Provisional sum
A provisional sum is an allowance in the contract price for work not yet fully defined - when the work is performed, the allowance is deducted and the actual value substituted under the contract's valuation rules.
The risk sits in the adjustment machinery: who values the work, at what rates, and whether margin attaches to the adjusted amount. Drafting that lets the builder omit provisional sum work entirely - or have it done by others - can quietly shrink your contract.
Why it matters to subbies
Price the valuation rules, not the allowance. And check whether overhead and profit follow the adjustment - on some drafting, the substituted value arrives bare.
Keep reading
General information for Australian subcontractors, not legal advice - contract drafting and state legislation vary and change; your document and your state's Act govern. Written by Mat Kennedy at The Construction Contracts Co.