Cash Allowance is?

• A. Monetary sum specified by A/E and included in price to pay for unspecified products. Included required taxes.
• B. A fixed discount for early payment.
• C. A method to estimate cost.
• D. The final contract amount.

Answer: (A)

A cash allowance is a monetary sum set by the architect/engineer and included in the contract price to cover the cost of items that have not yet been specified or selected. It acts as a budget within the contract for purchasing those unspecified products, and the actual costs are settled later—through change orders—when the items are chosen and installed. It is not a discount for early payment, not a method of cost estimation, and not the final contract amount. Taxes related to the purchased items are handled as part of the actual costs of those items, while the cash allowance provides the funding in the contract for them.