What percentages are typically used for the provisional sum and provisional price in hotel MEP engineering?
I am cost control expert Tony Zhao. This issue is critical in MEP engineering tendering and cost control, because the setting of provisional sums and prime cost sums directly affects the accuracy of the project budget, the fairness of the tendering process, and the efficiency of later change management. Based on GB50500-2013 "Code of Bills of Quantities and Valuation for Construction Works" and my project experience, the following is a detailed analysis for you.
First, provisional sums and prime cost sums are two different concepts. A provisional sum (Provisional Sum) is funds reserved by the tenderee for unforeseen costs (such as design changes, site instructions, and claims), and belongs to risk reserve; a prime cost sum (Prime Cost Sum) is an amount tentatively set at the time of tendering because the design depth is insufficient for accurate pricing, and is used for specified materials, equipment, or specialist works.
According to Articles 4.4.1 and 5.2.5 of GB50500-2013, the proportion of the provisional sum is usually set at 10%-15% of the divisional and sub-divisional works cost, but the specific figure needs to take into account the complexity of the project. For hotel MEP engineering, due to the complexity of systems (such as air conditioning, water supply and drainage, fire protection, intelligent systems, etc.), I recommend 12%-15%. For example, in a certain five-star hotel project in 2019, the total MEP cost was about RMB 80 million, and we set the provisional sum at 15% (i.e., RMB 12 million) to address HVAC pipe changes and detailed design of intelligent systems; the actual amount used was about RMB 9.5 million, effectively controlling risk.
The prime cost sum is set according to the professional characteristics of the materials or equipment. Article 4.4.2 of GB50500-2013 requires that the prime cost sum should be based on market conditions or experience from similar projects, and its proportion usually accounts for 5%-10% of the total MEP cost. In hotel projects, common prime cost sums include imported chillers, variable-frequency water pumps, intelligent lighting control systems, etc. For example, in a certain chain hotel renovation project, the total MEP cost was RMB 20 million, and we set the prime cost sum at 8% (RMB 1.6 million) for the procurement of imported fan coil units and the fire alarm system; ultimately, RMB 200,000 was saved through tender comparison and selection.
In practical experience, note that: the provisional sum should not be too high, otherwise it will tie up project funds; the prime cost sum needs clear specifications and parameters to avoid later disputes. In a certain high-end hotel project in 2021, because the elevator model was not specified in the prime cost sum, additional costs arose after tendering, and we ultimately resolved the problem by refining the bill of quantities clauses.
Summary: For hotel MEP engineering, the provisional sum is recommended at 12%-15%, and the prime cost sum at 5%-10%, with specific adjustments based on design depth, market fluctuations, and risk preference. The above is for reference. The actual project situation still needs to be further comprehensively evaluated and implemented in combination with specific working conditions, site conditions, and other factors.