Prime Cost Sum

Journal of Applied Sciences Research, 6(8): 1212-1214, 2010
2010, INSInet Publication
Adjustment of Prime cost and Provisional Sums on Building Project in Nigeria: Causes,
Effects and Solutions.
Ayodele Elijah Olusegun
Principal Lecturer Dept of Quantity Surveying Fufus Giwa Polytechnic Owo, Ondo State, Nigeria.
Abstract: This paper determined the causes and effects of adjustments of prime cost and provisional sums
on building projects in Nigeria. The study was carried out by means of questionnaire and interview
administered to Quantity Surveyors and Architects who have practiced in the south west of Nigeria for
at least ten years. The fifty-six completed questionnaire retrieved resulted into data, that formed the basis
of the study and were analyses by relative importance index. The result showed that adjustments to prime
cost and provisional sums were caused by : items not detailed before tender documents were prepared,
hurry in documentation, non-preparation of designs and bill of quantities . Also, the result showed that:
cost overruns, and time overruns are the negative effects of the adjustments of prime cost and provisional
sums. Positive effect is that the sub-contractor is fully paid for work done. For the negative effects to be
drastically reduced, there must be proper pre-tender planning, the clients and consultants not being in a
hurry in contract documentation. Well thought-out designs of all the items prepared, from which the bill
of quantities is prepared for all the items, before going to tender. Adjustments of Prime Cost and
Provisional Sum on Building Projects in Nigeria.
Key words:
INTRODUCTION
The Nigeria Institute of Quantity Surveyors[7]
Nigeria Institute of Quantity Surveyors[8] and JCT[4]
Ramans[10]; Seeley[11]; defined:
i. Prime cost sum as a sum provided for work or
services to be executed by a nominated subcontractor, a statutory authority or a public
undertaking or for materials or goods to be
obtained from a nominated supplier. Sum shall be
deemed to be exclusive of any profit required by
the general contractor and provision shall be made
for the addition thereof.
ii. Provisional sum as a sum provide for work or for
cost which cannot be entirely foreseen, defined or
detained at the time the tendering documents are
issued.
Background to the Study: The finding of Ayodele[2]
showed that the adjustment of prime cost and
provisional sums are some of the causes of cost and
time overruns in the construction industry. According
to Giwa[3], allowances made for prime cost in contract
bills, cause overruns in contract sum because the actual
costs are in most cases, higher. This according to
Ogunsemi[9] is because the Quantity Surveyor usually
allowed for arbitrary figures. In fact the amount
Corresponding Author:
allowed for has often led to high figures in order to be

on the safe side. Ogunsemi[9] opined that the way and
manner by which provisional sums are allowed for in
the contract bill and later expended has a lot of impact
on the final cost of construction project. The more the
provisional sums are inserted into contract bills, the
less the precise and realistic will be the initial contract
sum with respect to the final cost. According to
Ogunsemi[9] an ideal bill of quantities is that which
contain neither prime cost nor provisional sum. In a
study carried out in Nigeria on building projects by
Akewusola[1]: during the prosperity period of 1972-1978
the mean of cost overrun was 46. 76% out of this 7.
79% was contributed by adjustment of prime cost sum
while 3. 23% from adjustment of provisional sums
during the recession period of 1979-1983;mean of cost
overrun was 65. 83%, out of this were 28. 37% and
11. 77% contributed by adjustments of prime cost and
provisional sums respectively, during the depression
period 1984 to date, mean of cost overrun was 23.
39% out of which 1. 97% and 0. 96% were contributed
by prime cost and provisional sums respectively.
This study is intends to determine causes of such
adjustment of prime cost and provisional sums and
their effects, so that appropriate solutions can be
proffered.
Ayodele Elijah Olusegun, Principal Lecturer Dept of Quantity Surveying Fufus Giwa Polytechnic
Owo, Ondo State, Nigeria.
1212
J. App. Sci. Res., 6(8): 1212-1214, 2010
Objectives: The objectives of this study are to:

i. Determine the causes of adjustment of prime cost
and provisional sums,
ii. Document the effects of adjustments of prime cost
and provisional sums.
Methodology:
This study which was carried out between January
and October 2008 made use of questionnaire and
interview administered to select Quantity Surveyors and
Architects who have practiced in the South West of
Nigeria for at least ten years. (Ondo, Ekiti, Osun, Oyo,
Ogun and Lagos states). The data that was finally
collected from the fifty-six respondents formed the
basis of this study.
The following information weres among others
collected from the respondents on the jobs they have
executed so far:
C causes of adjustments of prime cost and
provisional sums.
C Effects of such adjustment of prime cost and
provisional sums.
The respondents were requested to rank a multiple
choice question in a scale of 1-4. The responses were
evaluated using Relative Importance Index (RII) based
on the work of Lim and Alum[5]. In theory the RII =
(4n4 + 3n3 + 2n2 + nO/4N. Where : nl = response for
most unlikely.
n2 =
response for unlikely.
n3 =
response for likely
n4 =
response for very likely
N =
otal number of respondents involved in the
study.
Data Analysis:
Findings: From the table 1: effects of the adjustment
of prime cost and provisional sums are: Sub-contractor
fully paid for actually executed job, cost overrun and
time overrun.
From table 2, the causes of adjustment of prime
cost and provisional sums are: item not detailed before
tender, non-preparation of drawings, non-preparation of
bill of quantities, hurry contract documentation and
inadequacy of arbitrary bill cost.
Discussion: The positive effect of adjustment of prime
cost and provisional sums i.e. sub-contractor fully paid
for executed work, is in consonance with practiced
observation on construction site, and Ogunsemi[9]. One
of the negative effects, i.e. Cost overrun, is in
agreement with Akewusola[1] whose research work on
building industry indicated that adjustment of prime
cost and provisional sums between 1972-1978
contributed 23. 57% to cost overrun, and between
1979-1983 the adjustments contributed 58. 32% to cost
overrun. The other negative effect, i.e. time overrun is
in line with Ayodele[2] whose research work on
building executed by Nigerian tertiary institutions,
discovered that adjustment of prime cost and
provisional sums resulted in time overruns.
Two of the causes of adjustment of prime cost and
provisional sums, i.e. item(s) not detailed at inception
and inclusion of arbitrary cost figures in bill of
quantities are in consonance with Giwa[3] and
Ogunsemi[9] who opined that arbitrary cost figures are
included in bill of quantities for prime cost and
provisional items because the detail of the job is not
Table 1: Causes of PC and Provisional Sums.

