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Understanding Prime Cost (PC) Sums & Provisional Sums (PS)
Purpose: Help team members understand the difference between Prime Cost (PC) Sums and Provisional Sums (PS) when reviewing quotes, purchase orders, variations, and client approvals.
How this applies in insurance building
In insurance building, scopes and costs often change as damage is uncovered (strip-out, exploratory works, moisture mapping, demolition) and as like-for-like selections are confirmed.
PC and PS allowances help a quote/proposal proceed before every detail is known, but they still sit within the approved allowance until formal approval is obtained for any increase.
Common insurance-building triggers
- Hidden damage discovered after strip-out (water ingress, mould, framing/subfloor, wet insulation)
- Safety / compliance items that become clear once access is gained
- Like-for-like matching where the exact product is not confirmed yet (tile match, discontinued fittings)
PC/PS vs variations (important)
- PC / PS = an allowance included inside the quoted/approved amount.
- Variation (or scope change approval) = the formal step used when the final cost/scope is likely to be above the allowance.
Approval and documentation (good practice)
If actual costs are likely to exceed the allowance, make sure you have:
- Photos and notes showing what was found / why it changed
- A clear description of the changed scope or item selection
- Updated cost impact (increase/decrease)
- Confirmation of approval pathway before proceeding where possible
Prime Cost (PC) Sum
A Prime Cost Sum is an allowance for a product or item that has not yet been selected at the time of quoting. The labour component is generally already known and allowed for.
Examples: Tiles, tapware, appliances, vanities, door hardware
Important notes:
- A PC Sum is already included within the contract amount.
- If the final selected item costs more or less than the allowance, the contract amount will be adjusted accordingly.
- Any increase above the allowance should be communicated and approved where required.
Simple explanation: "PC Sum = Product not chosen yet."
Provisional Sum (PS)
A Provisional Sum is an estimated allowance for work where the full scope, labour, or materials are not yet known at the time of quoting.
Examples: Structural repairs, hidden water damage, excavation works, demolition works, unknown rectification works
Important notes:
- A PS allowance is already included within the contract amount.
- It is not an additional amount on top of the contract.
- Final costs may increase or decrease once the actual scope of works is confirmed.
- Any variation above the allowance should be discussed and approved before proceeding where possible.
Simple explanation: "PS = Scope of work not fully known yet."
Key difference
| Prime Cost (PC) Sum | Provisional Sum (PS) |
|---|---|
| Unknown product/item selection | Unknown scope of works |
| Usually materials/items only | Labour and materials may both vary |
| Labour generally fixed | Labour and scope may change |
| Example: Client hasn't chosen tiles | Example: Extent of structural repairs unknown |
Important reminder
Neither a PC Sum nor a Provisional Sum should automatically be treated as additional approved spending outside the original contract or purchase order allowance.
Communication and approval must occur where actual costs are expected to exceed the original allowance.