Understanding Prime Cost and Provisional Sum

Before embarking on your next home build, it’s important to be aware of the terms that will define your project. When it comes to Prime Cost and Provisional Sum, too many people aren’t aware of the impact these figures can have on their project and budget.

At Nicon Built, we pride ourselves on having all financial aspects of your project clearly presented. We want contractual commitments to be transparent from design stage to completion of a bespoke build, renovation or extension.

With decades of industry experience, we know prime costs and provisional sums leave unsuspecting clients vulnerable to budget blowouts – which is why we want to clarify the meaning of this industry terminology.

What is Prime Cost?

A prime cost is an estimate on elements of your build for which the final cost will not be defined until a later date, when the items are selected. For example, a prime cost is estimated for many interior fittings and selections.

While your builder should strive to keep these estimate as close as possible to the final cost, some factors are beyond our control. Perhaps a market shortage causes increased supply costs, or you may change your mind and decide on a more expensive fixture.

Large adjustments to prime costs are often at the heart of building contract disputes. As custom builders, we provide prime costs based on quality items, and pride ourselves on reasonable and informed estimates.

If your final selection is cheaper than the prime cost, that amount is deducted from the quoted price. If your final selection is costlier than the prime cost estimate, you are therefore required to pay the difference.

Please be aware prime cost does not apply to labour, but to the materials themselves. It is important to understand what exactly prime cost is referencing – and if you ever have any doubts, our expert team will be more than happy to explain the details.

What is Provisional Sum?

Provisional sums differ from prime costs. Understanding this distinction allows for a better grasp of the potential final price by identifying areas where the quote may fluctuate in cost, so you can plan accordingly.

Unlike prime cost, provisional sum refers to materials and labour involved. This type of estimate can be used when final decisions around certain aspects of the build have yet to be decided during early design stages. 

Provisional sums are also utilised when not enough information is available to accurately estimate the cost of materials and labour. This can arise when there are imminent shortages that may impact estimates.

Other common areas of a quote where you may find provisional sums used include site works, which may be difficult to give a fixed estimate for, and landscaping, where aesthetic decisions are not yet finalised.

Be aware that if the number of provisional sums in a quote are excessive, you could end up with an increase in the final budget that calls for further financing. We advise always maintaining a degree of flexibility towards potential changes around these allocations

You have the right to an informed quote

It is legally required for your prime costs and provisional sums to be explained in a comprehensive pre-construction document. While changes and unexpected scenarios can occur with any build, we recommend questioning excessive PC and PS figures.

At Nicon Built, we have a reputation built on transparency and a clear, stress-free building process. We are happy to further break down prime costs or provisional sums relating to your project. Contact us today to learn more about our building service.

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