What is a provisional sum?

A guide from Costd. Read time 3 minutes.

Provisional sum

A provisional sum is an allowance in the contract for work the builder cannot price accurately at the time of quoting, most often because the extent is unknown. Excavation and rock removal, footings on uncertain ground and asbestos removal are typical. When the work is done, the actual cost replaces the allowance. If it costs more, you pay the difference plus the builder margin on it. If it costs less, you are credited.

Prime cost item

A prime cost item is an allowance for the supply of something you have not selected yet: tiles, tapware, appliances, light fittings. The labour to install is usually in the contract price; only the item itself is the allowance. Choose something dearer and the difference, plus margin, becomes a variation.

Why they matter

• They are the easiest way to make a quote look cheaper than the job will be.
• In Victoria, the Domestic Building Contracts Act requires provisional sums and PC items to be a reasonable estimate, and the builder must have made reasonable enquiries. A number plucked from the air is not compliant, but you still have to notice it.
• A fair quote has few provisional sums, each with a written reason, and PC allowances that match what you actually want to buy.

What to do before signing

• List every provisional sum and PC item with its amount.
• Ask why each item is provisional and what it could realistically become.
• Check PC allowances against real prices for the products you want.
• Add the realistic totals to the contract price before you compare builders.

Our contract check reads the money clauses in plain English, including every provisional sum and PC item, and tells you which ones are normal, which are worth a question and which should stop you. Start a contract check.

This guide is general information from a registered builder, not legal or financial advice. More guides · Pricing