What does provisional sum mean?

What does provisional sum mean?

Provisional sum items in a building contract are elements of the project that cannot be precisely costed in advance. The builder will include a “provisional” amount in the contract based on their best estimate, and the final cost will be adjusted once the work is complete.

What is included in provisional sum?

Provisional sum

  • The nature and construction of the work.
  • A statement of how and where the work is fixed to the building and what other work is to be fixed thereto.
  • A quantity or quantities that indicate the scope and extent of the work.
  • Any specific limitations and the like.

What is the difference between lump sum and provisional sum?

In other words, where a lump sum contract price includes a provisional sum, the final amount payable by the principal will be adjusted to reflect the actual cost of the provisional sum work.

What is mean by provisional items?

Related Definitions Provisional items means items for which only very approximate quantities have been included in the tender documents.

Can provisional sum be exceeded?

However, in some circumstances, unforeseen events mean that the provisional sum is exceeded, sometimes by a significant amount. This can be added to the contract sum. For example, a building site may seem sandy and clean with minimal siteworks required.

Do provisional sums include GST?

If this Schedule is used, both the Owner and Contractor must retain copies. All prices include GST.

What is the difference between provisional sum and provisional item?

A PC item is an amount of money included in a contract sum to purchase a specified item such as tiles, taps, doors or bathroom fittings. A provisional sum is an amount of money included in the contract sum to cover work or materials, or both, the extent of which cannot be specifically detailed when entering a contract.

Does provisional sum include builders margin?

‘Builder’s margin’ For example, the builder includes a provisional sum for the installation of feature cladding of $5,000 in their quote. The final cost of supplying and installing the cladding (remembering that the PS includes supply and labour) ends up being $7,700; which is $2,700 more than what was allowed.

Do provisional sums need to be instructed?

Provisional Sum Adjustment The general concept of Provisional Sums is they are omitted under instruction from the employer and replaced with the actual cost of the work if instructed.

What is provisional work?

Wiktionary. provisional jobnoun. A job that can be filled without being appointed from a civil service list.

What is a provisional sum adjustment?

The provisional sum mechanism in construction contracts is used for adjusting the contract sum for items where actual costs are unknown at the time the contract is entered into.

What are bathroom PC items?

A PC item is an amount of money included in a contract sum to purchase a specified item such as tiles, taps, doors or bathroom fittings. An agreed estimated amount is included at contract signing but the specific products are not selected until a later stage.

How does a provisional sum work in construction?

A provisional sum is an allowance included in a fixed price construction contract for an item of work that cannot be priced by the contractor at the time of entering the contract. How do provisional sums work?

What is the FIDIC definition of a provisional sum?

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).

How is a provisional sum treated under as 2124?

For example, under both AS 2124 and AS 4000, the definition of ‘provisional sum’ includes prime cost items. The result is that provisional sums and prime costs are treated exactly the same way under these contracts.

What do you mean by provisional sum in NRM?

A quantity or quantities that indicate the scope and extent of the work . Any specific limitations and the like. If this information is not provided, NRM suggests the provisional sum is considered undefined, irrespective of what it is called in the tended documents .

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