Prime Cost Items and Provisional Sums

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If the contract includes prime cost items or provisional sums, the contract must have a separate schedule with details for each item or sum. In the schedule, each item or sum must be described in detail and a breakdown of cost estimates given. The breakdown of cost estimates must, where appropriate, show the quantities of materials involved and the unit cost to the contractor. If you propose to charge a margin for an item or sum, this must also be stated in the schedule (example, the cost of the item plus 10%).

The total amount for a prime cost item or provisional sum must be stated in the schedule and must be the reasonable cost of supplying and delivering the item or providing the service. The amount must take into account the information reasonably available at the time the contract is entered into, and the nature and location of the building site. If the amount of the allowance is not reasonable, the Tribunal may, on application from the homeowner, limit the amount you can recover from the items covered in the allowances. When you claim payment for a prime cost item or provisional sum, you must give the homeowner copies of any invoices, receipts or other documents showing the cost of the item or sum.