A provisional sum is a preliminary allocation of funds for a specific activity in a construction project that has not yet been fully defined. This provision is essential, as it allows for a rough estimate of costs, enabling clients to incorporate the sum into their budget. Construction projects often involve varying degrees of uncertainty, making a provisional sum a crucial component. According to a survey by the Royal Institution of Chartered surveyors, the use of provisional sums can be attributed to the uncertainty in project scope, client preferences, or planning process outcomes (Royal Institution of Chartered surveyors, 2020).
In the context of measured building surveys and topographical surveys, architects may request a provisional sum quotation to propose to their clients. This request acknowledges that the extent of the construction proposal is not always known, and a rough estimate is required to facilitate budget planning. In many cases, the client or architect is not entirely aware of the scope of the project, necessitating a ballpark figure to include in their budget. Insights from research by the Chartered Institute of Building, suggest that a significant proportion of construction projects involve the use of provisional sums due to complexity and uncertainty (Chartered Institute of Building, 2019).
The key characteristics of a provisional sum are that it is (1) an approximate figure, (2) allocated for an undefined or variable activity, and (3) not part of the scope for deliverables until instructed to proceed by the client. When a provisional sum is instructed, the architect or surveyor will confirm the scope and price (if any changes are made) and proceed accordingly. In this phase, the client is responsible for allocating funds to the itemised provisional sum (Royal Institution of Chartered surveyors, 2020).
It is essential to note that clients do not need to pay for provisional sums in the contract as they are not defined as deliverables. This aspect of provision sums should be clearly outlined in the quotation to prevent misunderstandings. A commonly cited concern is the practice of ‘fudging’ the provisional sum value, presenting it as part of a lump sum without intending to deliver the associated items (Chartered Institute of Building, 2019).
To avoid confusion, clients should ensure that provisional sums are itemized in the quotation, making it easier to identify the relevant amounts when applying for fees. It is also worth highlighting that contractors, surveyors, and designers will not need to deliver the provisional sum until instructed to proceed by the client. In any case, ensure accurate budget planning and scope definition to prevent unnecessary costs or lost opportunities. MCS, for instance highlights budget maintenance in project rollout as a good practice.
Provisional sums serve an essential purpose in the construction industry, providing a preliminary estimate and facilitating budget planning. While they require careful management to avoid misunderstandings, their utility cannot be overstated (Royal Institution of Chartered surveyors, 2020).
Remember to request itemized quotations and clearly outline the provisional sum provision and scope in your budget planning.
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