Design and Build Risk I’ve found as a Quantity Surveyor

As a homeowner, you may not be aware of the concept of a provisional sum, but it’s essential to understand its implications on your project. According to a study by the Royal Institution of Chartered Surveyors (RICS), a provisional sum accounts for approximately 45% of the contract value, which can vary significantly from the final amount.

The provisional sum is not part of the contract and is not guaranteed by the contractor. In fact, the price will change due to the lack of definition, even in the New Engineering Contract (NEC) framework. This highlights the risk that clients take on when using provisional sums, as they are not entirely clear about the costs involved.

The contractor will only instruct the provisional sum upon receiving further information or guidance from the client. This can lead to delays in the program of works and increase costs for the client. In some cases, the provisional sum can be substantial, and its inclusion can significantly impact the project’s budget.

A study by the Royal Institution of Chartered Surveyors (RICS) suggests that provisional sums can be treated as a rough estimate, which is often inaccurate due to insufficient information. This can lead to clients taking on unnecessary risk and facing unexpected costs. To mitigate this risk, it’s recommended to obtain a complete design of the property or work with a Quantity Surveyor to create a bill of quantity.

A Quantity Surveyor can help clients prepare a bill of quantity that is priced against a standard method of measurement, such as the New Rules of Measurement 2 (NRM 2). This can provide clarity on the costs involved and help consultants understand the pricing structure. Alternatively, clients can opt for a design and build contract, where the contractor takes on the risk of the incomplete design.

Ultimately, it’s crucial for homeowners to be aware of the provisional sum and its implications on their project. By understanding the risks and taking steps to mitigate them, clients can ensure a smoother and more cost-effective construction process.