Page 170 - BASIC GUIDELINE FOR QS

Professional Practice: Guideline for Quantity Surveyor Chapter 5

5.8.14 Prime Cost Sum

A prime cost sum 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 contractor after the main
contractor has been appointed).

The allowance is exclusive of any profit mark up or attendance (such as material
handling, scaffolding and rubbish clearance, etc.) by the main contractor.
Payments are made based on the quotations/invoices of the supplied items by

the contractor plus addition of reasonable/agreed percentages for overhead
costs and profits. If the contractor's actual cost is higher than the bill of

quantities allowance, then the contract sum will be increased to balance it up and if
the cost to the contractor is lower, then the contract sum will be reduced by the balance.
The contractor should make reasonable provisions within their price for prime

cost sums, however, these can prove inadequate, and so prime cost sums can be a
source of increased costs and disputes.

Figure 5.17: Sample of Prime Cost Sum

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