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Provisional Sums — Definition, Expenditure, and Recovery

Provisional sums are a familiar feature of construction contracts, yet they are among the most misunderstood. Treating them as guaranteed revenue has consequences — for pricing, for programming, and for final account recovery.

4 min read · Updated 21/04/2026

In this article

1. Why provisional sums are misunderstood
2. Defined versus undefined provisional sums
3. Practical application in pricing and programming
4. Risks on both sides
5. Mitigation through clear drafting
6. Conclusion

Key takeaway

Provisional sums are allowances, not guarantees. The distinction between defined and undefined provisional sums under NRM2 and JCT SBC is commercially significant: for defined sums the contractor is expected to have allowed for programming and attendance; for undefined sums reasonable cost is recoverable when the work is instructed. Under most standard contracts, the employer is not obliged to instruct provisional sum work at all.

1. Why provisional sums are misunderstood

The core problem with provisional sums is the gap between commercial expectation and legal reality. A contractor that sees AED 5 million of provisional sums in its bills of quantities may factor this into its overhead recovery and profit calculation. If the employer then decides not to instruct the provisional sum work — because the project scope changes, budget constraints emerge, or the works prove unnecessary — the contractor loses not only the direct cost recovery from those items but potentially the overhead and profit contribution that they were expected to produce.

A related problem arises in relation to programming. If the contractor has planned its sequence around the expectation that provisional sum work will be carried out at a specific time, and the work is never instructed — or is instructed much later — programme disruption may result that the contractor cannot easily recover.

2. Defined versus undefined provisional sums

The distinction between defined and undefined provisional sums, introduced under the RICS New Rules of Measurement (NRM2) and incorporated into the JCT Standard Form of Building Contract, is significant.

Under most standard contracts, the employer is not obliged to instruct provisional sum work at all. Where it is not instructed, the provisional sum amount is simply deducted from the contract sum — the contractor receives nothing for it.

3. Practical application in pricing and programming

For contractors

Do not treat provisional sums as guaranteed revenue when pricing preliminaries or calculating overhead recovery. Identify defined and undefined provisional sums separately in the tender. For defined PS, ensure the programme reflects the expected timing of that work and include allowances accordingly. For undefined PS, include appropriate allowances in programme contingency and recover reasonable cost when they are instructed.

For employers

Recognise that if defined provisional sum work is instructed significantly later than the programme anticipated — or in a sequence that disrupts the main works — the contractor may have a legitimate claim for programme disruption. Provisional sums do not give the employer unlimited flexibility to instruct work at any time without consequence.

4. Risks on both sides

For contractors, the risk is over-reliance on provisional sums as a revenue source, followed by a cash flow and profit shortfall when they are not instructed. For employers, the risk is assuming that provisional sum instructions can be timed at will without programme or cost consequence for the contractor. Both risks are most acute where the PS amounts represent a material percentage of the overall contract value, which is common on UAE fit-out and infrastructure works.

5. Mitigation through clear drafting

At tender stage, clearly distinguish defined from undefined provisional sums. Include programming obligations for defined PS explicitly in the tender documents, so that both parties understand the tendering basis. During the project, communicate early about which provisional sums will be instructed and when — allowing the contractor to plan accordingly rather than absorbing late instructions into an already-constrained programme.

6. Conclusion

Provisional sums are a necessary feature of construction procurement — but they are allowances, not guarantees. Both parties need to understand the distinction between defined and undefined provisional sums, the programming implications of each, and the legal basis on which provisional sum work is valued when instructed. On UAE projects where PS totals can run into the tens of millions, the technical drafting around these items is rarely neutral.

Review your PS allowances

On large UAE contracts, provisional sum management frequently determines whether the project closes out on margin or at a loss. An independent review of PS pricing and programming often reveals recoverable positions.

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