What is a provisional sum in a building quote?

A provisional sum is an allowance for work whose scope is known in principle but not yet defined in detail. The number sits inside the contract sum at tender, but the work it covers is not committed until the scope confirms. When that happens, the PSum is replaced by the actual cost via a variation instruction issued by the Contract Administrator.

What is the difference between a provisional sum and a PC sum?

A provisional sum is for work whose scope is undefined. A prime cost sum (PC sum) is for a named item, usually a material or specialist trade, where the supplier is identified at tender but the price is held open. PSums get replaced when scope confirms. PC sums get replaced when the supplier confirms the actual cost at instruction.

Why did my builder add money after I signed a fixed-price contract?

The additions are processed as variation instructions issued by the Contract Administrator, usually the architect on a residential JCT contract. Variations against the exclusion schedule, draws against provisional sums, and adjustments where qualifications proved wrong on site are the legitimate mechanisms by which a signed contract sum changes. They are how a fixed-price tender becomes a variable final account.

When is a fixed-price contract the right choice for a renovation?

When the scope is fully defined before tender, intrusive surveys are complete, the building stock is predictable, and the client prefers single-point accountability over ongoing visibility into cost build-up. Modern apartments, post-1960s structures, and full-refurb projects with a closed design package fit. Period properties mid-renovation with partial surveys do not.

What fixed-price contracts hide

What "fixed price" actually means in a UK residential contract

"Fixed price" in a UK residential construction contract means a single contract sum agreed before work starts, paid against a programme of valuations, and adjusted only by the mechanisms the contract itself permits. The standard contract forms in the £150,000 to £1,000,000 bracket are the JCT Intermediate Building Contract (JCT IBC) and the JCT Standard Building Contract (JCT SBC). Both are lump-sum forms published by the Joint Contracts Tribunal. Both contain detailed variation clauses.

The contract sum is fixed against a specific scope: the drawings, the specification, and the schedule of works as they exist on the contract date. Anything not on those documents is not in the price. Anything assumed by those documents that turns out not to be true on site is not in the price either. The qualifications block attached to the tender lists the caveats, and the headline figure is fixed only inside those caveats.

So "fixed" does work, but a narrower one than the word suggests. Four mechanisms inside the contract move the price after signing: provisional sums, prime cost sums, exclusions, and qualifications. The next section takes each in turn.

The four categories of cost that are almost never fixed

A provisional sum (PSum) is an allowance for work whose scope is known in principle but not yet defined in detail. The number sits inside the contract sum but is not committed. When the scope confirms, the PSum is replaced by the actual cost via a variation instruction. The RICS New Rules of Measurement (NRM2) sets out the standard PSum treatment in sections 2.11 to 2.13. A contractor pricing tight will use PSums aggressively; a contractor pricing honestly will use fewer, larger ones.

A prime cost sum (PC sum) is an allowance for a named item, usually a material or specialist trade, where the supplier is identified but the price is held open. The kitchen at £35,000 PC. The marble at £180 per square metre PC. The lift specialist at £42,000 PC. The supplier is nominated; the actual cost is confirmed at instruction.

Exclusions are the schedule of what the price does not include. A tender carrying 15 to 30 exclusion lines is normal in the residential market. Common ones: VAT, party wall awards, planning conditions, listed building consents, contaminated land removal, asbestos beyond the survey, professional fees. Each excluded item that arises during construction is priced as a variation against the contract sum.

Qualifications are the assumptions built into the price: programme duration, working hours, site access, ground conditions, structural condition, supply lead times. Any qualification proven wrong on site reopens the line of cost it qualified. A 12-week programme qualified at tender becomes a 16-week programme priced as a variation.

Any one of these four mechanisms moves the contract sum. Taken together, they typically move it by 10 to 20% on residential refurbishment work. The mechanism is structural to fixed-price procurement, not specific to any single contractor. A cost plan handles the same uncertainty differently. How a cost plan differs from a quote is precisely that the cost plan names every PSum, PC sum, exclusion and qualification as a separate line, rather than folding them into one headline figure.

The variation order economy

Variations are the formal mechanism by which a signed contract sum changes. Under a JCT IBC or SBC contract, the Contract Administrator issues a Variation Instruction. In residential projects that role is normally the architect. The contractor prices the work, the price is agreed, and the variation is added to the running register that adjusts the final account. Where the project runs without a formal Contract Administrator, the client signs the instruction directly.

This is the legitimate process. It exists for a reason. Buildings reveal things drawings cannot show, and the contract has to absorb that without collapsing.

Take a tender that won the job at £450,000 carrying 25 exclusion lines and £80,000 in provisional sums. The signed contract sum is the headline. The variations register is where the project gets priced for real. Every excluded item, every PSum confirmed at actual, every qualification proven wrong, lands in that register as a priced variation.

