In a construction contract, a prime cost sum usually represents an allowance for:
Correct answer: D. A specified supply item whose final selection or price is unsettled
- A. Delay damages payable for late completion
- B. Unforeseen excavation work with no defined scope
- C. The contractor's fixed annual office overhead
- D. A specified supply item whose final selection or price is unsettled
Explanation
A prime cost sum is an allowance for a particular item, commonly supplied by a nominated or selected supplier, when its exact cost is not yet known. It differs from a provisional sum, which generally covers work or services whose scope is not sufficiently defined.
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About Construction Management and Estimation
Construction management covers planning, scheduling, resource control, contracts, procurement, site organisation, safety, quality assurance and project documentation. Estimation includes quantity take-off, rate analysis, bill preparation, valuation and cost control, with attention to the difference between direct and indirect costs and between an estimate, a tender and a final account.
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