Pricing guide
Provisional sums in building quotes
How to use an allowance when work cannot be properly defined, without making the quote look more certain than it is.
Definition
A provisional sum is an allowance for work that cannot be described and priced accurately when the quote or contract is prepared.
It is not a fixed price
Explain how the allowance will be replaced by the final agreed price. Say whether overhead, profit, and VAT are included or added.
When an allowance is reasonable
Hidden work
Drainage routes or structure cannot be confirmed before opening up.
Design incomplete
A detail or specification is still being completed.
Specialist input
A defined subcontract package still needs investigation or design.
Write the allowance clearly
| Include | Why it matters |
|---|---|
| Work covered | Stops the allowance being applied to a different package. |
| Amount | Shows the value already included in the total. |
| Known basis | Records quantities, assumptions or information used. |
| Adjustment method | Explains how the final value changes the total. |
| Markup and VAT treatment | Prevents a later argument about additions. |
| Decision date | Shows when information or instruction is needed. |
Example wording
“A provisional sum of £3,000 excluding VAT is included for repair to the existing below-ground drainage. The allowance includes labour, materials, plant, overhead and profit. Once the drainage is exposed and the repair agreed in writing, the contract total will be adjusted by the difference between this allowance and the agreed price.”
Do not use one when
- The work can be measured and priced now
- You are hiding an unrealistically low total
- The client is only choosing a supply item
- The risk should sit with a named party under the contract
Sources and further reading
This guide explains a common pricing approach in general terms. The meaning and adjustment of a provisional sum depend on the contract. Take professional advice where the value or risk is significant.