A contractor pricing for tender knows this. The incentive is to come in at the lowest defensible headline figure and recover through the variation pipeline. Myrmex is subject to the same incentive on fixed-price work; the mechanism is built into the procurement model. The alternative is to settle the scope before signing a contract, which is what a Pre-Construction Services Agreement does.

A worked example: a £450,000 quote that became £520,000

A worked example using industry-typical figures for a £450,000 lump-sum residential tender. The numbers below are illustrative. They map to the standard NRM2 ratios and the typical residential refurbishment final-account profile, not a single named project. The mechanism is what matters: each line moves the headline figure in a way the homeowner did not see at signing.

The tender returned a headline contract sum of £450,000. The schedule of exclusions ran to 22 items. Provisional sums totalled £60,000, around 13% of the contract sum. Prime cost sums for nominated finishes and the specialist lift package totalled £15,000, around 3%.

Construction started. Inside the first six weeks three variation instructions hit the register. Variation 1: asbestos discovered at strip-out beyond what the pre-tender survey identified, requiring licensed-contractor removal under HSE protocol, priced at £8,400. Variation 2: a structural opening on the ground floor 600mm wider than the drawing showed, requiring redesigned padstones and a heavier steel section, priced at £6,200. Variation 3: soil-pipe re-routing required after strip-out revealed the existing run terminated above first-floor level rather than at basement as drawn, priced at £4,800. Variation subtotal: £19,400.

In parallel the provisional sums drew down at actual. The kitchen PSum landed £4,200 over allowance, after the client confirmed an upgraded units specification at the supplier survey. The waterproofing PSum landed £11,800 over allowance, after tanking was required to a lower-ground-floor rear wall not visible at the original survey. The structural steel PSum landed £6,600 over allowance, after the structural engineer's site inspection prompted larger section sizes. PSum over-allowance subtotal: £22,600.

Two qualifications were proven wrong on site and reopened. The first: a 16-week programme assumption that the asbestos delay and structural redesign together pushed to 20 weeks, adding £14,000 in programme-related preliminaries uplift. The second: the tender priced single-stair access on the assumption of standard working hours, but the building manager required scheduled deliveries and an out-of-hours window for trades affecting common parts, adding £4,000. Qualifications subtotal: £18,000.

The PC sums confirmed at instruction landed £10,000 above allowance, driven by the specialist lift package and an ironmongery uplift.

Final account: £520,000. Delta from headline: £70,000, or 15.6% over the contract sum. The figure sits squarely inside the 10 to 20% range named in §2.

The homeowner did not get a bad contractor. They got the standard procurement model performing as designed.

What fixed-price is genuinely good for (and Myrmex will use it when it fits)

The criticism above is of fixed-price as a default, not fixed-price as a tool. The model fits a defined set of conditions.

The conditions Myrmex looks for before recommending a JCT lump-sum contract are practical, not ideological. The project scope is fully defined before tender. Drawings finalised, specifications closed, intrusive surveys complete, structural engineer's package signed off. The building stock is predictable, typically post-1960s structures, or modern apartments inside documented blocks, where what is behind the walls broadly matches what is on the drawings. The client prefers a single contract sum at signing over ongoing visibility into cost build-up.

On a project that meets those three conditions, the lump-sum form serves the client. The contractor carries the cost risk inside the headline figure. The variations register stays short. The procurement model matches the project.

Where any of those three conditions is absent, the price will move regardless of who signs the contract. A Victorian or Georgian property mid-renovation with partial surveys. A basement extension. A project where the design is still resolving at tender. In each case, the construction management route with a Pre-Construction Services Agreement settles the scope before the price is committed, which is the model Myrmex is built around.

What to ask before signing a fixed-price contract

Six questions to put to a contractor before signing a fixed-price tender. None of them are difficult. A contractor unwilling to answer plainly is the answer.

How many exclusions are on the schedule? Fifteen to thirty lines is normal in residential; over forty is a tender priced light.

What is the total provisional sum and prime cost sum value, and what percentage of the contract sum is that? A £450,000 tender with £90,000 in PSums and PC sums is 20% of the contract sum held open. The reader is signing for £450,000 of work; only £360,000 is actually priced.

What is the contractor's variation pricing mechanism? Preferred supplier at agreed rates, day rates with multipliers, or three competitive quotes. Each produces different prices. The mechanism is named in the contract or it is not.

What is the contractor's process for confirming provisional sum scope before instructing the work? A PSum that draws down at actual without a written scope confirmation is a dispute waiting to occur.

Who signs off variations on the client side? Surveyor, architect, project manager, or the homeowner direct. The choice changes how fast variations process and how disciplined the running cost log stays.

Is the contingency held by the client or built into the contract sum? Contingency built into the contract sum is contingency the contractor controls. Contingency held by the client is contingency the client controls.

Before a tender is even in hand, the renovation cost calculator produces an indicative range. Once a tender lands, the questions above are what separate the headline figure from the figure the project settles at.

The contract sum is what you sign. The variations register is what you pay.