Last edited 31 Aug 2020

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 contractprime 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, provisional sums may be referred to as 'defined' or 'undefined'.

For more information see: Provisional sum.

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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.

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