Specifications & Provisional Cost (PC) Sums


Getting accurate specifications from your builder is important.

In addition to a build contract, the builder will provide you with a set of plans and specifications. These documents should set out exactly what you are going to receive. Read these documents very carefully.

Ensure all items for the build have been included in the Specifications document. When comparing price between builders you want to be making an “apples for apples” comparison. Builders have been known to exclude items to get the price down, only to present you with a variation for the excluded items later in the build. Some items that are often excluded may include council fees, consents and permits – all of which can be quite expensive.

What are provisional cost (PC) Sums?

Included in the Specification documents you will often see PC sums.  PC sums are where you and / or your builder agree to NOT fix a part of your build contract. Avoid or minimize PC Sums. For example, the excavation cost will probably be a PC sum. If during the excavation, the soil is fund to be sub-standard, additional work may be required and this cost is passed on to you.

Other typical PC sums can include kitchen, floor coverings, driveways and landscaping. Where you agree to a PC sum (i.e not a fixed price item), you should at the very least be sure the price agreed as an estimate is accurate, within reasonable expectations.  Do your homework.

With low deposit lending, the build must be in a recognized and reputable sub-division where the builder must provide a fully fixed price build contract with no PC sums.

Beware of the PC sums Trap!

This is one of those areas where a builder may reduce the perceived cost of the home, but you could end up paying more than you budgeted. We often comment that you are assured of having an honest builder…sometimes at the start of your project, and sometimes at the end. You are better to contract a builder who gives you a fair and accurate price at the start – even if it appears higher than another builder – than to risk an increase due to blow-outs on your PC sums or omissions to your contract, plans or specifications.

If you focus solely on price to determine your builder, then you run the risk of your builder having to make up the shortfalls through variations and disproportionate Provisional Cost sums. (PC sums).