- 1 What are prime costs?
- 2 What is the difference between prime cost and provisional sum?
- 3 What is Prime Cost civil engineering?
- 4 What is a PS item in building?
- 5 What is the formula for prime cost?
- 6 What is included in direct costs?
- 7 What is prime cost sum?
- 8 What are prime cost and provisional sum items?
- 9 What is provisional amount?
- 10 What is contingency sum?
- 11 What are day works?
- 12 What is PS allowance?
- 13 How does a lump sum contract work?
What are prime costs?
A prime cost is the total direct costs of production, including raw materials and labor. Indirect costs, such as utilities, manager salaries, and delivery costs, are not included in prime costs.
What is the difference between prime cost and provisional sum?
Traditionally, a prime cost is limited to the cost of supplying the relevant item, and does not include the cost of any work that relates to it (such as its installation). In contrast, provisional sums include allowances for both the supply item and all related work to be performed by the contractor.
What is Prime Cost civil engineering?
Prime cost generally is an allowance for articles to be provided by the contractor, of which price cannot be fixed at the time of tender. It refers only to the supply of materials and not to the carrying out of works. A specific amount will be earmarked in the BOQ for execution of such items.
What is a PS item in building?
Prime Cost (PC) items and provisional sums ( PS ) are two items in a standard building contract which cause great confusion among homebuyers. An agreed estimated amount is included at contract signing but the specific products are not selected until a later stage.
What is the formula for prime cost?
Prime cost = direct materials cost + direct labor cost The formula of prime cost is just a sum of all the cost of production incurred directly in regards to the manufacture of goods.
What is included in direct costs?
Direct costs are expenses that a company can easily connect to a specific ” cost object,” which may be a product, department or project. This can include software, equipment and raw materials. It can also include labor, assuming the labor is specific to the product, department or project.
What is prime cost sum?
A prime cost sum (PC or PC sum ) is an allowance, usually calculated by the cost consultant, for the supply of work or materials to be provided by a contractor or supplier that will be nominated by the client (that is, a supplier that is selected by the client to carry out an element of the works and imposed on the main
What are prime cost and provisional sum items?
Most simply, prime cost applies to items themselves, provisional sums refers to complete works. If you do have prime cost items or provisional sums in your contract, the Domestic Building Contracts Act 1995 states that they must be set out in a separate document that includes: A comprehensive description of the item.
What is provisional amount?
A provisional sum is an allowance (or best guess), usually estimated by a cost consultant, that is inserted into tender documents for a specific element of the works that is not yet defined in enough detail for tenderers to accurately price.
What is contingency sum?
A contingency sum can best be described as a sum of money allowed in the project budget, for expenditure on aspects of the project that were unforeseen or unforeseeable at the time of preparing documents. A contingency sum should be used during the design and construction phases of the project.
What are day works?
Daywork is a means by which a contractor is paid for instructed work based on the cost of labour, materials and plant plus a markup for overheads and profit. It is generally used when work cannot be valued in the normal way.
What is PS allowance?
Provisional Sum allowances are used for an unknown cost and covers both materials and labour. PS allowances are often used for excavation where the exact costs are not known, and for kitchens whereby the allowance includes the cabinetry, benchtops and labour for installation.
How does a lump sum contract work?
A lump sum contract is a construction agreement in which the contractor agrees to complete the project for a predetermined, set price. Under a lump sum agreement, also known as a stipulated- sum, the contractor submits a total project price instead of bidding on each individual item.