What is Provisional Sum in Construction

Contracts?
Generally provisional sum is an amount allocated for a specialized work by a
specialized firm, for which the details are not available at the time of tender. The
provisional sum amount will be a best guess at the time of tender by the
employer or contractor depending upon the type of provisional sum. Hence claim
made by the contractor need not necessarily be the exact amount mentioned in
the contract.

Definition of Provisional Sum by FIDIC Conditions of Contract

“Provisional Sum” means a sum (if any) which is specified in the Contract as a
provisional sum, for the execution of any part of the Works or for the supply of
Plant, Materials or services under Sub-Clauses 13.5(Provisional Sums).

Examples of provisional sums

Provisional sum need not be always allocated specifically for a single task.
Sometimes part of contract itself may be made a provisional sum. There can be
one or more than one provisional sum item in a contract. To elaborate, let us take
the example of site clearance. There may be so many unpredictable items in site
clearance. Consider an infrastructure project involving flyover, roads etc. wherein
the regular items of clearance include asphalt road, paving blocks, kerb, signal
poles, crash barriers, guard rails, sign boards, storm water drainage pipe lines,
sewerage pipe lines, manholes, catch pits, gullies, trees, bushes, shrubs,
buildings, fencing, compound walls, sculptures and monuments, concrete
structures etc. In addition there will be items specific to the site as well. Many
items will be measurable at the time of tender but some of the turn out to be
uncertain. For example, quantum of work involved in removal of a site specific
item like sculpture or monument may become difficult to ascertain. One way to
overcome this difficulty is to allocate these as a separate provisional sum item in
the BOQ.

What are different types of provisional sums?

According to SMM7, Standard Method of Measurement seventh edition,

provisional sums are divided into two categories; defined and undefined. In
defined type, contractor is supposed to make due allowance in his quote for such
item and it is to be incorporated in the project plan. In undefined type, contractor
need not make allowance in the quote nor this item need to be incorporated in
the project plan.
Detailed information of defined and undefined type of provisional sums are
available here.

Is it binding for the contractor to execute the provisional sum items within
time mentioned in project programme?

Though FIDIC describe in detail about valuation of provisional sums, it do not

clearly mention the relationship with project programme. Generally provisional
sums are not a universally accepted method since it is not advisable to include
an item in the contract whose scope is not clearly defined.

How the claim is made for provisional sums?

The method of claim depends upon the arrangement made at the time of
execution based on the detailed information. Usually the procedure is similar to a
variation claim. For example the contractor floats enquiries and collects
quotations. After evaluation, the finalized quotation is forwarded to client for
approval with the details of agency proposed to do the work. The employer on his
discretion may decide whether to proceed with the contractor’s proposal or not.
In some cases the work will be directly allotted to specialized agency if so
desired by the employer.