Views in the last 30 days: 134
Estimated read time: 3 minute(s)
🚧 Quick Definition: Provisional Sum
In FIDIC contracts, a Provisional Sum is an allowance inserted by the Employer in the Bill of Quantities (or Schedule of Prices) for work, services, or goods that are not fully defined during the tender stage.
Think of it as a “placeholder budget” that’s kept aside — it only comes into play if the Engineer instructs it. Until then, it’s just a line on paper with potential.
📌 Key takeaway:
It’s not part of the contract sum until used — no instruction, no payment!
🔍 Where the Rules Live
Here’s where the Provisional Sum provisions are tucked inside the FIDIC documents:
| FIDIC Edition | Clause Heading | Key Sub-Clause |
|---|---|---|
| Red / Yellow / Silver 1999 | 13.5 Provisional Sums | 13.5 |
| FIDIC Suite 2017 | 13.5 Provisional Sums | 13.5 |
📌 Important: Both editions say nearly the same thing — the Engineer may instruct work under a Provisional Sum, and payment will be based on actual cost plus the Contractor’s percentage for overheads and profit — not the lump sum allowance itself.
🧠 How Provisional Sums Work (Step-by-Step)
The Employer’s Quantity Surveyor (QS) inserts a round figure—say $200,000—into the BoQ line labeled “Provisional Sum for specialist instrumentation.”
Because this work is uncertain, Contractors usually enter 0 against that line. The sum is carried into the BoQ total without markup.
When the scope becomes defined, the Engineer issues an instruction detailing the actual work required.
The Contractor then either sources quotations or nominates a specialist subcontractor with supporting documentation.
Payment is made based on measured quantities or agreed lump sums — all backed by invoices and proof of cost, not the placeholder value.
On top of the actual cost, the Contractor is entitled to overhead & profit percentages as defined in the Contract Data.
Any part of the Provisional Sum not used by instruction remains untouched and is deducted from the Contract Price in the final account.
⚖️ Why Use Provisional Sums?
| Reason | Typical Example |
|---|---|
| Specialist packages not fully scoped at tender | SCADA, security, façade access equipment |
| Client-selected vendors to be named later | Artwork, furniture, landscaping features |
| Allowances for statutory fees or utilities | Authority connection charges |
🔧 Contractor Tips
- Track Instructions – Only spend against a Provisional Sum with a written Engineer’s order.
- Document Cost – Save quotations, invoices, and daywork sheets. You’ll need them for valuation.
- Watch Cash Flow – You don’t receive the full amount upfront. Only actual costs + markup are paid.
- Negotiate Percentages Early – Confirm your overhead & profit percentages are realistic in the Contract Data before signing.