Also called: allowances, cash allowance, provisional sum.
Typical allowances: $8 per square foot for tile not yet chosen, $1,500 for light fixtures, $2,000 for unforeseen deck repair. The contractor carries the number in the total, then bills the difference up or down when the real figure is known.
Allowances are honest when the item genuinely cannot be specified yet, and a problem when they are used to make a total look competitive. An allowance set deliberately low reads as a lower bid and reconciles into a higher final cost.
When comparing bids, check whether the allowance amounts match. Two bidders carrying different allowances for the same undecided item are not offering the same price, even where the bottom lines agree.
Why it matters
Allowances are the one part of a bid that is designed to change. Comparing totals without comparing the allowances inside them compares two guesses, not two prices.
Related terms
- Exclusion — An exclusion is work a contractor has explicitly stated their price does not cover. Exclusions are a legitimate and normal part of a bid — the danger is not that they exist, but that they are easy to miss.
- Change order — A change order is a written amendment to a signed contract that adds, removes or alters work, and adjusts the price and schedule accordingly. It is the mechanism by which a job's final cost stops matching the bid you accepted.
- Scope of work — A scope of work is the written, itemised description of exactly what a contractor will do on a job — the tasks, the materials, the quantities and the conditions. It is what a price is a price for.
- Unit price — A unit price is a per-unit rate — per square foot, per linear foot, per sheet, per fixture — agreed in advance so that work of unknown quantity can be priced without renegotiation.
Quotrium drafts the scope, sends it to the contractors you pick, and scores every bid against it line by line. See how it works.