Provisional Sums in Construction Contracts: A QS Guide

Open almost any UK bill of quantities and you will find at least one line that isn't priced in the normal way - just a round figure with a description attached. That is a provisional sum, and getting it right is one of the more quietly important jobs a quantity surveyor does on a project.

This guide explains what provisional sums construction practice actually means in day-to-day terms: what they are, how NRM2 splits them into defined and undefined categories, and how they differ from prime cost sums and contingencies - three terms that get mixed up constantly on site and in the office.

It also covers the practical side: how provisional sums get included in a bill of quantities, how they're instructed and valued as the works proceed, and who carries the risk when the eventual cost is nothing like the original allowance.

Finally, we look at where provisional sum expenditure most often ends up in dispute, so you can spot the warning signs before an argument over a few thousand pounds of undefined groundworks turns into a full-blown claim.

What Is a Provisional Sum in a Construction Contract?

A provisional sum is inserted into the bill of quantities, or contract sum analysis, to cover an item of work that the design team cannot accurately describe or measure at tender stage. Common examples include work below an existing structure where ground conditions are unknown, statutory undertaker connections whose scope depends on a utility company's survey, or a specialist finish where the exact specification hasn't been chosen yet.

Defined Provisional Sums

A defined provisional sum has enough information attached - nature, extent, location and any spatial constraints - for a tenderer to allow for it in their programme, method statement and preliminaries pricing, even though the exact cost isn't known. Because the contractor is expected to have planned around it, they generally have limited grounds to claim extra time or loss and expense purely because the sum is later instructed.

Undefined Provisional Sums

An undefined provisional sum lacks that detail - the work simply cannot be planned for in advance. A classic example is opening up below an existing building where the condition of the substructure won't be known until it's exposed. Because the contractor had no reasonable basis for programming or pricing this risk, most standard forms give more generous entitlement to extension of time and associated costs when an undefined sum is instructed.

Provisional Sums vs Prime Cost Sums vs Contingencies

These three terms all describe money set aside for things that aren't fully fixed at tender stage, but they work very differently and mixing them up causes real problems in cost reporting.

A contingency sum sits apart from both. It's a general buffer for genuinely unforeseen costs, is not tied to a specific bill item, and - unlike a provisional sum - may never be spent at all. Many standard forms don't even give the contractor contractual authority to draw on a contingency; it's held and released at the employer's or contract administrator's discretion, often outside the formal instruction mechanism used for provisional sums.

How Provisional Sums Sit in the Bill of Quantities

Under RICS NRM2, any item that can't be measured and described in line with the standard tabulated rules must be given as a provisional sum, clearly marked 'defined' or 'undefined'. The sum is included in the tender total like any other bill item, so contractors price and compare like-for-like at bid stage - but everyone involved understands it's a placeholder, not a firm price.

• Defined provisional sums must state the nature and construction of the work, how and where it's located, and any limitations on method or sequence.
• Undefined provisional sums typically carry only a brief description, since the detail simply isn't available yet.
• Both are listed separately from measured work and PC sums in the bill summary, so the tender total remains transparent.
• The classification should be reviewed as the design develops - an undefined sum can sometimes be redefined once more information becomes available before tender.

Getting the defined/undefined split right at bill production stage matters more than it might seem. Mislabel a genuinely undefined risk as 'defined', and you've quietly shifted programme and pricing risk onto a contractor who had no realistic way of allowing for it - which is exactly the kind of decision that resurfaces later as a claim.

Instructing and Valuing Provisional Sum Expenditure

A provisional sum only turns into real cost once it's formally instructed. Under JCT contracts, that's an Architect's or Contract Administrator's instruction under clause 3.16, telling the contractor exactly what work to carry out against the allowance. Under NEC4, expenditure of a provisional sum is typically dealt with as a compensation event, valued through the NEC's own assessment mechanism rather than a straight bill valuation.

Valuation usually follows one of two routes: measuring the completed work against bill rates where comparable items exist, or obtaining a fair quotation where the work has no like-for-like rate. Either way, the QS's job is to substitute a real, evidenced cost for the original round-figure allowance at each interim valuation, so the contract sum tracks what has actually happened rather than what was guessed at tender.

Timing matters as much as the figure. A late instruction on an undefined provisional sum - especially one on the critical path - can trigger an extension of time claim well before the valuation argument even starts.

