Prime cost sum - Revision history

Designing Buildings at 07:53, 2 January 2023

2023-01-02T07:53:09Z

← Older revision		Revision as of 07:53, 2 January 2023
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	= What is a prime cost sum? =		= What is a prime cost sum? =

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	The contractor should make reasonable provisions within their price for prime cost sums, however, these can prove inadequate, and so prime cost sums can be a source of increased costs and disputes.		The contractor should make reasonable provisions within their price for prime cost sums, however, these can prove inadequate, and so prime cost sums can be a source of increased costs and disputes.
−
−

	In addition, the courts have generally taken the view that risk in relation to the performance of a nominated sub-contractor lies with the client and not the contractor. This means that delay to the overall programme caused by a nominated sub-contractor can lead to a claim for extension of time under the main contract and entitlement to consequential losses.		In addition, the courts have generally taken the view that risk in relation to the performance of a nominated sub-contractor lies with the client and not the contractor. This means that delay to the overall programme caused by a nominated sub-contractor can lead to a claim for extension of time under the main contract and entitlement to consequential losses.

Designing Buildings at 07:51, 2 January 2023

2023-01-02T07:51:20Z

← Older revision		Revision as of 07:51, 2 January 2023
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−	= ~~Introduction~~ =	+	= What is a prime cost sum? =

−	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be ~~[[Nominated_sub-contractor\|~~nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).	+	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be nominated by the client - that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed. The allowance is exclusive of any profit mark up or attendance by the main contractor such as material handling, scaffolding and rubbish clearance, etc.

−	~~The allowance is exclusive~~ of ~~any profit mark up or attendance (such as material handling~~, ~~scaffolding~~ and ~~rubbish clearance~~, ~~etc.)~~ by the ~~main contractor~~.	+	Payments are made based on the quotations/invoices of the supplied items by the contractor plus addition of reasonable/agreed percentages for overhead costs and profits. If the contractor's actual cost is higher than the allowance, then the contract sum will be increased and if the cost to the contractor is lower, then the contract sum will be reduced by the balance.

−	~~Payments~~ are ~~made based on the quotations/invoices~~ of the ~~supplied items by the contractor plus addition of reasonable/agreed percentages~~ for ~~[[Overheads\|overhead costs]] and profits~~. ~~If the contractor's actual~~ cost ~~is higher than the bill of quantities allowance, then the contract~~ sum ~~will be increased to balance it up~~ and ~~if the cost to the contractor is lower, then the contract~~ sum ~~will be reduced by the balance~~.	+	Prime cost sums should not be confused with provisional sums which are allowances for specific elements of the works not yet defined in enough detail for contractors to price. For more information, see The difference between a prime cost sum and a provisional sum.

−	~~The contractor should make reasonable provisions within their price for~~ prime cost sums~~, however, these can prove inadequate, and so prime cost sums can be a source of increased costs and disputes.~~	+	= Why are prime cost sums used? =

−	~~Prime cost sums have become less common in recent years as~~ the ~~nomination process has fallen out~~ of ~~favour with clients.~~	+	Nominated subcontractors or suppliers are generally selected prior to the appointment of a main contractor for one of three reasons:

−	~~Historically, nominated subcontractors or suppliers were selected prior to the appointment of a main contractor for one of three reasons:~~	+	* For long delivery items where design and manufacturing times cannot wait for the appointment of a main contractor. For example, lifts, switchgear or refrigeration plant.
−		+	* Where specialist design input is required in the early stages of design development. For example, for a cladding system.
−	* For long delivery items where design and manufacturing times ~~could not~~ wait for the appointment of a main contractor. For example, lifts, ~~[[Switchgear\|~~switchgear]] or refrigeration plant.	+
−	* Where specialist design input ~~was~~ required in the early stages of design development. For example, for a cladding system.	+
	* Where the client directly orders a preferred piece of equipment on which design is to be based. For example, an MRI scanner, laboratory fume cupboards or bottling plant.		* Where the client directly orders a preferred piece of equipment on which design is to be based. For example, an MRI scanner, laboratory fume cupboards or bottling plant.

