Prime Cost Sums in Construction Contracts
Introduction to PC sums: supply allowances, nominated items, and how they interact with BOQ pricing.
How PC sums are used
Prime cost sums allow the employer to set expected supply budgets for specified items while the contractor adds installation, handling, and attendance in surrounding BOQ lines or preliminaries.
Final accounts replace PCs with actual invoices where the contract permits, subject to proof and agreed margins.
PC items are common for fixtures, fittings, equipment, or specialist finishes where the employer wants to cap supply cost but let the contractor manage procurement logistics.
What bidders price
Tenderers typically add their percentage for overheads and profit on the PC value for supply-related services, plus any labour/plant not covered elsewhere.
Nominated suppliers may have fixed discounts or rebates—contract terms say whether those benefit the employer or the contractor.
Records and final account
Keep invoices, delivery notes, and substitution approvals aligned with spec clauses; auditors will trace PC spend to source documents.
If actual cost exceeds PC, the contract defines whether the employer pays the difference, shares risk, or caps exposure—do not assume.