Understanding PC & PS Items in a Building Contract
When you engage in a fixed-price construction contract for your renovation or new home build, you'll encounter a variable component known as Provisional Sums (PS items) and Prime Cost (PC) items. These elements accommodate costs that can't be precisely determined at the project's outset.
What are PS Items?
Provisional Sum or 'PS' Items encompass labor and material costs that are uncertain before the project starts, necessitating an estimated allocation in your quote. The final cost is subject to adjustments based on the project's scope.
Examples of PS Items include:
Ground works: Excavation costs, including labor, machinery hire, disposal fees at waste facilities, and transportation costs, are estimated due to uncertainties such as encountering rock or unexpected asbestos.
Custom joinery: Costs for kitchen, laundry, and other custom units vary based on layout and finishes. Detailed design specifications finalized closer to construction determine the final cost.
Specialty installations: Labor costs for unique electrical fittings, designer door hardware, or intricate tile patterns are determined after fixture selection and specification.
What are PC Items?
Prime Cost or 'PC' Items refer to items purchased from suppliers, typically ready for installation upon delivery. The quoted cost covers the item itself, excluding delivery and installation fees.
Examples of PC Items:
Bathroom and kitchen fixtures: Costs for whitegoods, faucets, basins, and electrical fittings are determined by client selections.
Surface materials: Choices such as floorboards, tiles, and carpets are priced based on material selections made by the client.
Some builders offer flexibility by excluding PC items, allowing clients to manage their purchases independently. This approach gives clients control over suppliers and budget management but also entails responsibilities such as checking deliveries for defects and ensuring items meet Australian Standards and warranty requirements.
Budgeting for PS and PC items includes Builder's Margin to cover labor management, subcontractor coordination, quality control, and warranty management.
Understanding these aspects ensures clarity and helps manage expectations regarding cost variations in your building contract.
Queenspark // image: Simon Wood
