Website Upgrade Incoming - we're working on a new look (and speed!) standby while we finalise the project

Tips on using this forum..

(1) Explain your problem, don't simply post "This isn't working". What were you doing when you faced the problem? What have you tried to resolve - did you look for a solution using "Search" ? Has it happened just once or several times?

(2) It's also good to get feedback when a solution is found, return to the original post to explain how it was resolved so that more people can also use the results.

Provisional sum

4 replies [Last post]
Tue, 2012-03-13 04:02
Sankar Vijayan
User offline. Last seen 4 years 4 weeks ago. Offline
Joined: 21 Sep 2010
Posts: 58
Groups: None

Dear All,

How to minimise the risk of Provisional sum in contract after the award of LOI.

MArgin for PS  is fixed at the time od award of LOI.We know that later on this items wont come & we didnt get that margin

at the end of project. Is there any provision to minimise this risk?

Regards

SVN 

Top

Replies

Tue, 2012-03-13 10:07
#1
Mike Testro
User offline. Last seen 32 weeks 6 days ago. Offline
Joined: 14 Dec 2005
Posts: 4418
Groups: Building Information Modelling, Content Moderators, GPCCAR Editors

Hi Sankar

Once a Provisional Sum has been instructed the amount of the PS is deducted and the cost of following the instruction is paid plus a reasonable mark up for profit and overheads.

You are not obliged to supply material at base cost - you can even charge for unloading and storage.

If they refuse to pay you then make a formal claim and refuse to order any more items until settled.

Best regards

Mike Testro

Top
Tue, 2012-03-13 06:11
#2
Sankar Vijayan
User offline. Last seen 4 years 4 weeks ago. Offline
Joined: 21 Sep 2010
Posts: 58
Groups: None

Sir,

Deletion of Prime cost is a compensation event or not?

 

Regards

SVN

Top
Tue, 2012-03-13 04:46
#3
Sankar Vijayan
User offline. Last seen 4 years 4 weeks ago. Offline
Joined: 21 Sep 2010
Posts: 58
Groups: None

Dear Sir,

This PS items are mainly finishing free issue items .Later they will tell us to procure the material with a basic rate

so that we wont get any margin. Contract is still not finilised .is there any strong arguments we can put forward ?

This items are a part of program.

 

Thanks & Regard

SVN

Top
Tue, 2012-03-13 04:16
#4
Mike Testro
User offline. Last seen 32 weeks 6 days ago. Offline
Joined: 14 Dec 2005
Posts: 4418
Groups: Building Information Modelling, Content Moderators, GPCCAR Editors

Hi Sankar

There is a difference between Prime Cost PC and Provisional Sums PS.

PC sums cover work that will be executed under the contract and therefore will attract a margin in the tender.

PS are an optional item for the employer to take up if he wishes. There is usually no margin in the tender price and if there is then there is no recovery if the PS is not awarded.

A scope of PS has to be very well defined in the contract if it is to be in the contract programme.

In the UK there are two classes of PS - Defined and Undefined and only Defined get to be in the programme.

Best regards

Mike T.

Top