−	~~It should be noted that~~ the ~~courts~~ have ~~generally taken the view that risk~~ in ~~relation to~~ the ~~performance~~ of ~~a nominated sub-contractor lies~~ with ~~the client and not the contractor~~. ~~This means that delay to the overall programme caused by a nominated sub-~~contractor can ~~lead to~~ a ~~claim for extension~~ of ~~time under the main contract~~ and ~~entitlement to consequential losses~~.	+	= What are the problems associated with prime cost sums? =
		+
		+	Prime cost sums have become less common in recent years as the nomination process has fallen out of favour with clients.
		+
		+	The contractor should make reasonable provisions within their price for prime cost sums, however, these can prove inadequate, and so prime cost sums can be a source of increased costs and disputes.
		+

−	~~Prime cost sums should not be confused with provisional sums which are allowances for specific elements of the works not yet defined in enough detail for contractors to price.~~

−	~~For more information~~, ~~see The difference between~~ a ~~prime cost sum~~ and a ~~provisional sum~~.	+	In addition, the courts have generally taken the view that risk in relation to the performance of a nominated sub-contractor lies with the client and not the contractor. This means that delay to the overall programme caused by a nominated sub-contractor can lead to a claim for extension of time under the main contract and entitlement to consequential losses.

−	= ~~Definition~~ =	+	= NRM definition of prime cost sums =

−	~~NB:~~ 'NRM1: Order of cost estimating and cost planning for capital building work' defines a prime cost sum as; '...a sum of money included in a unit rate to be expended on materials or goods from suppliers (e.g. supply only ceramic wall tiles at £36.00/m2, supply only door furniture at £90.00/door or supply only facing bricks at £390.00/1,000).	+	'NRM1: Order of cost estimating and cost planning for capital building work' defines a prime cost sum as; '...a sum of money included in a unit rate to be expended on materials or goods from suppliers (e.g. supply only ceramic wall tiles at £36.00/m2, supply only door furniture at £90.00/door or supply only facing bricks at £390.00/1,000).

	'It is a supply only rate for materials or goods where the precise quality of those materials and goods are unknown. PC Sums exclude all costs associated with fixing or installation, all ancillary and sundry materials and goods required for the fixing or installation of the materials or goods, subcontractor’s design fees, subcontractor’s preliminaries, subcontractor’s overheads and profit, main contractor’s design fees, main contractor’s preliminaries and main contractor’s overheads and profit.'		'It is a supply only rate for materials or goods where the precise quality of those materials and goods are unknown. PC Sums exclude all costs associated with fixing or installation, all ancillary and sundry materials and goods required for the fixing or installation of the materials or goods, subcontractor’s design fees, subcontractor’s preliminaries, subcontractor’s overheads and profit, main contractor’s design fees, main contractor’s preliminaries and main contractor’s overheads and profit.'

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Attendance.		* Attendance.

Designing Buildings at 05:58, 27 August 2020

2020-08-27T05:58:05Z

← Older revision		Revision as of 05:58, 27 August 2020
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	* Variations.		* Variations.

−	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Product_Knowledge]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 05:57, 27 August 2020

2020-08-27T05:57:33Z

← Older revision		Revision as of 05:57, 27 August 2020
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	* Variations.		* Variations.

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

Designing Buildings at 07:46, 3 February 2020

2020-02-03T07:46:57Z

← Older revision		Revision as of 07:46, 3 February 2020
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		+	= Introduction =
		+
	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).		A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).

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	* Where the client directly orders a preferred piece of equipment on which design is to be based. For example, an MRI scanner, laboratory fume cupboards or bottling plant.		* Where the client directly orders a preferred piece of equipment on which design is to be based. For example, an MRI scanner, laboratory fume cupboards or bottling plant.

−	It should be noted that courts have generally taken the view that risk in relation to the performance of a nominated sub-contractor lies with the client and not the contractor. This means that delay to the overall programme caused by a nominated sub-contractor can lead to a claim for extension of time under the main contract and entitlement to consequential losses.	+	It should be noted that the courts have generally taken the view that risk in relation to the performance of a nominated sub-contractor lies with the client and not the contractor. This means that delay to the overall programme caused by a nominated sub-contractor can lead to a claim for extension of time under the main contract and entitlement to consequential losses.

	Prime cost sums should not be confused with provisional sums which are allowances for specific elements of the works not yet defined in enough detail for contractors to price.		Prime cost sums should not be confused with provisional sums which are allowances for specific elements of the works not yet defined in enough detail for contractors to price.

