Contracts & commercial

Prime Cost (PC) Sum

An allowance for materials or goods whose supplier or specification is not yet fixed — the contractor prices the installation, and the supply cost is adjusted against the allowance when the actual item is selected.

The distinction from a provisional sum is worth keeping straight: a PC sum covers the SUPPLY of an identified item whose cost is not yet known, while a provisional sum covers WORK whose scope is not yet defined. The contractor’s profit and attendance on a PC item are priced separately in the bill.

PC sums are where specification creep is quietly funded on fit-out projects. The allowance was set at a sensible rate; the interior designer then selects something considerably more expensive; and the adjustment is a variation everybody saw coming and nobody budgeted for.

See also