What Does ‘Provisional Sum’ Mean in Your Contract?
When reviewing a construction contract, one of the terms that often causes confusion is “Provisional Sum.” You’ll see it appear in tender documents, cost plans, and bills of quantities, but what exactly does it mean — and more importantly, how does it affect your project’s cost and risk?
Understanding this term is vital for anyone involved in construction — whether you’re a developer, contractor, subcontractor, or private client. Misunderstanding provisional sums can lead to budget overruns, disputes, and uncertainty during the build.
Let’s break down what a provisional sum is, why it’s used, and how to manage it effectively.
What Is a Provisional Sum?
A Provisional Sum (PS) is an estimated allowance included in a construction contract for work that cannot be precisely defined or priced when the contract is signed. It represents a reasonable forecast for an element of work that is expected but where the scope, design, or quantity remains uncertain.
In simple terms, a provisional sum is a budget placeholder — it allows the contract to proceed even though some aspects of the work are still under development.
For example:
If the design team hasn’t yet finalised the landscaping layout or drainage design, a provisional sum might be inserted to cover the expected cost. Once those details are available, the provisional sum is replaced by an actual cost based on the completed design and agreed prices.
Why Are Provisional Sums Included?
Construction projects often move forward while design and specification details are still being developed. Rather than delay the tender or contract award, provisional sums allow work to continue with flexibility.
They are typically used for:
- Specialist installations (e.g., mechanical and electrical works)
- External works or landscaping not yet detailed
- Foundations or groundworks where soil conditions are uncertain
- Client-selected finishes not yet chosen at tender stage
By including provisional sums, both the client and contractor acknowledge that some costs are not yet fixed. However, this flexibility comes with an element of financial risk — because once the actual work is defined, the cost may increase or decrease from the original allowance.
How Provisional Sums Affect Your Project Budget
While provisional sums are useful tools, they can have a significant impact on the overall project budget. At the outset, they help form a complete contract price. But as the project progresses and actual costs are determined, the original provisional amount is adjusted to reflect the true cost of the works carried out.
If the actual work turns out to be more complex or extensive than expected, the final cost will likely exceed the provisional allowance. Conversely, if the scope is reduced, you may see a saving.
That’s why it’s crucial to understand what each provisional sum covers before signing the contract.
Key questions to ask include:
- Does the provisional sum include materials, labour, or both?
- Has the contractor added overheads and profit to the allowance?
- Who bears the risk if the actual cost exceeds the provisional sum?
In most cases, the contractor is reimbursed for the actual cost of the work plus any agreed margin. However, depending on your contract type, the financial risk may fall on the client, so clarity is essential.
Provisional Sums vs. Prime Cost (PC) Sums
A common point of confusion is the difference between Provisional Sums and Prime Cost Sums. While they may sound similar, they serve very different purposes.
- Prime Cost (PC) Sums refer to specific supply items such as tiles, sanitary fittings, or appliances. The supply cost is uncertain, but the installation is usually straightforward and priced separately.
- Provisional Sums, on the other hand, relate to entire sections of work where both the design and the cost are not yet defined — such as drainage, external works, or service connections.
Understanding this distinction helps avoid disputes later when assessing variations or agreeing final accounts.
Best Practices for Managing Provisional Sums
Managing provisional sums properly can make the difference between a smooth project and one riddled with cost surprises. Here are some best practices:
- Clarify the Scope Early
- Review all provisional sums with your Quantity Surveyor before signing the contract. Make sure you understand what each allowance covers and how it was calculated.
- Request Supporting Details
- Ask for a breakdown of how the provisional amount was derived — including any assumed quantities, rates, or unit costs. Transparency at this stage helps you plan more accurately.
- Monitor Design Progress
- As design information becomes available, confirm actual quantities and specifications as soon as possible. This enables early cost updates and reduces surprises at the end of the job.
- Track Variations
- Each time a provisional sum is adjusted, document the change formally through a variation process. This keeps both parties aligned and maintains financial control.
- Update Your Cost Plan
- Regularly review your project budget to reflect any changes to provisional sums. Your Quantity Surveyor should provide updated cashflows and forecasts as these sums are converted into actual costs.
The Role of a Quantity Surveyor
A skilled Quantity Surveyor (QS) plays a vital role in managing provisional sums effectively. From the tender stage to final account, your QS ensures that allowances are reasonable, transparent, and properly controlled throughout the project lifecycle.
At Gray Quantity Surveyors, we work with developers, contractors, and private clients to:
- Identify and justify provisional sums at tender stage
- Ensure fair and accurate adjustments as design progresses
- Advise on contractual risk allocation
- Maintain financial transparency and prevent disputes
Our goal is to help clients achieve cost certainty and avoid the shock of unexpected overruns once the true scope of work is known.
Final Thoughts
Provisional sums are a normal part of construction contracts — but they should never be overlooked or misunderstood. They provide flexibility for incomplete design details but also introduce potential cost movement.
By seeking clarity, reviewing assumptions, and working closely with an experienced Quantity Surveyor, you can manage provisional sums effectively and maintain control over your project’s finances.
info@grayquantitysurveyors.com | 
+44 7841 039673Talk to Gray Quantity Surveyors about how we can help you manage provisional sums and achieve cost certainty on your next project.