	For more information, see The difference between a prime cost sum and a provisional sum.		For more information, see The difference between a prime cost sum and a provisional sum.
		+
		+	= Definition =

	NB: 'NRM1: Order of cost estimating and cost planning for capital building work' defines a prime cost sum as; '...a sum of money included in a unit rate to be expended on materials or goods from suppliers (e.g. supply only ceramic wall tiles at £36.00/m2, supply only door furniture at £90.00/door or supply only facing bricks at £390.00/1,000).		NB: 'NRM1: Order of cost estimating and cost planning for capital building work' defines a prime cost sum as; '...a sum of money included in a unit rate to be expended on materials or goods from suppliers (e.g. supply only ceramic wall tiles at £36.00/m2, supply only door furniture at £90.00/door or supply only facing bricks at £390.00/1,000).
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	'It is a supply only rate for materials or goods where the precise quality of those materials and goods are unknown. PC Sums exclude all costs associated with fixing or installation, all ancillary and sundry materials and goods required for the fixing or installation of the materials or goods, subcontractor’s design fees, subcontractor’s preliminaries, subcontractor’s overheads and profit, main contractor’s design fees, main contractor’s preliminaries and main contractor’s overheads and profit.'		'It is a supply only rate for materials or goods where the precise quality of those materials and goods are unknown. PC Sums exclude all costs associated with fixing or installation, all ancillary and sundry materials and goods required for the fixing or installation of the materials or goods, subcontractor’s design fees, subcontractor’s preliminaries, subcontractor’s overheads and profit, main contractor’s design fees, main contractor’s preliminaries and main contractor’s overheads and profit.'

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

	* Attendance.		* Attendance.
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	* Defined provisional sum.		* Defined provisional sum.
	* Final account.		* Final account.
−	* Final certificate.
	* Nominated sub-contractor.		* Nominated sub-contractor.
	* Outturn cost.		* Outturn cost.

Designing Buildings: Reverted edits by 77.98.235.59 (talk) to last revision by Designing Buildings

2020-02-03T07:20:47Z

Reverted edits by 77.98.235.59 (talk) to last revision by Designing Buildings

← Older revision		Revision as of 07:20, 3 February 2020
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−	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed ).	+	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).

	The allowance is exclusive of any profit mark up or attendance (such as material handling, scaffolding and rubbish clearance, etc.) by the main contractor.		The allowance is exclusive of any profit mark up or attendance (such as material handling, scaffolding and rubbish clearance, etc.) by the main contractor.

77.98.235.59 at 16:21, 2 February 2020

2020-02-02T16:21:50Z

← Older revision		Revision as of 16:21, 2 February 2020
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−	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).	+	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed ).

	The allowance is exclusive of any profit mark up or attendance (such as material handling, scaffolding and rubbish clearance, etc.) by the main contractor.		The allowance is exclusive of any profit mark up or attendance (such as material handling, scaffolding and rubbish clearance, etc.) by the main contractor.

Designing Buildings: Reverted edits by 195.194.244.185 (talk) to last revision by 193.62.251.36

2018-12-11T11:25:42Z

Reverted edits by 195.194.244.185 (talk) to last revision by 193.62.251.36

← Older revision		Revision as of 11:25, 11 December 2018
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	Prime cost sums have become less common in recent years as the nomination process has fallen out of favour with clients.		Prime cost sums have become less common in recent years as the nomination process has fallen out of favour with clients.

−	Historically, nominated subcontractors or suppliers were selected prior to the appointment of a main contractor for one of three reasons: ~~this is nonsense~~	+	Historically, nominated subcontractors or suppliers were selected prior to the appointment of a main contractor for one of three reasons:

	* For long delivery items where design and manufacturing times could not wait for the appointment of a main contractor. For example, lifts, [[Switchgear\|switchgear]] or refrigeration plant.		* For long delivery items where design and manufacturing times could not wait for the appointment of a main contractor. For example, lifts, [[Switchgear\|switchgear]] or refrigeration plant.

195.194.244.185 at 09:19, 11 December 2018

2018-12-11T09:19:10Z

← Older revision		Revision as of 09:19, 11 December 2018
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	Prime cost sums have become less common in recent years as the nomination process has fallen out of favour with clients.		Prime cost sums have become less common in recent years as the nomination process has fallen out of favour with clients.

−	Historically, nominated subcontractors or suppliers were selected prior to the appointment of a main contractor for one of three reasons:	+	Historically, nominated subcontractors or suppliers were selected prior to the appointment of a main contractor for one of three reasons: this is nonsense

	* For long delivery items where design and manufacturing times could not wait for the appointment of a main contractor. For example, lifts, [[Switchgear\|switchgear]] or refrigeration plant.		* For long delivery items where design and manufacturing times could not wait for the appointment of a main contractor. For example, lifts, [[Switchgear\|switchgear]] or refrigeration plant.

193.62.251.36 at 17:16, 30 November 2018

2018-11-30T17:16:50Z

← Older revision		Revision as of 17:16, 30 November 2018
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−	~~Yer dad is full of biscuits~~
−
	A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).		A prime cost sum (PC or PC sum) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be [[Nominated_sub-contractor\|nominated]] by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main contractor after the main contractor has been appointed).