Prime cost contract - Revision history

Designing Buildings at 06:14, 2 September 2021

2021-09-02T06:14:16Z

← Older revision		Revision as of 06:14, 2 September 2021
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	NB: Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.		NB: Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.

−	~~= Find out more =~~	+	= Related articles =
−		+
−	=== Related articles ~~on Designing Buildings Wiki ==~~=	+

	* Construction contract.		* Construction contract.

Designing Buildings at 09:41, 14 September 2020

2020-09-14T09:41:26Z

← Older revision		Revision as of 09:41, 14 September 2020
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	* Tender.		* Tender.

−	[[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 13:54, 22 August 2018

2018-08-22T13:54:35Z

← Older revision		Revision as of 13:54, 22 August 2018
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	This method of procurement is not generally recommended, but it can be useful under particular circumstances where an immediate start on site is necessary (for example for urgent alteration or repair work, or if there has been a building failure or a fire, requiring immediate reconstruction or replacement of a building so that the client can continue to operate their business).		This method of procurement is not generally recommended, but it can be useful under particular circumstances where an immediate start on site is necessary (for example for urgent alteration or repair work, or if there has been a building failure or a fire, requiring immediate reconstruction or replacement of a building so that the client can continue to operate their business).

−	Tendering proceeds based on an outline specification, any drawings and an estimate of costs. The ~~Contractor~~ is paid the prime cost (the actual cost of labour, plant and materials) and a fee for overheads and profit. The fee can be agreed by negotiation or by competition, and may be a lump sum (which it may be possible to adjust if the actual cost is different from the estimate), or a percentage of the prime cost (which it may be possible to revise if the client changes the nature of the works).	+	Tendering proceeds based on an outline specification, any drawings and an estimate of costs. The contractor is paid the prime cost (the actual cost of labour, plant and materials) and a fee for overheads and profit. The fee can be agreed by negotiation or by competition, and may be a lump sum (which it may be possible to adjust if the actual cost is different from the estimate), or a percentage of the prime cost (which it may be possible to revise if the client changes the nature of the works).

	Other basis for payment are possible, including combinations of lump sum and percentage fees. For example, it might be possible to fix some elements of overheads whilst applying a percentage to other elements and to profit.		Other basis for payment are possible, including combinations of lump sum and percentage fees. For example, it might be possible to fix some elements of overheads whilst applying a percentage to other elements and to profit.
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	This is a high risk form of procurement for the client as they are reliant on the contractor working efficiently and procuring sub-contracts economically. Sub contracts may be procured competitively, but there may be little incentive for the contractor to secure or select economic bids. Some of these difficulties can be mitigated if a partnering relationship has been established between the client and the contractor.		This is a high risk form of procurement for the client as they are reliant on the contractor working efficiently and procuring sub-contracts economically. Sub contracts may be procured competitively, but there may be little incentive for the contractor to secure or select economic bids. Some of these difficulties can be mitigated if a partnering relationship has been established between the client and the contractor.

−	NB Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.	+	NB: Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.

	= Find out more =		= Find out more =
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	* Cost reimbursable contract.		* Cost reimbursable contract.
	* Cost plus contract.		* Cost plus contract.
		+	* JCT Design and Build Contract.
	* Outline specification.		* Outline specification.
	* Procurement route.		* Procurement route.

Designing Buildings at 15:35, 27 February 2017

2017-02-27T15:35:29Z

← Older revision		Revision as of 15:35, 27 February 2017
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	* Sub-contractor.		* Sub-contractor.
	* Tender.		* Tender.
−
−	~~=== External references ===~~
−
−	* JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].
−	* Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].

	[[Category:Contracts_/_payment]] [[Category:Procurement]]		[[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 16:33, 1 December 2016

2016-12-01T16:33:55Z

← Older revision		Revision as of 16:33, 1 December 2016
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−	Prime cost contracts (such as JCT PPC 05) are sometimes called cost plus contracts or cost reimbursement contracts.	+	Prime cost contracts (such as JCT PPC 11) are sometimes called cost plus contracts or cost reimbursement contracts.

	Prime cost contracts are used where an early or immediate start on site is required even though design information is not complete.		Prime cost contracts are used where an early or immediate start on site is required even though design information is not complete.

86.152.150.51 at 09:00, 21 September 2016

2016-09-21T09:00:23Z

← Older revision		Revision as of 09:00, 21 September 2016
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−
	Prime cost contracts (such as JCT PPC 05) are sometimes called cost plus contracts or cost reimbursement contracts.		Prime cost contracts (such as JCT PPC 05) are sometimes called cost plus contracts or cost reimbursement contracts.

