May I add that when the Engineer makes a decision regarding the provsional sum, two questions must be considered: What and when.
For the What, was the provsional sum defined or undefined (according to SMM7 definition)? If it was undefined, or if the scope of nominated subcontractor has increased from the original given scope, there is a possibility of obtaining extension of time (and a variation). If not the chance is less.
For the When, I usually include in all my schedules milestones for the Engineer to make decisions regarding each provisional sum. These milestones would be logically linked to the relative activity. The duration of that activity would be estimated based on the contract documents concerning the provisional sum, or otherwise based on the best guess.

Another case to share that might be of interest to somebody. We are currently building a hospital. The original BOQ included a provisional sum of 8M USD for medical equipment and furniture. The Engineer has nominated 17 medical equipment contractors for that provsional sum, instead of one. I submitted a claim and won it (with difficulty) for extra time and cost on the basis of seggregating the provisional sum into multiple contracts which we (the Contractor) had to deal with each one of them, instead of dealing with one. (the contract is a FIDIC 87/92).

Joe

Hi Razi,

I would suggest that you may have a fair right to claim EOT where the Engineer/Architect issues an instruction as to how and when Provisional Sums should be spent. A Provisional Sum is simply a bag of money allowed for carrying out a part of the Works, without any indication of the workscope, quantities or time involved.

Under JCT80 Form of Contract, Provisional Sums are under the same Clause heading as Variations (Clause 13). Under Clause 25.3 of JCT80, the Contractor is entitled to an EOT as a result of a Relevant Event, which by definition under Sub-Clause 25.4, includes dealing with an Architect’s instruction under Sub-Clauses 13.2 and 13.3. Sub-Clause 13.3 addresses the expenditure of Provisional Sums.

Following this concept, Razi, I suggest that you look at your EOT Clause, and it should allow you to have an EOT as a result of implementing instructions issued by the Client/Engineer/Architect. Work is ear-marked “Provisional” simply because the Client doesn’t know precisely what he wants to have done – sometimes he doesn’t even have a Specification to relate to. Consequently, he wants to make a financial provision in the Contract Price to ensure that there is enough money in the budget for the particular item, but normally he fails to include a time provision for the item (usually in the hope that the Contractor will offer to consume his own float in carrying out this additional work.)

There is a school of thought that considers that it is appropriate for the Contractor to have already made some allowance in his programme for executing “Provisional Items”, but this is dependant upon the Provisional Sum being “defined”. SMM7, for example, makes reference to “defined” and “undefined” Provisional Sums, and defined Provisional Sums are deemed to have their programming requirements already included in the Contract Schedule. Execution of an undefined Provisional Sum will allow an EOT to be claimed.

If you do not have such clarification as SMM7 in your Contract, then I am afraid that we may be back to the “how long is a piece of string?” argument! My advice would be that if the extent of additional work arising from a Provisional Sum is substantial, then the Contractor should be entitled to an EOT even where the Provisional Sum is not exceeded, since there would be no other criteria in the Contract documentation for the Contractor to gauge the nature and extent of work that was to be carried out, and he is, after all, carrying out a formal instruction.

The crux of the matter, however, really also relates to WHEN the instruction in regard to the Provisional Sum was issued. It may be impossible to carry out the additional work without it impacting the CP, due to the specialist nature of the work, or long lead times etc.. In such a case I would certainly pursue the right to claim an EOT.

With regard to your second point about “Declaration”, I have come across this a few times in regard to “Options”, in which the Client has the option to have a part of the Works increased (or decreased) during the engineering phase for technical reasons. These “options” which the Client may or may not use normally have a “sell-by” date; in other words, the Client only has a limited time in which he can exercise the options on offer. If he does take up the option before the “sell-by” date, then usually the Contractor is not entitled to an EOT, but if the Client calls for the option at a later date, then the Contractor is usually entitled to an EOT.

I hope this helps.

Cheers,
Stuart

That’s what I said essentially, no claim unless under exceptionally onerous circumstances...

Dear Razi,

a) as a general rule so far as my past experience with JCT and FIDIC (Redbook) type clauses, there is no possiblity of you claiming for any time extension on the basis of partial or whole expenditure of the Prov Sum. Of course if the scope described or sum provided can be proven as grossly under provided, and the additional time required for the increased scope can be proven to have impacted or overextended any activities on the critical path, I reckon that a fair Contract Administrator would not disregard any well presented application.

b) I have not come across any such "declaration" in the past, but if they possess the common attributes of provisional or prime cost(PC) sums for which the scope and value of each declaration are described in sufficient details and accuracy, and for which the contractor is reimbursed a percentage of the sum/s as his "profits and attendance", I am inclined to guess that the EOT entitlement would as per case a) above.