GROUP 9
PROFFESIONAL
ENGINEERING COST
 Costs based on the engineering
services.
 Civil engineering services are
required for each 6 typical
phases of construction project.
PROFFESIONAL
ENGINEERING COST
(6 CONSTRUCTION PHASES)
I. Study and report
II. Preliminary design
III.Final design
IV.Bidding/negotiating
V. Construction
VI.Operation
CONSTRUCTION COST
 “hard cost”
 Total cost of the entire project
CONTRACT SUM
COST PLANNING
COST ESTIMATE
COST INDEX
CONSTRUCTION COST
CONTRACT SUM – price
agreed with the contractor and
entered to the contract.
COST PLANNING
COST ESTIMATE
CONSTRUCTION COST
COST PLANNING
• Initial cost appraisal
• Elemental cost plans
• Approximate quantities cost
plans
• Pretender estimates
• Contract sum
COST ESTIMATE
CONSTRUCTION COST
COST ESTIMATE – predicting
the overall cost
CONSTRUCTION COST
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
CONSTRUCTION COST
COST INDEX – an indicator of the
average cost movement over time of
the fixed basket of representative
goods and services related to
construction industry.
CONSTRUCTION COST
COST INDEX
• Cost and availability of
labor
• Cost of transportation of
equipment and labor
• Import duties and local taxes
• Currency exchange rates
CONSTRUCTION COST
CAPITAL COST &
OPERATIONAL COST
CONSTRUCTION COST
CAPITAL COST – associated
with one – off expenditure on the
acquisition, construction or
enhancement of built assets
CONSTRUCTION COST
CAPITAL COST
•
•
•
•
•
•
•
•
•
Land and property acquisition
Commissions
Statutory fees
Consultant fees
Materials, plant and equipment
Labor
Fixtures and fittings
Internal costs
Project insurance, inflation &
financing
CONSTRUCTION COST
OPERATIONAL COST
•
•
•
•
•
•
Wages
Utilities
Maintenance and repairs
Rent
Sales
General and administrative
expenses
CONSTRUCTION COST
WHOLE-LIFE COST
 consider all costs associated with
the life of the building.
 Also considers certain costs
that are usually overlooked
CONSTRUCTION COST
HARD COST & SOFT COST
CONSTRUCTION COST
HARD COST
 Directly related to your
construction project
 Include the structure,
construction site, and
landscape
CONSTRUCTION COST
SOFT COST
 Indirect expenses
 Fees
 Lad cost
 Off-site cost
 Loans accounting fees and
interests
 Insurance and taxes
 Public relation and advertising
cost
LEGAL, LAND, ADMINISTRATION,
STAFFING AND FINANCIAL COSTS
 Part of the probable total cost
 Estimated in coordination with
the client
CONTINGENCY ALLOWANCE
 Amount of money that is set aside in
the project budget or plan to cover
unexpected events or costs
CONTINGENCY ALLOWANCE
PURPOSE:
i. Mitigate the risk of unexpected costs
ii. To provide safety net in case of
unforeseen events
iii. Help ensure that your project is
completed successfully without
budget overruns
CONTINGENCY ALLOWANCE
Common method to calculate is to allocate
percentage of the total budget or estimated
costs.
Example:
5-10% for low-risk project
20% or more for high-risk project
Estimated
cost
Contingency
allowance
P100,000 x 10% = P10,000
P100,000 + P10,000 = P110,000 (total budget)
QUIZ
QUIZ:
1.
2.
3.
4.
It is the cost based on engineering services.
A cost also known as “hard cost”.
It is the price agreed with the contractor.
It is an indicator of the average cost movement over
time.
5. It is associated with one – off expenditure on the
acquisition, construction or enhancement of built
assets.
QUIZ:
6. It consider all costs associated with the life of the
building.
7. Costs that are directly related to your project.
8. Costs that are indirect expenses involved in
construction and development.
9. It is the amount of money that is set aside in the project
budget or plan.
10. It includes all expenses related to the project.