What is a Provisional Sum?
When an item of work or construction activity is anticipated but cannot be properly described and quantified, a predetermined sum of money is set aside by the Quantity Surveyor to cover the cost of said construction activity. This is a Provisional Sum.
A provisional sum will be identified as either ‘defined’ or ‘undefined’ and there is an important commercial difference between these two definitions.
What is a Defined Provisional Sum?
It is very important to note that where Defined Provisional Sums are included within the BoQ, the contractor will be deemed to have made adequate allowance in his or her programming, planning and pricing preliminaries. Although the anticipated work or construction activity is not fully detailed, the contractor can still establish the nature, methodology, indicative quantities and any limitations involved with carrying out the works.
What is an Undefined Provisional Sum?
Where any aspect of the information required for a Defined Provisional Sum (shown above) is not available, work is described as an ‘undefined’ Provisional Sum. Where Provisional Sums are given for undefined work, the contractor will be deemed not to have made any allowance in programming, planning and pricing preliminaries.
When might a Provisional Sum be used?
A BoQ is typically produced by the Quantity Surveyor who uses Royal Institute of British Architects (RIBA) Stage 4 design information as a basis for BoQ production. A Provisional Sum may occur when an element of the design has not been developed sufficiently to RIBA Stage 4 at the time of tender. The Employer may not want to wait for this element of design to catch up prior to floating the tender to the market for contractor bidding. In this instance the Quantity Surveyor will include a Provisional Sum within the BoQ so that the tender still be issued and progressed.
What is an example of a Provisional Sum?
An example of a Provisional Sum might be £150,000 allocated for construction of a small outbuilding which is required, but the Quantity Surveyor cannot properly quantify at the time of BoQ production and tender due to insufficiently developed design information.
What are the Key Risks of a Provisional Sum?
Once the design information has caught up and is sufficiently developed, the contractor/sub-contractor will be able to provide a fixed price lump sum for the scope of work which was previously allocated as a Provisional Sum. The amount of money set aside for a Provisional Sum is an Employer risk, and therefore the cost can go up as well as down.
