What is the difference between a provisional sum and a prime cost sum?
A provisional sum is an allowance for work that is not defined well enough to price at tender; it is replaced by the value of the work actually instructed and done. A prime cost (PC) sum is an allowance for work or materials to be supplied by a specialist the owner will nominate or select; it is adjusted to the actual price, with the contractor's agreed mark-up and attendance. Neither is a fixed price.
From the RRD Field Guide, checked against the sources cited in Variation Orders and Provisional Sums: How to Stop Surprise VOs on Singapore Building Works. General information, not advice for your project.
The fuller picture
Surprise variation orders usually come from scope that was never fully defined, items excluded from the quote, provisional sums used as placeholders, and concealed site conditions. Owners reduce them by defining scope in drawings and an itemised schedule, pricing exclusions when comparing quotes, requiring written instructions and quotations before varied work starts, and agreeing valuation rules in the contract.
More questions on this topic
- What is a variation order?
- Is a lump-sum quotation fixed no matter what?
- Can a contractor claim for variations done on verbal instructions?
- How are variations valued?
- What are dayworks?
- How should I compare quotations with different exclusions?
- Who bears the cost of concealed conditions found during A&A works?