PC and PS Sums in Construction Contracts

What is a Prime Cost (PC) sum?

A Prime Cost (PC) sum is a dollar allowance included in a construction contract for the supply of a specific material or fitting that the client has not yet selected at the time of signing. Common examples include tapware, tiles, kitchen appliances, and door hardware. The PC sum covers the cost of the item itself, while the builder's labour to install it is usually already priced into the main contract.

What is a Provisional Sum (PS)?

A Provisional Sum (PS) is a financial allowance included in a contract for a specific scope of work (both labour and materials) that cannot be accurately priced at the time of signing because the design or details are incomplete. Common examples include earthworks (where hitting rock is a risk), complex waterproofing details, or structural upgrades pending final engineering.

Why do PC and PS sums cause budget blowouts?

PC and PS sums are placeholders, not fixed prices. When the actual item is selected (PC) or the actual work is completed (PS), the final cost is calculated. If the final cost is higher than the placeholder allowance, the client must pay the difference as a variation.

Subcontractors and builders often lose money when they treat a PS sum on a schedule as a firm quote. If a subcontractor bids based on a soft provisional number, and the actual scope turns out to be more complex, the gap comes directly out of their profit margin.