A Prime Cost Sum is intended to make allowance for specialist work that is detailed and which the developer wishes the main contractor to include in his tender return. The works described in the pricing document as a Prime Cost Sum may then be carried out by a Works Contractor or nominated subcontractor.
Why provisional sum is important?
Provisional sums are generally an allowance or estimate (often described as a “best guess”) included within the contract price of a construction contract for works that are: not sufficiently defined, designed or detailed to allow an accurate determination of its cost at the time the contract is entered; and/or.
What is meant by 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 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 …
What is the difference between prime cost sum and provisional sum?
A provisional sum sets aside money for specific building work when there is not enough detail to provide a fixed price (if an item has not yet been purchased or chosen and the installation cost is unknown). A prime cost sum does not include any installation costs unless stated.
What is a PC sum in a quote?
The PC Sum, or Prime Cost Sum, mostly refers to the costs of fixtures and fittings. Providing serial/model numbers, and the exact quantities needed of your PC items will allow the contractor to give a more accurate PC Sum in your tender costs.
How is provisional sum defined?
A provisional sum is defined as ‘an estimate of the cost of carrying out particular work (including the cost of supplying any materials needed for the work) under a domestic building contract for which a builder, after making all reasonable enquiries, cannot give a definite amount at the time the contract is entered …
Why do you decide not to apply provisional sum in your proposed project?
The risks of using provisional sums and the NEC3 approach Even on a purely commercial basis, using a provisional sum creates uncertainty, both for the employer and the contractor. For this reason it is best practice to use them sparingly, so that they make up only a small part of a project.
What is provisional sum and prime cost?
Traditionally, a prime cost is limited to the cost of supplying the relevant item, and does not include the cost of any work that relates to it (such as its installation). In contrast, provisional sums include allowances for both the supply item and all related work to be performed by the contractor.
What is provisional sum in bill of quantities?
A provisional sum is an allowance (or best guess), usually estimated by a cost consultant, that is inserted into tender documents for a specific element of the works that is not yet defined in enough detail for tenderers to accurately price.
How to calculate profit and attendance in prime cost sum?
Profit is the difference between sales and cost as per formula; Profit = Sales – Cost So profit can never be considered as cost or revenue. How do you calculate Selling Price if you know Cost price and Profit percentage?
What is a Prime Cost Allowance and a provisional sum?
What is a prime cost allowance and a provisional sum? Prime cost (PC) items and provisional sums (PS) are two items often included in a building contract which can cause great confusion among home owners.
What is the definition of a prime cost sum?
Provisional Sum: Measurement Rules: Section A A.8 PRIME COST SUM The term prime cost sum is defined as a sum provided for work or services to be executed by a nominated sub-contractor, a government or a statutory authority or for materials or goods to be obtained from a nominated supplier.
Do you get a profit on prime cost?
Contractor is not entitled for any profit on prime cost items, but sometimes the cost of carriage will be provided if specified in contract. The FIDIC Conditions of Contract do not mention about prime cost. Definition of Prime cost by ICE (Institution of Civil Engineers, Great Britain)
