What it means
A renovation includes floor tiles, but the owner has not picked the model, so the estimate may include a PC sum for tile supply while labour to install them and other charges are treated according to the contract. RICS NRM 2 defines a PC sum as money in a unit rate for materials or goods from suppliers where precise quality is not determined, described as a supply-only rate, and it distinguishes provisional sums for work that cannot yet be fully described or quantified.
RICS cost-reporting guidance discusses managing construction cost forecasts and changes, but the exact adjustment mechanism must be read in the project contract rather than assumed from a glossary term. Identify what the allowance covers, since tile material may be included while delivery, waste, fixing, tax, contractor margin and installation may be separate, and a vague schedule invites dispute.
State the unit, because a PC sum can be per square metre, per fixture or another unit, and if quantity changes the total changes even if unit supply price stays the same. Record the selection process: who chooses the item, by when and from which supplier, since a late choice may delay procurement or work.
Check performance specifications, because a cheap substitute may fail durability, fire, warranty or design requirements and price is not the only selection criterion. Separate PC sum and provisional sum: the former generally allows for supply of goods not finally selected, the latter reserves money for work not fully defined, and different contract mechanisms may apply.
Use an illustrative adjustment carefully: if the contract allowed $50 per unit for supply and the selected item costs $65 per unit for ten units, the material-price difference is $150 before any contractual margin, tax or other changes. That arithmetic is not a universal final invoice, so check whether the allowance was embedded in a unit rate, how quantities are measured and how the contract treats variations.
Seek quotations, because supplier availability, lead time and freight can affect the actual cost and a showroom sticker price may not be the landed supply price under the contract. Approve before ordering, since the contractor should not assume the owner will pay for a more expensive selection without the required variation or instruction.
Track budget exposure, because a project with many PC sums can look cheaper at tender but rise as selections become concrete, so show the total allowances and expected range. Review substitutions, since a discontinued item may require an alternative, and document the selection and the effect on cost, programme and warranty.
Measure quantities accurately: ten fixtures at a $20 difference yield $200, while a different quantity changes the adjustment, and the bill of quantities is not necessarily final measurement. Check returns and credits, as goods cancelled after ordering may attract restocking charges or nonrefundable deposits under contract terms, and coordinate design, because the selected fitting may need different connections, structural support or installation time, which are separate potential changes from supply cost.
Keep the paper trail linking the original allowance, approved item, supplier invoice and agreed price change so final accounts can be reconciled. Avoid treating an allowance as cash held aside, since it is a pricing assumption within an estimate or contract, not necessarily money in a separate account, and for owners a PC sum leaves an honest holding figure for a product choice whose inclusions and final price effect must be defined and approved.
In practice
Real-world examples.
Example
A bathroom contract carries a PC sum of $50 per square metre for tiles not yet selected. The owner chooses later from the supplier's range. The final price follows the contract mechanism once the tile and quantity are fixed.
Example
A selected fitting exceeds its supply allowance, with adjustment under the contract. The contractor shows the supplier quotation, the quantity and the difference before ordering. The owner approves the variation in writing.
Example
A contractor distinguishes material selection from an undefined work package. The tiles are priced as a PC sum, while a wall of uncertain condition is covered by a provisional sum. Each is adjusted under its own contract mechanism.
Formula
Calculation
Illustrative material difference = (selected supply cost - allowed supply cost) x units
Worked example. A fictional contract allows $50 per unit for supply, and the selected item costs $65 per unit for ten units.
- The material difference is ($65 - $50) x 10 = $150, before contract-specific margin, tax and other changes.
- If the contract adds a 10% margin on adjustments, the figure becomes $150 x 1.10 = $165.
- If final measurement shows twelve units instead of ten, the difference is ($65 - $50) x 12 = $180.Case study
Seen in the real world.
This entirely fictional example follows Ash Renovations. Its client selected fixtures priced above the original PC allowances. The contractor documented unit prices, quantities and a proposed contract adjustment before ordering. The team treated an unrelated structural change separately as work scope.
The case does not define the final amount under any real contract. In the invented figures, three allowances totalled $9,000 and the selected fixtures came to $10,200, a difference of $1,200 before any margin or tax under the contract. Ash recorded each item, supplier quotation and approval in one schedule so the final account could be reconciled line by line.
Watch out
Common mistakes.
- Confusing a supply-only PC sum with a provisional sum for undefined work.
- Assuming installation, freight, margin and tax are included without checking.
- Ordering an over-allowance selection before the required approval.
Questions
People also ask.
What is a prime cost sum?
An allowance for the supply of materials or goods not finally selected at pricing.
Is a prime cost sum the same as a provisional sum?
No. A provisional sum usually relates to work not fully described or quantified.
How is the allowance adjusted?
Under the contract mechanism, using actual selection, quantity and agreed inclusions.
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