Provisional Sum (PS) Allowance
Provisional Sum (PS) allowances are used in most fixed price construction contracts, and are perfectly reasonable, in the correct situation.
A PS figure is a monetary allowance for the supply and install of works required to complete the project, for which the final cost cannot accurately be determined. A provisional sum must allow for all items required to complete the works, including labour & material.
The biggest problems around PS allowances are a lack of understanding of what is included in the allowance, and a lack of proper foresight leading to an inadequate allowance.
Below we have included some common PS allowance examples and the thinking behind them.
The two biggest factors in the earthworks costs are site retaining and soil classification.
The soil classification tells the structural engineer the specific structural requirements for the foundations. This test and classification is typically not carried out until a preliminary agreement has been signed.
Site retaining is dependant on the design and the existing site conditions, and can vary in expense so broadly that a particular design may end up unfeasible once retaining has been factored in.
Given these two factors, it’s obvious that earthworks are difficult to accurately estimate until the design process has mostly been completed.
Cabinetry selections are usually made after the contract is signed, either in the builders pre-start selection process or with an interior designer. Often the cabinetry design still won’t be fully resolved until this point. Due to this, it’s reasonable for a builder to include a sufficient provisional allowance for the cabinetry supply and install.
Along with cabinetry, landscaping is a very personal touch which has a massive impact on the feel for your home overall. It may be that the design is not resolved, or that you are waiting to see how much is left in the budget at the end to spend on landscaping. Whatever the reason, it’s understandable for the builder to make a provisional allowance for landscaping.