Causes of adjustment of PC and Provisional Sums
1
2
3
4
RII
1
Item not detailed before tender
0
4
2
50
0.955
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2
Hurry in documentation
3
2
1
50
0.938
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3
Non-preparation of drawings
1
5
2
48
0.933
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------4
Non-preparation of bill of quantities
2
2
2
48
0.911
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5
Bill cost not adequate
10
10
2
24
0.589
Table 2: Effects of Prime Cost and Provisional Sums.
Effects of adjustment of PC and Provisional Sums
1
2
3
4
RII
1
Sub-contractor fully paid
0
0
0
56
1.00
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2
Cost overruns
0
5
1
50
0.951
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3
Time overruns
5
3
3
45
0.893
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------4
Abandonment of the item
12
3
20
20
0.705
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5
Low quality
14
12
0
20
0.527
1213
J. App. Sci. Res., 6(8): 1212-1214, 2010
known. Since the detail of such job is unknown, detail

drawings and bill of quantities for the items cannot be
prepared.
NIQS[6] observed that many Nigerian clients are in
a hurry about contract documentation; this is agreement
with one of the causes of adjustment of prime cost and
provisional sums from this research work.
Conclusions and Recommendations:
C The causes of adjustment of prime cost and
provisional sums are: item(s) not detailed at
inception, non-preparation of drawings and bill of
quantities and the inclusion of arbitrary cost
figures in bill of quantities.
C The effects of the adjustment of prime cost and
provisional sums are: sub-contractor fully paid for
work executed, cost overrun and time overrun. It
is hereby recommended that to step down or
reduce the negative effects of the adjustments i.e.
cost and time overruns; clients and their
consultants should not be in a hurry about contract
documentation, but make sure (as much as
possible) that'detailed Architectural, Civil,
Mechanical and Electrical drawings are made
available to the Quantity Surveyor for detailed bill
of quantities before tender.
REFERENCES
1.
Akewusola W.A.O., 2007. Effect of economic

trade cycle on final cost of construction projects in
Nigeria. The Quantity Surveyor. Nigerian Institute
of Quantity Surveyor. Lagos, 55(2): 31-40.
2.
Ayodele E.O., 2004. A study of contractual

procedures in the execution of building projects by
Nigeria tertiary institutions. MSc Thesis. University
of Benin. Nigeria.
3. Giwa, S.L., 1988. Differences between initial final
contract sums of construction projects in Nigeria.
causes and solutions. Seminar organized by the
Nigeria institute of Quantity Surveyors. Lagos.
4. Joint Contract Tribunal, 1980. Conditions of
contract. JCT. London.
5. Lim E.G. and J. Alum, 1995. Construction
Productivity: Issues encountered by Contractor in
Singapore. International Journal of Project
Management. 13(1): 51-58.
6. NIQS, 2003. Causes of high construction cost in
Nigeria- causes and solutions. NIQS Lagos.
7. Nigerian Institute of Quantity Surveyors, 1988.
Standard method of measurement of NIQS. Lagos.
8. Nigerian Institute of Quantity surveyors, 1996.
Standard form of contract for use in connection
with Building, Civil, Electrical, Mechanical and
other Engineering works by Local Government
Council in the Federal Republic of Nigeria. NIQS
Lagos.
9. Ogunsemi, D.R., 2007. Predicting the final cost of
Construction Projects in Nigeria. The Quantity
Surveyors, 54(4): 3-6.
10. Ramus, J.W., 1981. Contract Practice for Quantity
Surveyors. Heinemann: London.
11. Seeley, I.H., 1984. Quantity Surveying Practice.
Macmillan: England.
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Journal of Applied Sciences Research, 6(8): 1212-1214, 2010

2010, INSInet Publication

allowed for has often led to high figures in order to be

J. App. Sci. Res., 6(8): 1212-1214, 2010

Objectives: The objectives of this study are to:

Table 1: Causes of PC and Provisional Sums.

J. App. Sci. Res., 6(8): 1212-1214, 2010

known. Since the detail of such job is unknown, detail

Akewusola W.A.O., 2007. Effect of economic

Ayodele E.O., 2004. A study of contractual

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