Provisional sum

A provisional sum is an allowance included in the contract sum for work that cannot be fully defined or measured when the contract is entered into. Later, the work is instructed, carried out, valued, and the actual cost replaces the allowance.

They exist because some things genuinely cannot be pinned down at tender. Below-ground conditions before opening up, the scope of repairs to an existing structure, a client requirement not yet designed. Better to carry an honest allowance than to price a fiction.

Defined and undefined

This distinction, drawn from the standard methods of measurement, decides where risk sits and is the source of most provisional sum disputes.

A defined provisional sum comes with enough information at tender that the contractor could reasonably allow for it in their programme and preliminaries: the nature of the work, where it fits in the sequence, its approximate scope. Because they could plan for it, they generally have no entitlement to extra time or prelims when it is instructed.

An undefined provisional sum does not. The contractor could not sensibly programme it, so when it is instructed they are normally entitled to an extension of time and the associated preliminaries alongside the value of the work.

The practical trouble is sums labelled defined that carry nowhere near enough information to have been programmed. That becomes an argument once the instruction lands, and the tender wording usually decides it.

How they are expended

The contract administrator issues an instruction. The work is then valued using the same principles as a variation: contract rates where they apply, fair valuation where they do not. The allowance comes out of the contract sum and the valued cost goes in.

If the work is never instructed, the allowance is simply omitted. A contractor treating unspent provisional sums as anticipated turnover is counting money that may never exist.

Keeping track of them

Provisional sums are easy to lose sight of because they sit quietly in the contract sum until something triggers them. Six months in, with several instructed and valued and others still outstanding, the question of what remains and what the instructed work actually cost against its allowance is one many projects struggle to answer quickly.

Recording each sum, its classification, the instruction that expended it and the resulting valuation keeps the CVR honest and makes the final account a reconciliation rather than an excavation. That is what Sync’s budget management and cost tracking are built to hold.