Provisional Sums

Provisional sums are a practical feature of construction contracts that allows a project to proceed to tender before every element of the scope is fully resolved. They represent a defined budget allowance for uncertain or undefined work, enabling the contracting authority to obtain a competitive tender for the known elements while preserving flexibility to instruct the provisional work later, once the details are established.

What are Provisional Sums?

A provisional sum is a sum of money included in a bill of quantities (BOQ) or other pricing document, set aside for a specific purpose that cannot be entirely foreseen, defined, or detailed at the time tendering documents are issued. The contractor is required to include the sum in the contract price but does not carry out the work until instructed and does not commit to the rate at tender stage.

Under UK practice (following NRM2 and the RICS guidance), provisional sums are categorised as either defined or undefined:

A defined provisional sum is for work that is sufficiently described to allow the contractor to include in its programme and make reasonable provision for management and supervision. The contractor is expected to price attendances and preliminaries accordingly.

An undefined provisional sum is for work that is not sufficiently described to allow the contractor to make reasonable provision. The contractor is not expected to include programme or management allowances; these are assessed and agreed when the instruction is issued.

The distinction matters because under JCT contracts, instructing work covered by an undefined provisional sum entitles the contractor to an extension of time and recovery of any resulting disruption costs, whereas defined provisional sums do not automatically carry that entitlement.

Common uses of provisional sums include specialist subcontract work not yet competitively tendered (such as complex M+E systems, lifts, or specialist finishings), work contingent on survey results (such as ground remediation), statutory authority connections, and items where design is still in progress.

Under FIDIC and NEC contracts, provisional sums are handled differently. NEC does not use the term "provisional sum" directly; instead, it uses compensation events and the programme to manage scope uncertainty. FIDIC contracts allow for provisional sums in the BOQ with specific valuation rules for instructed work.

Why it matters for bidders

Provisional sums are a source of both risk and opportunity. If the provisional sum work is ultimately instructed at a higher value than the allowance, the final account increases accordingly. If it is omitted, the contract sum reduces. Contractors should review the schedule of provisional sums carefully and consider the programme implications of when and how this work might be instructed.

Bidders should also check whether any provisional sums are designated as prime cost (PC) sums for named subcontractors. PC sums are a specific subset where the main contractor is expected to obtain competitive prices and add a defined profit and attendance margin.

Example

A Danish municipality procures a new library building. The BOQ includes a defined provisional sum of EUR 180,000 for specialist acoustic treatment, as the acoustic consultant has not yet completed the detailed specification. The contractor prices attendances and programme allowances against the defined provisional sum. When the instruction is issued six months into the contract, the actual cost of the acoustic work comes to EUR 210,000. The contract sum is adjusted upward by EUR 30,000 via a variation instruction.

Frequently Asked Questions

Can a contractor be compelled to carry out provisional sum work?

No. A provisional sum is an allowance, not a committed obligation on either party. The contracting authority may instruct the work, in which case the contractor must carry it out, or may omit it entirely. The contractor cannot insist on being instructed to carry out provisional sum work.

How are provisional sums valued when instructed?

Under most standard forms, the work is valued using the contract's agreed rates where applicable, a schedule of rates if one exists, or by measurement and fair valuation if no applicable rate exists. The contract conditions specify the valuation rules precisely.

What is the difference between a provisional sum and a contingency?

A contingency is a budget reserve held by the employer against unforeseen cost increases on items already in the contract. A provisional sum is a specific line item in the BOQ for defined (if not yet detailed) scope. Contingency is not part of the contract sum; provisional sums are.