Differences Between Prime Cost & Provisional Sums
There seems to be a lot of confusion with the terms Prime Cost (PC) and Provisional Sums (PS). It is important that everyone involved in the construction process is clear on what they mean or otherwise this can lead to muddled thinking. If this happens it may distract you from what it is you are trying to achieve.
The purpose of them is to recognise that there will be a cost but we cannot say exactly how much at the moment.
Similarities & Differences
The similarity between these two sums is that they are both for amounts allowed within a fixed price specification or tender to cover a sum of money which is not defined. The actual costs will be determined later and the allowed sums are omitted and replaced.
PC Sum
A PC Sum is invariably due to a direction from the client – a nomination – which is an instruction stating, a specific contractor or supplier must be engaged to carry out a portion of works. Often this is a statutory supplier, providing say an electrical supply or so forth. They are the only body allowed to carry out the works in your area and they will charge within their guidelines.
This is not however necessarily the case and it can be a sub-contractor of any type providing a product. The client with his consultants will have decided a particular sub-contractor is to be instructed through the main contractor who will be responsible for liaising with and payments to the sub-contractor.
PS
A PS is an amount of money allowed within a tender or specification to cover the cost of an item. The specific cost is not known at the time and so an approximate sum is allowed. An example could be the cost for the supply and installation of kitchen cabinets. The actual supplier or actual range are not yet selected and so a definitive cost cannot be provided. A sum is allowed which will be a ball park figure for the expected cost.
Can you have too many PC Costs and PS’s ?
It is reasonable to have a few items at the earlier stages of any project where not all matters are completely resolved. If too many are included, all parties are unclear on where the final costs shall end up and if the budgets will be sufficient.
As a general rule try to minimise the numbers of unknowns and keep a firm grip on budgets.
Fitzpatrick Team can assist by designing work packages and will limit undefined costs as your knowledge of your budget is definitely an advantage. Give Mark a call to assist.
Technical/Legal Point: Different forms of contract treat Prime Costs and Provisional Sums differently. This article is a general guide and specific situations will vary. Please take advice in relation to your project.