Risk Implications for Contractor and Employer

For the employer, provisional sums are a pragmatic way to get a project to tender before every design decision is finalised - but that flexibility comes at a cost. Every undefined sum is effectively an open cheque against final account certainty, and a design team that leans too heavily on provisional sums to avoid finishing the design ends up handing the employer a budget that looks precise but isn't.

For the contractor, the split between defined and undefined sums decides how exposed they are. A defined sum instructed broadly as described shouldn't generate a valid time or money claim, because the contractor was expected to price and programme around it. An undefined sum instructed differently from what could reasonably have been anticipated is a different matter entirely, and most standard forms - JCT and NEC4 included - recognise that by giving more generous entitlement to loss and expense or compensation in those circumstances.

• Employers should insist provisional sum descriptions are as detailed as possible, even where full definition isn't achievable, to reduce ambiguity later.
• Contractors should flag at tender if a sum labelled 'defined' actually reads as undefined - it's far cheaper to query the classification before signing than to dispute it after instruction.
• Both sides should track provisional sum expenditure against the original allowance throughout the project, not just at final account, so surprises surface early.

Common Disputes Over Provisional Sum Expenditure

The most frequent dispute isn't about the money itself - it's about classification. Contractors argue a sum labelled 'defined' was in fact undefined, entitling them to time and cost relief the employer never priced in. Employers argue the opposite: that a sum described as undefined actually gave the contractor enough information to have allowed for it.

A second recurring flashpoint is timing. Instructions issued late in the programme, particularly for undefined sums affecting critical-path activities, routinely trigger extension of time claims that dwarf the value of the underlying work.

A third is valuation methodology - whether instructed work should be measured against existing bill rates, star rates, or a fresh quotation, especially when the actual work bears little resemblance to what the provisional description anticipated. And a fourth, less discussed but common in practice, is the provisional sum that was never genuinely provisional at all - work the design team could have defined at tender but didn't, effectively using the mechanism to defer a decision rather than manage a real unknown. Adjudicators and the courts have shown limited patience with that approach when it's used to dodge proper design completion.

Frequently Asked Questions

What is a provisional sum in construction?

It's a sum of money included in the contract sum for work that cannot be fully designed, described or measured when tender documents are issued. It's an estimate, not a fixed price, and gets replaced by the value of the actual work once it's instructed and carried out.

What's the difference between a provisional sum and a prime cost sum?

A provisional sum covers work that isn't yet defined. A PC sum covers work or supply that is defined, but will be carried out by a sub-contractor or supplier the employer intends to nominate later, with the main contractor adding mark-up and attendance.

Is a provisional sum a fixed price?

No. It's an allowance that gets adjusted - up or down - once the actual scope is known and the work is instructed and valued. The employer isn't obliged to spend the full amount, or to instruct the work at all.

What happens if a provisional sum is not used?

If the work described by the provisional sum is never instructed, the allowance is simply omitted from the final account. Depending on the contract, the contractor may still be entitled to recover reasonable costs already incurred in anticipation of it, such as preliminaries time allowed for in their programme.

Who instructs the expenditure of a provisional sum?

Under JCT contracts, the Architect or Contract Administrator issues a formal instruction under clause 3.16. Under NEC4, the Project Manager typically deals with provisional sum expenditure as a compensation event.

Can a contractor claim loss and expense on a provisional sum?

It depends on classification. Undefined provisional sums usually carry stronger entitlement to loss and expense or an extension of time, since the contractor couldn't reasonably have planned for the work. Defined sums, instructed as described, generally don't.

How does NRM2 classify provisional sums?

RICS NRM2 requires any item that cannot be measured under the standard tabulated rules to be given as a provisional sum and marked either 'defined' - with enough detail to plan around - or 'undefined', where that detail simply isn't available yet.

Final Thoughts

Provisional sums are one of the few genuinely flexible tools in a UK construction contract - useful precisely because not everything can be designed before a project goes to tender. But that flexibility only works if the defined/undefined classification is applied honestly, instructions are issued promptly, and valuations are grounded in real evidence rather than the original guess.

Get those three things right and provisional sums do exactly what they're meant to: let a project start on a realistic budget while genuine unknowns are resolved. Get them wrong, and they become one of the most predictable sources of final account disputes on the job.

Want the full picture? Want the full picture on cost documents?

For the wider context on how provisional sums are built into pricing documents and paid out during construction, see our guides to Bill of Quantities Explained: A Quantity Surveyor's Guide and Interim Valuations in Construction: A Complete Guide for QS.