PRIME COST SUM

&
PROVISIONAL SUM

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 Nominated Sub-Contractor (NSC)
 Definition
Subcontractor appointed by the
superintendent officer (SO) to execute the
certain works which is categorized as
specialist work that is allocated and stated
as Prime Cost Sum in Tender Document/
BQ.

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 Nominated Supplier (NS)
 Definition
Material supplier who appointed by the SO
to supply the certain/special materials
which is allocated and stated in Tender
Document/ BQ.

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 PRIME COST SUM (PC SUM)
 Definition
A sum of amount which allocated in
Tender Document/ BQ for a certain works
that categorized as specialist works to be
implemented by Nominated Sub-
Contractor (NSC) OR for supply a certain
materials to be supplied by Nominated
Supplier (NS) appointed clients.

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PRIME COST SUM

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 PROVISIONAL SUM (PV SUM)
 Definition
A sum of amount allocated in Tender Document/
BQ for a certain works which can’t determine or
confirmed during the Tender Document
completion.

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 Purpose of PC & Prov Sum.
To execute the specialists works. Therefore there are a few
advantages to appoint NSC and NS:

a) Better quality of works

b) Shorter Pre-Contract period
c) Allow the input of design from Specialist
Contractor
d) Appointment of an outstanding Contractor
e) Competitive cost

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 Type of Specialist Work
 Wiring
 Fire-fighting
 Lift
 Escalator
 Air-conditioning
 Landscaping
 Road works
 Plumbing

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 Nominated sub-contractor does the job.
Main contractor (MC) also get the Profit.

 Profit
Why profit paid to the Main Contractor?

i. Main Contractor entitle for profit because of his

responsibility to the sub-contract works in term risks,
quality of works and works completion.

ii. Main Contractor has to monitor and coordinate the

works done by NSC.

Therefore MC entitle for the profit. Priced by MC in %.

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 Attendance? “kos operasi”
 Attendance

- Charge by MC due to his facilities & services to NSC

such as temporary roads, scaffolding, water & electricity
supply, storage, rubbish clearance etc.

- Priced by MC as Lump Sum

- There are 2 types of Attendance charged by the MC.

(Watch the video)

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 DESCRIPTION
Item Description Unit Qty Rate Amount (RM)

A. Fire fighting System

Provide a Prime Cost Sum of Ringgit

Malaysia: Three Hundred Thousand
Only (RM 300,000.00) for Fire-
fighting System to be executed by a
firm to be nominated by the S.O. 300,000.00

B. Add for Profit % 2 6,000.00

C Allow for Attendance LS 2,000.00

TOTAL 308,000.00
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 PROVISIONAL SUM
Item Description Unit Qty Rate Amount (RM)

A. Provide the Provisional Sum of Ringgit

Malaysia One Hundred Thousand
Only (RM 100,000.00) for landscaping
works to be expended by the SO or to
be deducted in whole or in part if not
required.
ITEM 100,000.00

TOTAL 100,000.00
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 PROVISIONAL SUM
 Carry out by Main Contractor or third party (NSC).

 If work carried out by MC, valuation of work are as

valuation of variation (kerja2 perubahan):
a) BQ rates
b) Pro-rates
c) Agreed rates
d) Day work rates

Will discuss further in other session regarding this matter..

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 PROVISIONAL SUM
 Account settlement for work done under
Provisional Sum - Balance should add or omit
from contract sum. (Refer next page..)

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 PROVISIONAL SUM
ITEM DESCRIPTION TOTAL (RM)

CONTRACT ACTUAL
SUM COST
Provisional sum
1. for landscaping 100,000.00 115,000.00
works
TOTAL

NETT ADDITION/ 15,000.00

OMISSION
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 NSC & NS
 Clause 59.1 (Nomination)

SO to obtain tenders for NSC/ NS or for supply of

materials/goods provided PC Sums or Provisional
Sums included in BQ.

Contractor shall, on the written instruction of SO,

enter into sub-contracts with NSC/ NS.

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 Role of QS in the preparation of
Prime Cost Sum & Provisional Sum
i. Preparing cost estimate
- for Provisional Sum
- PC sum : ask opinion from M & E consultant

ii. Advice clients in spending the budget.

iii. Advice clients on type of procurement & expenses.

iv. Ensure the budget (cost estimate) of PC & Provisional

Sum are included in the tender document.

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 Role of QS in managing the PC
Sum & Provisional Sum
i. Preparing tender document for PC Sum works.

ii. Preparing tender report.

iii. Evaluate the work done.

iv. Put the figure in Interim Payment Certificate

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 NSC & NS
 Clause 59.2
(Objection of Nomination NSC/ NS by SO)

SO “shall not” nominate:

a) Person against whom the contractor;
Contractor to object in writing within 21 days from the
date of SO’s instruction.

b) A person who not enter into sub-contract.

(without proper documentation needed)

c) A person who did not pay indemnity (gantirugi) to the

Government.

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 NSC & NS
 Clause 59.3 – Pursuant to clause 59.2

Therefore, SO may:

a) Nominate an alternative NSC/ NS.

b) Instruct the Works as variation including omission, so that the
Works shall be executed by other party employed by SO either
concurrently or other date.
c) Arrange the MC to execute the Works.

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 PAYMENT TO NSC/ NS
 Clause 60.1

i. Paid directly to NSC/NS.

ii. Through/in the certificate of payment to MC.
(Bayaran melalui MC)

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 PAYMENT TO NSC/ NS
 Clause 60.2 – SO may deduct some amount to
NSC/NS due to:

i) In respect of some act or default solely of the NSC/NS.

ii) Amount agreed by MC and NSC/NS awarded in arbitration/
litigation in favour of MC.
iii) Amount of claim for loss & expenses by NSC/NS.

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