Prime cost in construction contracts
In general terms, the ‘prime cost’ is the sum of the direct cost of materials and labour associated with a production process. It is the direct cost of the inputs to a process that are necessary to create the output. If the prime cost can be lowered, the process may become more profitable.
In construction, the term ‘prime cost sum’ (PC sum) is an allowance for the supply of labour, plant and materials to be provided by a contractor or supplier that will be nominated by the client. The allowance is exclusive of any profit mark up or attendance (such as material handling, scaffolding and rubbish clearance etc) by the main contractor. See prime cost sum for more information.
Prime cost contracts (sometimes referred to as cost plus contracts or cost reimbursement contracts) are contracts in which the contractor is paid the prime cost (the actual cost of labour, plant and materials) and a fee for profit and overheads.
Prime cost contracts are used where an early or immediate start on site is required even though design information is not complete, for example for urgent alteration or repair work. See Prime cost contract for more information.
Adjustments may be permitted to prime costs during the period of a contract to allow for inflation (fluctuations).
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Shortage of high-quality data threatening the AI boom
And other fundamental issues highlighted by the Open Data Institute.
Data centres top the list of growth opportunities
In robust, yet heterogenous world BACS market.
Increased funding for BSR announced
Within plans for next generation of new towns.
New Towns Taskforce interim policy statement
With initial reactions to the 6 month policy update.
Heritage, industry and slavery
Interpretation must tell the story accurately.
PM announces Building safety and fire move to MHCLG
Following recommendations of the Grenfell Inquiry report.
Conserving the ruins of a great Elizabethan country house.
BSRIA European air conditioning market update 2024
Highs, lows and discrepancy rates in the annual demand.
50 years celebrating the ECA Apprenticeship Awards
As SMEs say the 10 years of the Apprenticeship Levy has failed them.
Nominations sought for CIOB awards
Celebrating construction excellence in Ireland and Northern Ireland.
EPC consultation in context: NCM, SAP, SBEM and HEM
One week to respond to the consultation on reforms to the Energy Performance of Buildings framework.
CIAT Celebrates 60 years of Architectural Technology
Find out more #CIAT60 social media takeover.
The BPF urges Chancellor for additional BSR resources
To remove barriers and bottlenecks which delay projects.
Flexibility over requirements to boost apprentice numbers
English, maths and minimumun duration requirements reduced for a 10,000 gain.
A long term view on European heating markets
BSRIA HVAC 2032 Study.
Humidity resilience strategies for home design
Frequency of extreme humidity events is increasing.
National Apprenticeship Week 2025
Skills for life : 10-16 February
Comments
Construction on this page has been spelt incorrectly! - well spotted, this has been fixed