Stage. The senior user requests a major change to the scope. What should the project manager do?
hard- A.Reject the change as it is too late
- B.Accept the change and adjust the Business Case
- C.Update the Project Plan and continue
- ✓ D.Create an Issue Report and escalate to the Project Board
Why D: In PRINCE2, during the Initiation Stage, the Project Manager does not have authority to approve scope changes. Any issue that could impact the Business Case or project viability must be formally documented as an Issue Report and escalated to the Project Board for a decision. This ensures governance is maintained and the Business Case remains viable.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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