PC Sum vs Provisional Sum vs Variation — What You Are Actually Paying For (NZ)

Steve Parker
May 31
6 min read

Updated: 5 days ago

Three words on a NZ building invoice cause more confusion than any others: provisional sum, prime cost, and variation. They are three different things with three different rules — and the difference is real dollars on your final account.

By Steve Parker · Trueworks · NZ construction contract review · 5 min

What you'll learn

What separates a provisional sum, a PC sum, and a variation
Why an allowance adjustment is not a variation — and the double-margin trap
A four-point check for these line items on your invoice

Quick answer: A provisional sum is a budgeted allowance for work that could not be fully scoped when you signed; a prime cost (PC) sum is an allowance for an item you will choose later; a variation is an actual change to the agreed scope. Provisional and PC sums are expected to be adjusted to their real cost, carrying the margin already agreed in the contract — they are not variations, and they should not pick up a second variation margin. Working out which of the three a charge actually is tells you what you genuinely owe.

PC sum vs provisional sum — the difference side by side

What it covers: A PC sum (prime cost sum) covers the supply of a specific item you have not selected yet — tapware, tiles, appliances. A provisional sum covers a parcel of work that could not be fully scoped when you signed — classically groundworks, drainage, or piling.
What is fixed vs floating: With a PC sum the installation labour normally sits inside the fixed contract price and only the supplied cost of the item floats. With a provisional sum the whole parcel floats — labour, materials, and plant — until the work is measured and done.
Who carries the risk: With a PC sum you largely control the exposure, because the adjustment follows the item you choose. With a provisional sum the exposure follows site conditions and actual scope, which nobody fully controls at signing.
How adjustment works: A PC sum is adjusted to the actual supplied cost of your selection plus the agreed handling margin, with a credit if you choose under the allowance. A provisional sum is adjusted to the actual, substantiated cost of the work — up or down — carrying the margin already agreed in the contract.
Where you see it in an NZ quote: A PC sum appears against a named item, for example "PC sum — $4,000 — kitchen appliances". A provisional sum appears against a parcel of work, for example "provisional sum — $18,000 — site drainage".

Provisional sum, prime cost, variation. They get used interchangeably in conversation and on some invoices, but they are three separate mechanisms with three separate rules. Knowing which one you are looking at is the difference between a charge you owe and a charge you can question.

A provisional sum

A provisional sum is an allowance the builder includes for work that could not be fully measured or priced when you signed — classically groundworks, drainage, or piling, where the real scope only emerges once digging starts. The contract carries a number, say "$18,000 provisional for site drainage." When the work is detailed and done, that number is adjusted to the actual, substantiated cost — up or down. The adjustment is expected. It is not a variation, and it is not a sign anything went wrong.

A prime cost (PC) sum

A PC sum is an allowance for a specific item you have not selected yet — tapware, tiles, appliances, a wood-burner. You pay the actual supplied cost of whatever you choose, plus the builder's agreed handling margin. Choose above the allowance and you pay the difference; choose below and you should be credited. Again: an adjustment to an allowance, not a fresh variation.

A variation

A variation is an actual change to the agreed scope — something added, removed, or substituted relative to what the contract described. It is priced and, on residential work of $30,000 or more, notified under the contract's variation procedure. The full mechanics are in our homeowner's guide to building variations.

How each is charged — and what to check

Provisional sum — an allowance for not-yet-scoped work, charged at the actual substantiated cost plus the contract margin. Check that actual costs are substantiated and the margin matches the contract, not a new one.
PC sum — an allowance for a not-yet-selected item, charged at the actual supplied cost plus the agreed handling percentage. Check the handling percentage, and that you were credited if you chose below the allowance.
Variation — a change to the agreed scope, priced per the variation clause, with notice. Check for written notice (10 working days), a breakdown, and that the clause was followed.

The double-margin trap

The most common overcharge in this area is simple. A provisional-sum or PC-sum adjustment arrives relabelled as a "variation," with a fresh variation margin stacked on top of the margin already built into the allowance. You can be charged margin once. If the same dollars carry it twice, that is the line to question first.

A four-point check before you pay

Label check — is each extra correctly described as a provisional sum, a PC sum, or a variation?
Margin check — is margin applied once, at the agreed rate?
Substantiation — are actual supplier costs shown for the provisional and PC items?
Credit check — were you credited where a PC selection came in under its allowance?

If a single allowance adjustment runs into the thousands, or several stack together, it is worth a written, clause-cited read before you pay.

Send Trueworks your contract and the line in question. You receive a written, code-cited assessment of whether it was identified, notified, and priced the way the Building Act and your contract require — a second opinion you can put straight in front of your builder. NDA available; files NZ-hosted. → Get the free check at trueworks.co.nz/contact — or email hello@trueworks.co.nz

Not sure a variation or charge on your build is justified?

FAQ — Provisional sums, PC sums and variations in NZ

Is a provisional sum the same as a quote? No. A quote is a price for defined work. A provisional sum is an allowance for work that could not be fully defined at signing, expected to be adjusted to the real cost later.

Can a provisional sum go down? Yes. It is adjusted to the actual cost, up or down. If the real cost comes in under the allowance, you should be credited the difference.

Do I pay margin on a PC sum? Yes — the agreed handling percentage on the actual supplied cost, applied once.

Is a provisional-sum adjustment a variation? No. It is an expected adjustment to an allowance, not a change to the agreed scope. It should not carry a separate variation margin.

My builder charged variation margin on a provisional sum — is that right? That is the double-margin trap. Margin applies once. A second margin on the same dollars is the line to question.

What is a PC sum in a building quote? A PC sum (prime cost sum) is an allowance in a building quote for a specific item you have not selected yet — tapware, tiles, appliances, a wood-burner. You pay the actual supplied cost of the item you eventually choose plus the builder's agreed handling margin, with the allowance credited against it, so the final price moves up or down with your selection.

How does a provisional sum adjustment work under NZS 3910? Under NZS 3910:2023 a provisional sum is a placeholder in the contract price for work that may or may not be required, and it is spent only on the Contract Administrator's instruction. When the work is carried out it is valued the same way a variation is — schedule rates where they apply, otherwise net cost plus the contract margins — and the contract price is adjusted: the allowance comes out and the valued amount goes in. If the work is never instructed, the unspent sum is deducted.

How Trueworks helps

Trueworks reads your contract and final account and sorts every extra into its correct category — provisional sum, PC sum, or variation — then checks the charge and the margin against what the contract actually allows. You get a written, code-cited account of what you owe and what is open to question.

About Trueworks

Trueworks is built by Steve Parker — 20 years on the analytical side of NZ construction: variation reviews, contract advisory, and document-heavy estimation work. It is the same defensible, code-cited read a quantity surveyor would give a variation, made available to the homeowners and trades on the receiving end of one. Every report is checked and signed off by me personally before it goes out.

hello@trueworks.co.nz · trueworks.co.nz

Sitting on a variation, claim or contract clause you are not sure about? Send it with the contract — a written, code-cited answer back within 24 hours. Send us the drawings and the quote, tender or variation. You get a written, code-cited check back within 24 hours. No charge for your first check. No card, no obligation. NDA available. → Get the free check at trueworks.co.nz/contact — or email hello@trueworks.co.nz