Prime cost sums and provisional sums.
Prime cost (PC) sums and provisional sums are essential estimating tools for work that cannot be fully specified at tender stage. Used correctly, they protect both contractor and client from pricing blind. Used carelessly, they become a source of disputes and budget overruns.
Authored by Alexandr Vreme & Maksym Vasylkov
Published — Next review
What is a prime cost (PC) sum?
A prime cost sum is a fixed allowance for a specific item that will be procured later. The item itself is known — kitchen units, sanitaryware, floor finishes, ironmongery — but the final cost is not yet established. The contractor includes the PC sum in the tender and adds overheads and profit as agreed.
Key characteristics of PC sums:
- The item is named and can be clearly specified ("Smiths MK2 kitchen, size C configuration")
- Only the cost is uncertain, not the product or scope
- The contractor typically adds a mark-up for overhead, profit, and attending (fixing and connecting)
- The final account adjusts the PC sum to the actual cost paid
What is a provisional sum?
A provisional sum is an allowance for work whose full scope cannot be defined at tender stage. Unlike a PC sum, the item itself is uncertain. Common examples include:
- Ground conditions requiring unforeseen foundation work
- Discovery of unknown drainage or services during excavation
- Asbestos surveys and removal (where presence is suspected but unconfirmed)
- Structural alterations where opening-up may reveal different construction
Provisional sums are priced by the contractor once the scope is confirmed, either on a measured basis or as a quotation. Mark-up on provisional sums is usually applied in the preliminaries or through the contract terms rather than as a simple percentage addition.
Key differences at a glance
| Aspect | PC sum | Provisional sum |
|---|---|---|
| Item known? | Yes — specific product or specification | No — scope and method are undefined |
| Who carries risk of insufficiency? | Client (if item costs more, the PC sum adjusts) | Client (the sum expands to cover the measured work) |
| Contractor mark-up | Usually added as agreed percentage (e.g. 15%) | Recovered through preliminaries or specified separately |
| Adjustment method | Actual cost vs PC sum (difference credited or debited) | Measured against rates or re-quoted when scope is known |
Miniature example
A kitchen-and-bathroom refurbishment contract includes both types of allowance:
| Allowance | Type | Sum | Notes |
|---|---|---|---|
| Kitchen supply (chosen from showroom range) | PC sum | £8,000 | + 15% OH&P = £9,200 in tender |
| Kitchen fit (labour & connections) | PC sum | £2,400 | Attending works included at agreed rates |
| Bathroom sanitaryware | PC sum | £3,200 | + 15% OH&P = £3,680 in tender |
| Groundworks (unknown drainage condition) | Provisional sum | £12,000 | Measured when exposed; mark-up in prelims |
| Asbestos survey & removal (if found) | Provisional sum | £3,500 | Priced on specialist quotation after survey |
Final account adjustment
PC sums and provisional sums are reconciled during the final account process. For PC sums, the actual invoiced cost is compared against the allowance, and the difference is added or deducted (with mark-up applied to the actual figure). For provisional sums, the work is measured in accordance with the contract bill of quantities or re-priced using agreed daywork rates or quotations.
The key risk for contractors is that the final account process relies on clear documentation. Without proper records of the agreed scope and cost at the time the PC or provisional sum is expended, the adjustment can become contentious.
Questions to ask
- Who carries the risk if the PC sum is insufficient for the specified item?
- Is the contractor's overhead and profit mark-up on PC sums clearly stated in the tender or buried in the preliminaries?
- Are provisional sums being used for items that could have been designed and priced with certainty?
- Does the contract define the mechanism for adjusting provisional sums when the scope is confirmed?
- Are both PC sums and provisional sums identified separately in the contract sum analysis?
Related guides and tools
Learn how contingency and risk allowances work alongside PC and provisional sums. Understand how adjustments are handled in pricing variations and scope changes. Use the Construction Estimator to track PC and provisional allowances through the project budget.