This is a common question frequently asked and often misinterpreted in the construction industry. We understand the confusion, as both are used to provide estimates for different purposes. For example, kitchen appliances or tiles may not be listed in the schedule of finishes, or the scope of works may not be crystal clear.
In the event that a schedule of finishes hasn’t been provided, we would typically see a Prime Cost Sum (PC Sum) for tiling. Similarly, if the contractor has not received landscaping drawings, we are more likely to see a Provisional Sum included, or the landscaping trade excluded entirely from the contract sum.
The benefit of having, say a $100/m² PC Sum for floor tiles is that it allows clients to select a floor tile within that budget, while having the labour component associated with the installation included elsewhere in the construction budget as a fixed cost. However, a Provisional Sum for landscaping would include both labour and materials.
Christchurch Quantity Surveyors: Variations
This doesn’t necessarily mean a variation won’t be raised for a cost overrun on a PC Sum or Provisional Sum. If the developer buys a floor tile matching the PC Sum value, a variation is unlikely. However, if a larger tile is selected, the tiling subcontractor may need more time to install it. In that case, the builder may raise a variation. Therefore, the builder must clearly specify the product and size assumed. This helps prevent disputes or cost overruns later.
What is the difference between a Provisional Sum and a PC Sum?
To summarise, the main difference is that a Provisional Sum includes both labour and materials. A Prime Cost Sum includes only materials, with labour priced separately as a fixed cost. It is essential to confirm in writing with the contractor. Make sure they have allowed enough for installation elsewhere in the construction budget.
What to look for when reviewing Provisional and Prime Cost Sums?
In the event a variation is raised, for concise bookkeeping, we prefer contractors to claim 100% of the PC Sum and then credit the amount in full as a variation, which will then reconcile with the amount claimed. The revised value can then be claimed within the variation register, including any margin on the difference. In our opinion, all Provisional and Prime Cost Sums should be treated as variations.
When comparing tenders, we recommend ensuring all Provisional and PC Sums are clearly described and estimated. On occasion, some contractors reduce these sums to appear more competitive when pricing. This can cost the developer dearly later. Overall, we recommend limiting these allowances to less than 10% of the contract value, where possible. These sums are not fixed and may change based on the final proposed works.
Elemental Quantity Surveyors are located in Christchurch, New Zealand. Feel free to contact us at info@elementalqs.co.nz for a complimentary fee proposal. We specialise in Feasibility Reports, Construction Cost Estimates, Cost Planning, Builders Labour Take-offs, and Contract Administration. We also provide Bank Reporting, Progress Certificates, Variation Assessments, Reinstatement Cost Assessments, and Upfront Embodied Carbon. Read more informative articles here.
