MATERIAL ALLOWANCE: The amount of money allocated to cover the cost of material(s) and any applicable sales tax only, excluding the labor to install the specified material(s), overhead and profit not included.

What are allowances in construction?

A construction allowance is an amount established in the contract documents to include in the total contract price intended to cover the cost of prescribed items that are not specified in enough detail.

What is an allowance in an AIA contract?

Allowance” has. been defined in one dictionary as: An amount established in the contract documents for inclusion in the. contract sum to cover the cost of prescribed items not specified in detail, with provision that variations between such amounts and the finally.