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	Other basis for payment are possible, including combinations of lump sum and percentage fees. For example, it might be possible to fix some elements of overheads whilst applying a percentage to other elements and to profit.		Other basis for payment are possible, including combinations of lump sum and percentage fees. For example, it might be possible to fix some elements of overheads whilst applying a percentage to other elements and to profit.

−	This is a high risk form of procurement for the client as they ~~take~~ are reliant on the contractor working efficiently and procuring sub-contracts economically. Sub contracts may be procured competitively, but there may be little incentive for the contractor to secure or select economic bids. Some of these difficulties can be mitigated if a partnering relationship has been established between the client and the contractor.	+	This is a high risk form of procurement for the client as they are reliant on the contractor working efficiently and procuring sub-contracts economically. Sub contracts may be procured competitively, but there may be little incentive for the contractor to secure or select economic bids. Some of these difficulties can be mitigated if a partnering relationship has been established between the client and the contractor.

	NB Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.		NB Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Construction contract.	+
−	*Contractor.	+	* Construction contract.
−	*Cost reimbursable contract.	+	* Contractor.
−	*Cost plus contract.	+	* Cost reimbursable contract.
−	*Outline specification.	+	* Cost plus contract.
−	*Procurement route.	+	* Outline specification.
−	*Sub-contractor.	+	* Procurement route.
−	*Tender.	+	* Sub-contractor.
		+	* Tender.

	=== External references ===		=== External references ===
−	*JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].
−	*Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].

−	[[Category:Contracts_/_payment]]	+	* JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].
−	[[Category:Procurement]]	+	* Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].
		+
		+	[[Category:Contracts_/_payment]] [[Category:Procurement]]

Designing Buildings at 07:41, 9 October 2015

2015-10-09T07:41:57Z

← Older revision		Revision as of 07:41, 9 October 2015
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*~~Contract~~.	+	*Construction contract.
	*Contractor.		*Contractor.
	*Cost reimbursable contract.		*Cost reimbursable contract.

Designing Buildings at 07:24, 17 May 2014

2014-05-17T07:24:44Z

← Older revision		Revision as of 07:24, 17 May 2014
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	= Find out more =		= Find out more =

−	== Related articles on Designing Buildings Wiki ==	+	=== Related articles on Designing Buildings Wiki ===
−	*Client.	+
	*Contract.		*Contract.
	*Contractor.		*Contractor.
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	*Tender.		*Tender.

−	== External ~~links~~ ==	+	=== External references ===
	*JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].		*JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].
	*Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].		*Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].

Designing Buildings at 08:27, 11 January 2013

2013-01-11T08:27:09Z

← Older revision		Revision as of 08:27, 11 January 2013
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	== Related articles on Designing Buildings Wiki ==		== Related articles on Designing Buildings Wiki ==
−	*~~Procurement route~~.	+	*Client.
		+	*Contract.
		+	*Contractor.
	*Cost reimbursable contract.		*Cost reimbursable contract.
		+	*Cost plus contract.
		+	*Outline specification.
		+	*Procurement route.
		+	*Sub-contractor.
		+	*Tender.

	== External links ==		== External links ==

Designing Buildings at 17:08, 21 November 2012

2012-11-21T17:08:30Z

← Older revision		Revision as of 17:08, 21 November 2012
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	NB Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.		NB Some people consider that a cost reimbursable contract or cost plus contract is one in which the client takes all the risk, whereas a prime cost contract is one in which the cost of the works packages (the prime cost) are reimbursed but the main contractor takes a risk on staffing, overhead costs and profit which might be tendered on a fixed price.

−	= ~~See also~~ =	+	= Find out more =
		+
		+	== Related articles on Designing Buildings Wiki ==
	*Procurement route.		*Procurement route.
		+	*Cost reimbursable contract.
		+
		+	== External links ==
	*JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].		*JCT: [http://www.jctltd.co.uk/docs/Deciding%20on%20the%20appropriate%20JCT%20contract%202011%20Sept%2011%20version%202.pdf Deciding on the appropriate JCT contract].
	*Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].		*Constructing excellence: [http://www.constructingexcellence.org.uk/sectorforums/constructionclientsgroup/downloads/standard_formsLGTF.pdf A guide to standard forms of construction contract].
−	*Cost reimbursable contract.

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]
	[[Category:Procurement]]		[[Category:Procurement]]