Documente Academic
Documente Profesional
Documente Cultură
Background:
Prime Cost refers to a set budget allocated in the contract for an item or
set of items that need to be bought for the project. Typical examples of
this are taps, tiles and doors if a particular brand, model or style has
not been selected, then the builder will allocate an estimated cost for
such items, rather than specifying an exact cost. However, if a client
selects a more expensive product than the PC item, then an agreed
variation to the contract is to be made.
Prime Cost:
Advantages:
Risks:
Provisional Sums:
Cost Risk:
Time Risk:
Advantage:
Risks:
The use of prime cost items and provisional sums typically means there is a
degree of uncertainty in cost. This causes major problems for projects with a
fixed budget.
- Contractor:
- Architect:
- Owner:
o
Case Study
Issue:
Large-scale mining project in Darwin goes billions of dollars over-budget, despite
having $175 million set aside as a provisional sum. However, the necessary site
works during excavation
The exploitation to insulate from any risk of their estimates being wrong.
Prime costs are an allowance for items not yet selected or confirmed.
These items can be tiles, carpets, taps etc.
Mener is one of the very few property developers that have no prime
costs and no provisional sums in their standard building contract. This
provides you with peace of mind and no nasty price increases at any
time during your building journey.
P.S Remember if it isn't written it's not real! Get everything in writing.