I think this probably means plumbing fixtures and lighting fixtures but I would clarify this.

If the only project in the contract is the bathroom, and you are buying all the fixtures yourself, you and and your contractor may want to rethink the contract.

The contractors I use do contracts like yours if they are responsible for supplying everything because they charge above their cost to determine the allowances. (They mark up the prices on what they pay).

When I did a job where I was supplying all of the fixtures and a certain amount of the finish materials, they would do time and materials contracts (materials being construction materials I didn't supply). This is generally more expensive in terms of labor because it is an hourly rate.

In any case you want to clarify exactly who is supplying what, and how this affects the overall budget. Again, when clients supply certain materials, and pay X for it, the contractor does not subtract X from the allowance, it is usually X minus something.

In my current reno/addition I am adding a bath. My fixtures allowance (excluding lighting which was NOT included) was $3500. I did the same as you, except my builder told me I was fine because he was giving me things at cost. So I would go shopping give him my model numbers and best price, he would check his suppliers. The only thing he got at a better price was the tub surround. So he purchased that for $547, I paid cash for everything else. At the end of the bathroom construction he will take the $3500, subtract the $547 he paid for the tub and refund the difference off the balance of the contract. Does that make sense?

Wow thanks Ineffable and CBlanco for your answers. I guess there's more room for interpretation here than I thought.