Fees for profit and attendance are usually paid where the main contractor supervises the work of a sub-contractor. This accounts for the profit which the main contractor would have made had he appointed the sub-contractor himself, as well as the cost of supervision.

Why provisional sum is important?

It is used in pricing construction contracts to refer either to work which is truly provisional, in the sense that it may or may not be carried out at all, or to work whose content is undefined, so that the parties decide not to try to price it accurately when they enter into their contract.

What are prime cost sums?

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 is the difference between provisional sum and prime cost?

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 difference between contractor and subcontractor?

When clients hire you to work on a specific project or on a freelance basis, you are usually considered a contractor. You provide the labor, services, and sometimes whatever equipment is needed to get the project done. Subcontractors are companies or individual people that you hire to help you complete a project.

How is provisional sum defined?

A provisional sum is defined as ‘an estimate of the cost of carrying out particular work (including the cost of supplying any materials needed for the work) under a domestic building contract for which a builder, after making all reasonable enquiries, cannot give a definite amount at the time the contract is entered …

What is the difference between a prime cost and provisional sum?

A PC item is an amount of money included in a contract sum to purchase a specified item such as tiles, taps, doors or bathroom fittings. A provisional sum is an amount of money included in the contract sum to cover work or materials, or both, the extent of which cannot be specifically detailed when entering a contract.

How does a provisional sum work?

A provisional sum is an amount of money included in the contract sum to cover work or materials, or both, the extent of which cannot be specifically detailed when entering a contract. Typically, builders will include a PS for sitework costs. This can be added to the contract sum.

How much should a contractor profit?

In the construction services industry, gross margin has averaged 17.18-18.69 percent over 2018. However, suggested margins can be as high as 42% for remodeling, 34% for specialty work, and 25% for new home construction.

What is the most profitable construction business?

Without a doubt, whether the metric is net margin or balance sheet, the most profitable construction companies are full service, “development, design, engineering, project management, construction and procurement in the heavy industrial and civil sectors.

What is provisional sum example?

A common example of a provisional sum item is earthworks on a site where there is uncertainty about soil conditions. The builder will make a reasonable allowance for the site works based on the information available at the time.

What is provisional sum in bill of quantities?

A provisional sum is an allowance, usually estimated by the 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 price.