total project cost Alcanar, Nehemias De La Cruz, Airiz Faye Navarra, John Andrei Nicdao, Paula Isabelle Ortiz, Nino Anton Zacarias, Sharvin What is total project cost? ● Includes all expenses related to the project, such as materials, labor, and design services. 01 components of the total project cost ● ● ● ● ● Professional Engineering Costs Construction costs Legal and Land Costs Owners Costs, such as Project Administration, Staffing, Financing, and Overhead Contingency Allowance for Unknowns 02 Professional engineering costs What exactly is it? ● Fees paid to Engineers ● Estimate of probable cost intended for professional engineers responsible ● Must be approved by client 03 construction Cost ● Expenses related to the actual project processes or materials ● Includes cost of materials, labor, and equipment 04 What exactly are these? ● related to acquiring permits ● usually outside the control of engineers ● Must be estimated with client legal and land costs 05 owner Cost ● Related to administration, staffing, financing, and overhead. 06 Contingency allowance What exactly are these? ● for unknown expenses ● added to estimated probable cost at the start of the project ● reduction of this cost is possible The total project cost for a construction project includes several components: Professional Engineering Costs, Construction Costs, Legal and Land Costs, Owners Costs, and a Contingency Allowance. a little summary of the concepts 02 professional engineering cost professional engineering cost It is a part of the total project cost which are costs based on the engineering services. This may involve alternative or phase implementation schemes which add flexibility to the project. Furthermore, Civil engineering services are required for each of six typical phases of construction projects. All services are preferably performed by the same Civil Engineer for consistency and efficiency. Six (6) Construction Project Phases: 1 study and report 4 bidding / negotiating 2 preliminary design 5 construction 3 final design 6 operation professional engineering cost ● In the study and report phase, the costs included based on Civil Engineering services are as follows: field or traffic surveys, planning analyses, geotechnical explorations, and analyses. ● The estimated probable total cost of the project based on the study and report phase must be understood to be preliminary in nature. ● Study and report phase is important as it determines the scope and development of the entire project that includes the project’s overall capital and lifecycle cost. ● During the final and construction phase, additional surveying and geotechnical engineering services may be needed. ● Costs for additional or special engineering services may be required by the client or recommended by the Civil Engineer 03 Construction Cost What is construction COSTs ? ● The total cost of the entire construction project. ● Sometimes called “hard costs” Contract sum ● is the price agreed with the contractor and entered into the contract. ● Contract Sum can be adjusted Cost PLANNING ● Used to analyzed the estimated cost during the pre and post construction phases of the project. Cost planning includes: ● Initial Cost Appraisal ● Pretender Estimates ● Elemental Cost Plans ● Contract Sum ● Approximate Quantities Cost Plans ● Approximate Quantities Cost Plans Cost estimates ● Is the process of predicting the overall cost of a new building project ● The method used to estimate actual cost will vary with the increase in the amount of detail available. 1. Initial Cost Appraisal 4. Pre-Tender Estimates 2. Elemental Cost Plans 5. Contract Sum 3. Approximate Quantities 6. Final Account Construction price the cost of the entire construction of the Project, including all supervision, materials, supplies, labor, tools, equipment, transportation and/or other facilities furnished, used or consumed, without deduction on account of penalties, liquidated damages or other amounts withheld from payment to the contractor or contractors, Cost Index Construction Cost Index is an indicator of the average cost movement over time of a fixed basket of representative goods and services related to Construction Industry. Cost Indexes for different locations ● Cost and availability of labor. ● Cost of transportation of equipment and labor. ● Import duties and local taxes. ● Currency exchange rates. Capital Cost and operational cost Capital Cost Capital Cost are associated with one-off expenditure on the acquisition, construction or enhancement of built assets and might include: ● ● ● ● ● ● ● ● ● Land or Property acquisition Commissions Statutory fees Consultant fees directly associated with the development Materials, plant and equipment Labour Fixtures and Fittings Project Insurance, Inflation, taxation and financing Internal costs directly associated with the development Capital Cost and operational cost operational Cost Operational cost incurred in a day-to-day operations might include: ● ● ● ● ● ● Wages Utilities Maintenance and repairs Rent Sales General and administrative expenses Whole-life cost It is also known as the lifetime cost, “cradle to grave,” or womb to tomb.” Whole-life cost consider all costs associated with the life of a building, from inception to construction, occupation and operation and even ultimate disposal. Whole-life cost also takes into account certain costs that are usually overlooked, such as those related to environmental and social impact factors. Hard cost and soft cost HArd Cost Hard costs are costs that are directly related to your construction project. Some refer to these as brick-and-mortar costs, because these costs include the structure, construction site and landscape. Hard costs might include: ● Labour, equipment and materials required to complete the built structure. ● Site costs, such as utilities, drainage and so on. ● Landscape costs. Hard cost and soft cost soft Cost Soft costs are the indirect expenses involved in construction and development that are not directly attributed to the physical construction. Soft costs might include: ● ● ● ● ● ● Fees Land costs Off-site costs Loans accounting fees and interests Insurances and taxes Public relations and advertising costs 04 LEGAL, LAND, ADMINISTRATION, STAFFING AND FINANCIAL COST LEGAL, LAND, ADMINISTRATION, STAFFING AND FINANCIAL COST These are part of the probable total costs and are estimated in coordination with the client since they are usually outside the knowledge and control of the Civil Engineer. It includes audits, land costs, the cost of issuing bonds, interest for borrowed money during construction, legal administrative expenses and other services. LEGAL, LAND, ADMINISTRATION, STAFFING AND FINANCIAL COST EXAMPLES: ■ Legal fees ■ Real estate and land acquisition fees ■ Building permit review fees ■ Printing (construction documents and spec books) ■ Builder’s Risk Insurance ■ Construction bond ■ Construction interest expense 05 contingency allowance what is contingency allowance? A contingency allowance is an amount of money that is set aside in a project budget or plan to cover unexpected events or costs that may occur during the project. This allowance is intended to help account for the inherent uncertainty and risks that are associated with any project or undertaking. purpose of contingency allowance ● mitigate the risk of unexpected costs and to provide a safety net in case of unforeseen events such as bad weather, unexpected site conditions, or cost overruns on materials and labor. ● Help ensure that your project is completed successfully, without incurring any major delays or budget overruns. how is contingency allowance calculated? Contingency allowances can be calculated in different ways, but a common method is to allocate a percentage of the total budget or estimated costs. The percentage chosen may depend on the level of uncertainty and risk associated with the project, and can vary from project to project. For example, a contingency allowance of 5-10% may be sufficient for a low-risk project, while a higher-risk project may require a contingency allowance of 20% or more. Estimated Project Cost Contingency allowance P100,000 x 10% = P10,000 P100,000 + P10,000 = P110,000 (Total budget for the project) Example of how a contingency allowance might be used in a construction project: Suppose a construction company is contracted to build a new office building. The total cost of the project is estimated to be P200 million, and the company decides to allocate a contingency allowance of 10% to account for unforeseen events. During the course of the project, unforeseen issues arise that require additional work and expense, such as unexpected site conditions or delays in receiving materials. These issues lead to an additional P5,000,000 in costs. However, because the contingency allowance was established, the construction company is able to cover these extra costs without exceeding the budget or requiring additional funding. It's important to keep track of the contingency allowance, and make sure that we're not spending more than we need to. If we don't use all of the contingency money, we can use it for other parts of the project or give it back to the project owner. In conclusion, contingency allowance is a vital part of construction project planning and budgeting. It helps us manage the risk of unexpected costs and keep the project moving forward, even when things don't go exactly as planned." Thank you!
