Two small abbreviations do more damage to Australian building budgets than almost anything else: PC and PS. They’re the placeholder numbers a builder drops into a quote for things that aren’t fully decided yet — and set low, they make a total look sharp today and cost you the difference later, exactly when you have the least room to argue. This guide explains what each one is, how they differ, and how to check an allowance before it checks you.
What is a prime cost (PC) item?
A prime cost item is an allowance for a supplied product that hasn’t been selected yet — the goods, not the labour to install them. Tapware, floor tiles, the kitchen appliances, door hardware, the bathroom vanity: the builder knows you’ll need one, but not which one, so they insert an estimated supply cost.
The install is priced separately in the contract; the PC covers only the item itself. When you choose the actual product, the contract sum adjusts up or down by the difference between the allowance and the real price.
What is a provisional sum (PS)?
A provisional sum is an allowance for work that can’t be fully priced yet — labour and materials together — usually because the scope isn’t known until the build exposes it. Site works on a sloping block, rock excavation, underpinning, a retaining wall whose height depends on the cut: the builder estimates a figure and adjusts to actual cost once the work is defined or done.
Why allowances blow budgets
Both PC and PS items adjust to actual cost — so a low allowance isn’t a saving, it’s a deferred bill. The trouble is timing and leverage:
- The total looks sharper than it is. Tiles allowed at $28/m² and a $600 tapware allowance make one quote beat another that used honest numbers — until selection day.
- The difference lands when you can’t shop it. You discover the real tile price standing in the showroom mid-build, with the contractor locked in and swapping trades unthinkable. That’s the worst possible moment to find a number.
- It’s a legitimate quote that’s still misleading. Nobody has lied — the allowances are disclosed. They’re just optimistic, and optimism in a PC line is a variation with a delay timer.
How to check an allowance before you sign
- Make every allowance a named line with a figure. “PC/PS allowances included” is not a number — get each one listed so you can check it. A contractor who won’t itemise the allowances is telling you something.
- Benchmark each figure against real supply prices. Half an hour with a tile shop, a tapware catalogue and a kitchen supplier tells you which allowances are honest and which are bait. Run them through the PC/PS allowance benchmark.
- Re-quote the fantasy numbers before signing. An allowance you know is light is a negotiation you can win now and can’t win later. Ask for the figure to reflect your actual taste level.
- Read the adjustment clause. How PC/PS differences are calculated and whether the builder adds a margin on the adjustment is in the contract — check it as part of the building contract review.
PC/PS and variations: the same money, three doors
Prime cost, provisional sums and variations are the three ways the contract sum moves after you sign — and they’re often confused:
| Mechanism | What moves the price | When |
|---|---|---|
| PC item | You select a product dearer/cheaper than allowed | At selection |
| Provisional sum | The actual cost of provisional work is confirmed | When scope is known |
| Variation | You (or conditions) change the scope itself | Any time during the build |
A well-run build keeps all three visible and priced in writing before the work proceeds. The money traps guide covers the allowance lowball as one of the seven, and variation creep as another — this guide is the detail behind those two lines.
The owner-builder angle
As an owner-builder you’re often the one setting the allowances across your trade quotes, not just receiving them — which means the discipline is yours to keep. Carry a named allowance list into every trade contract, benchmark it, and reconcile the actuals as selections lock in. That running list is also what keeps your bank drawdowns and your contingency honest. If you’re holding quotes stuffed with round-number allowances right now, a Quote Teardown benchmarks them against current market rates and finds the gaps before you sign.