Provisional sums, PC items and contingency
A provisional sum is an allowance included in the contract sum for work that is not yet defined well enough to price, adjusted later against what the work actually costs. A prime cost item is an allowance for supplying an item that has not yet been selected, with your installation, attendance and margin priced separately. Contingency is different in kind: it is money set aside against risk, and depending on whose contingency it is, it may sit inside the contract sum, inside your margin, or in the client's own budget where you never see it.
How is each one adjusted?
A provisional sum is included at the stated amount and then adjusted when the work is defined and instructed, so the contract sum moves up or down accordingly. The mechanism sits in the contract, and the detail of it, particularly whether you recover margin and attendance on the adjustment, is worth reading before you rely on it.
A prime cost item works similarly for a supplied item: the allowance covers the supply, and the actual cost replaces it once the item is chosen. Contingency is not adjusted by anyone; it is either spent or it is not.
Where do teams get caught?
On margin and attendance. A provisional sum adjusted at cost, with no allowance for your overhead, supervision or programme impact, means the more of the contract sits in provisional sums the thinner your recovery on the job as a whole.
The second trap is treating a provisional sum as certainty. A large provisional sum is unpriced scope, and unpriced scope is where the programme risk hides: the work is instructed late, defined by someone else, and expected inside the original dates.
What should you check in the tender?
Four things. How the adjustment is valued and whether margin and attendance are recoverable. What proportion of the total sits in provisional sums and PC items rather than defined work. Who defines the scope later, and by when.
Then the programme question everyone leaves out: whether an instruction against a provisional sum carries an extension of time when it lands late. If it does not, the allowance is a schedule risk wearing a commercial label.
The three compared
| Term | What it covers | How it is settled | Watch for |
|---|---|---|---|
| Provisional sum | Work not yet defined well enough to price | Adjusted against the actual defined work when instructed | Whether margin, attendance and time are recoverable on the adjustment |
| Prime cost item | Supply of an item not yet selected | Actual supply cost replaces the allowance | That your installation, attendance and margin are priced separately |
| Contingency | Money held against risk | Spent or not; no adjustment mechanism | Whose contingency it is, and whether it is visible to the other party |
Common questions
What is a provisional sum?
A provisional sum is an allowance included in the contract sum for work that cannot yet be defined well enough to price. When the work is defined and instructed, the allowance is adjusted against what the work is actually valued at, moving the contract sum up or down.
What is the difference between a provisional sum and a PC item?
A provisional sum covers work that is not yet defined. A prime cost item covers the supply of a specific item that has not yet been selected, with your installation, attendance and margin priced separately against it. One is about undefined work, the other about an unchosen product.
Do you earn margin on a provisional sum?
Only if the contract says so. Some forms allow margin and attendance on the adjusted amount, others settle at cost. Check it before tender, because a contract sum heavily loaded with provisional sums can carry far less recovery than the headline value suggests.
Can Elora Grid find the provisional sums in a pack?
Yes. Hand it the tender and it returns every provisional sum and prime cost item with its stated amount, the clause governing how each is adjusted, and whether margin, attendance and time are addressed, each cited to source. What allowance to carry stays your decision.