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Contracts

Section D-7
Allowances

Allowances should be converted to include a defined scope of work as quickly as possible. When allowances are called for in the specifications, all items included therein should be clearly stated.

Unless otherwise provided in the Contract Documents:

Allowances shall cover the cost to the Contractor, of the materials, labor and equipment required to be delivered, furnished and installed at the site.
Allowances should clearly state whether the costs of freight, installation, unloading and handling, and tax are included.
The contract should define whether Contractor's overhead and profit are to be applied to adjustments in the contract price.
Whenever the cost is more than, or less than the allowance, the Contract Sum shall be adjusted accordingly by Change Order.
Where any trade discounts shall be applied to materials, said discount shall be granted to the Owner.
The contract documents should fully describe the materials and associated costs in the allowances.

TAGS: Allowances, Change Orders, and Specifications.

Glossary Terms for the Best Practices Guide

History of Recommendation:
Revised May, 2009
Revised January, 1992
Reviewed May, 1990
Reviewed April, 1987
Revised June, 1985

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