Lump sum, schedule of rates and provisional items: reading the pricing schedule.

A pricing schedule hides quantity, scope and volume assumptions inside lump sums, unit rates and provisional items. None of those figures is a guaranteed volume. Read the request before you make a commercial price call. This is one read in how to read a 400-page tender in a day.

Published: 16 September 2026 · By Andre · Reviewed by Bill · selrob

Takeaways

Lump sum buys a closed task list. Extra plant, extra frequencies and extra sites sit inside the number unless the pack says otherwise.
Indicative quantities on a schedule of rates are for comparison. They are not take-or-pay.
Provisional items are instructed, or they are zero. Do not bank them in the bid case.
Interpretation stops at the assumptions. The margin call is a separate page.

What is hidden in this price request?

Three different promises, often in one workbook. A lump sum is a price for a defined scope, payable whether that scope was easy or not. A schedule of rates is a price per unit for work the buyer may or may not instruct. A provisional item is a rate or sum the buyer may activate later. The comparison total that the evaluation team will add up is not the revenue you will earn.

The pack’s pricing instructions control the meaning. If they say quantities are indicative, they are indicative. If they are silent, write the assumption and ask. Do not repair silence by treating the comparison total as a forecast.

How does a lump sum fail you?

It fails when the task list is not closed. “Planned preventative maintenance of mechanical plant” is not a quantity. It is a list in another schedule, plus every asset the buyer later says was obviously included. Rise-and-fall, if any, is a separate clause. If the lump is fixed for three years with no index, the labour assumption inside it is a bet. That is the recurring-service problem on thin-margin FM tenders, read here as a scope question rather than a margin question.

How does a schedule of rates fail you?

It fails when you staff and overhead-recover as if the indicative hours will occur. Four hundred business-hours on a comparison sheet is a scoring device. Payment is for hours instructed. Under-run is idle labour and stranded overhead. Over-run is a roster problem, not a windfall, if the rate was built on a quiet mix. Mix is the second trap: the same total hours with twice the after-hours share is a different job.

How does a provisional item fail you?

It fails when the bid case includes it as expected revenue, or when the rate is used to subsidise the firm work. If the buyer never instructs the chiller overhaul, you have performed a discount in public and collected nothing. Price provisionals to stand alone. Leave them out of the base comparison you take to the gate.

Worked example

Annotated schedule: Western Ranges hard FM

Hypothetical. The buyer, tender and figures are invented to show the fields in use; they are not a client result. Unit rates in the last column are the delivery-floor rates built on price to win versus price to deliver. They are not competitor prices and they are not an award forecast.

Annotated pricing schedule, completed hypothetical example
Line	Description	Basis	Unit	Indicative qty / year	What the request means	Delivery-floor rate (AUD)
LS-01	Planned preventative maintenance, mechanical, two campuses	Lump sum	year	1	Firm annual lump for the PPM task list in Schedule 2 only. Reactive work is not included. Term is three years; no CPI in this pack.	156,000
SOR-01	Reactive mechanical attendance, 07:00–18:00 weekdays	Schedule of rates	hour	400	Indicative only. Paid for hours instructed. No minimum volume.	110
SOR-02	Reactive mechanical attendance, after hours	Schedule of rates	hour	80	Indicative only. Mix can move without the total hours moving.	135
SOR-03	Supply and replace AHU filter set	Schedule of rates	set	250	Indicative only. Unit is a complete set as specified, not a single filter.	54
PI-01	Strip and overhaul of nominated chiller	Provisional	item	1	Instructed only if the Trust issues a direction. May be zero.	39,500
PI-02	Additional BMS points, supply and commission	Provisional	point	40	Instructed only if directed. Do not include in the base comparison.	310

Base comparison total at those rates, excluding provisionals: $156,000 + (400 × $110) + (80 × $135) + (250 × $54) = $224,300 a year.

Blank template

Blank units and quantity log

Units and quantity assumptions log, blank form
Line	Unit means	Quantity is	Hidden assumption	If the assumption is wrong
		Firm / indicative / provisional
		Firm / indicative / provisional
		Firm / indicative / provisional

Worked example

Units, quantities and a volume-mix check

Hypothetical. The buyer, tender and figures are invented to show the fields in use; they are not a client result.

Units and quantity assumptions, completed hypothetical example
Line	Unit means	Quantity is	Hidden assumption	If the assumption is wrong
LS-01	One year of the Schedule 2 PPM task list, two campuses	Firm	The task list is closed. Labour inside the lump is enough at today’s wages for three years.	Extra assets or frequencies sit in the lump. No CPI: wage drift comes out of margin.
SOR-01 / SOR-02	One attended hour, one technician, travel included	Indicative. 400 + 80 = 480 hours	After-hours share stays at 80 / 480 (16.7 percent). 480 hours will occur.	Under-run: idle time. Mix shift: same hours, more night work.
SOR-03	One specified AHU filter set, supply and replace	Indicative. 250 sets	Set means the specified pack, not a single panel.	A cheaper unit read as “filter” under-prices the line.
PI-01 / PI-02	One overhaul; one commissioned BMS point	Provisional	Zero unless directed. Not in the base comparison of $224,300.	If fully instructed: +$39,500 + (40 × $310) = +$51,900. Do not bank it.

Sensitivity

What happens to the comparison total when volume or mix moves?

Hypothetical. The buyer, tender and figures are invented to show the fields in use; they are not a client result. Same rates as the schedule above. This table interprets the request. It does not decide whether the margin is defensible.

Volume and mix sensitivity, completed hypothetical example
Case	SOR-01 hours	SOR-02 hours	SOR-03 sets	Provisionals	Annual comparison (AUD)	What changed
Base (indicative qtys)	400	80	250	Excluded	224,300	The evaluation add-up at delivery-floor rates.
Volume −30 percent	280	56	175	Excluded	203,810	Same mix, fewer units. Lump unchanged. Indicative hours were not a promise.
Mix shift, same 480 hours	320	160	250	Excluded	226,300	After-hours doubled. Comparison total moves only $2,000. The job is not the same.
Provisionals fully instructed	400	80	250	Included	276,200	$224,300 + $51,900. A direction, not a forecast.

Where does interpretation stop?

Here. You now know which quantities are firm, which are indicative, and which may never be instructed. You know that a mix shift can leave the comparison total almost still while the work changes. Carry unresolved assumptions to a clarification, or to the second gate at re-qualifying at pricing.

Whether $224,300, or a lower figure someone wants to write in, covers delivery is not a reading question. That call is price to win versus price to deliver.

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