The difference between a prime cost sum and a provisional sum

Confusion can arise regarding two items that may appear in standard forms of building contract – prime cost sums (PC or PC sums) and provisional sums (PS). They both relate to estimates made for certain costs in the absence of exact figures.

A prime cost sum is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a sub-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 main contractor is entitled to add mark up and attendance costs to the allowance. If the main contractor's actual costs then turn out to be higher, the contract sum is increased, and if the main contractor's actual cost is lower, the contract sum is reduced.

For more information see: Prime cost sum.

A provisional sum is an allowance, usually estimated by a cost consultant, for a specific element of the works that is not yet defined in enough detail for tenderers to accurately price.

Depending on the degree to which the works that the provisional sum relates to can be described at the tender stage, prime cost sums may be referred to as 'defined' or 'undefined':

• Defined provisional sums are those which have been described in sufficient detail that the contractor is expected to have made allowance for them in their programming, planning and pricing preliminaries. An example might be where a defined amount of brickwork is required, but the brick that will be used has not been selected and so the price cannot be determined.
• Undefined provisional sums are less well described and so the contractor cannot be expected to make allowance for them in their programming, planning and pricing preliminaries. This means the contractor may be entitled to an extension of time and /or additional payments when the actual works are undertaken. An example of an undefined provisional sum might be when work is required below an existing structure, but the ground conditions, and so the extent of work required, cannot be determined until the existing structure is demolished and the ground opened up.

For more information see: Provisional sum.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki

• Bill of quantities.
• Consequential loss.
• Contract conditions.
• Contract sum.
• Difference between preliminaries and preambles.
• Extension of time.
• Preliminaries.
• Prime cost sum.
• Provisional sum.
• Variations.

Comments

Is PC for a specific element? It seems that it does not match the Home Building Contract?

It is for a specific element of the works. This is a term used in the UK, it may be that definitions / contract terms are different in other countries.