Civil Engr. Charging

8/12/2019 Civil Engr. Charging

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CHARGING FORCIVIL

ENGINEERING

SERVICES

Prepared by M.C. M


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Charges for Civil Engineering Services are usuallycomputed using one of the six methods:

1. Salary cost times multiplier plus direct non-salaryexpense (Reimbursable)

2. Hourly Billing Rates plus Reimbursable

3. Per Diem

4. Cost plus fixed fee (CPFF)

5. Fixed Price

6. Percentage of Construction Cost (Percentage)


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Salary cost times multiplier plus non-salaryexpense

Compensation on the basis of the salary cost times an agreedmultiplier is a frequently used method of determining charges forengineering services. With this method, charges for civil engineeringservices are based mainly on direct salaries.

The salary cost times multiplier method may be utilized as either amultiplier times salary cost (two multiplier version) or a multipliertimes

direct salary cost (single multiplier version)

The direct salary times multiplier or as it is frequently called thedirect labor times multiplier version is very similar to the salary costtimes the multiplier with the exception that it applies a singlemultiplier to unburdened direct labor cost, i.e., direct salarieswithout employees benefits. The single multiplier includes costassociated with employees benefits, overhead, and a margin forcontingencies, risk, and profit.


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The following factors are pertinent to the salary costtimes multiplier:

1. Salary cost is defined as the direct salaries plus the employeebenefits.

1. Multiplier which is applied to salary cost is a factor that compensatesthe Civil Engineer for overhead plus a reasonable margin for

contingencies, interest or invested capital readiness to serve, and profit.

2. Direct Non-salary expense usually incurred in engineering engagementsmay include the following:

Living and traveling expenses

Identifiable communications expenses

Expenses for services and equipment directly applicable to theproject

Identifiable drafting supplies, stenographic supplies, andreproduction work

Expenses for unusual insurance and specialized health and safetyprograms


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4. The Civil Engineers overhead which comprises a major portion of the

compensation generated by the multiplier on salary cost, includes thefollowing indirect cost:

Provision for office expenses

Tax and insurance other than those included as salary cost

Library and periodical expenses

Executive, administrative, accounting, legal, stenographic, andclerical salaries and expenses (Other than salaries included insalary costs and expenses)

Business development expenses

Provision for loss of productive time Cost of acquiring and maintaining computers, development of

software, and training staff when not billed as direct cost

5. Accounting records


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Hourly Billing Rate

The Hourly billing rate method of compensation is very similar to thesalary cost times multiplier method in that the hourly billing rateincludes all direct personnel expense, overhead and profit. Directnon-salary expenses are a separate item for reimbursement, usuallywith a service charge.

Per Diem

The term per diem normally refers to an eight-hour day. Directpersonnel services are frequently charged on a per diem basis


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Cost plus fixed fee

Under a cost plus fixed fee agreement, the Civil Engineer is reimbursed forthe actual costs of all services and supplies related to the project, including:

Salary costs

Overhead

Direct non-salary expenses

Fixed fee, an amount to compensate the Civil Engineer forcontingencies, interest on invested capital, readiness to serve, andprofit.


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Fixed Price

The fixed price can be calculated as the sum total of estimated engineeringcosts for salaries, overhead and nonsalary expenses, an allowance forcontingencies, interest on invested capital, readiness to serve, and areasonable amount for profit.

Fixed price compensation for basic services on certain design-type projectscan also be computed as an appropriate percentage of estimatedconstruction cost.


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Percentage of Construction Cost

The Percentage of construction cost method may be used to determinethe compensation of the engineer for services where the principalresponsibility is the detailed design or construction supervision offacilities to be constructed.

Construction cost is defined as the estimated total cost of constructingthe facility to be covered by the proposed detailed design orconstruction supervision services, excluding the fees and other costs ofsuch services, the cost of land and right-of-way, and legal andadministrative expenses.


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Schedule of Minimum Basic Fees

Principles to observe:

1. When doing work on foreign assisted projects, or in projects whereinternational; consultants participate, the Civil Engineer performingsimilar or equivalent work, should accept compensation thatapproximates the international standard rates.

2. Civil Engineers regularly employed in the private sector shall have aminimum compensation corresponding to 10% more than the minimumwage prevailing in the region as basic monthly salary. Civil Engineersemployed in the government sector shall have a minimum basic monthlysalary corresponding to appropriate entry positions provided by the CivilService Commission.

3. A Civil Engineer employed in the private sector who signs and seals theCivil Engineering plans, specifications and other related documents of acertain project for and in behalf of his employers shall be compensatedwith a minimum of 10% of the professional fee for the project, aver andabove the basic monthly salary.


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Minimum Compensation for Civil Engineer as a PrimeProfessional.

Group I-Simple Structures, one storey buildings, warehouses,market buildings and comparable projects

Project Construction Cost

P10 Million and less

Over P10 Million to P20 Million


Over P30 Million

Minimum Basic Fees

6%

P600,000 plus 5.5%

P1,150,000 plus 4.5% of excess ofP20 Million

P1, 600, 000 plus 3.5% of excess of

P30 Million


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Group II- Buildings of 3 to 14 floors, towers, tanks, industrial

buildings, piers, and comparable projects.





Over P30 Million

Minimum Basic Fees

7%

P200,000 plus 6.5% of excess ofP10 Million



P30 Million


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Group III- Buildings of 15 or more floors, long span and complex

bridges, high dams, port works, power plants.





Over P30 Million

Professional Fee

8%

P800,000 plus 7.5% of excess of P10Million



P30 Million

If the Civil Engineer is not the prime professional but renders basic civil engineeringservices only, his fee shall be a minimum of 25% of the prime professional fee.


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Minimum Compensation for Civil Engineer asProfessional not Prime.

Group IV-Hotels, large apartment buildings, shoppingcenters,resorts,hospitals,and comparable projects.





Over P30 Million

Engineers Fee

1.05%



P285, 000 plus 0.675% of excess of

P30 Million


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Minimum Compensation for Civil Engineers forrendering the following Services

1. Value Engineering 25% of Professional Fee+ 25% ofsavings

2. Expert Witness P2000 / appearance

3. Academic Services

a) BS degree holder P75/hr-P150/hr

b) Master degree holder P150/hr-P250/hr

c) Doctorate degree holder P250/hr-P400/hr

d) Lecturer (PICE-CPD) P500/hr

e) Conducting Tutorial/refresher courses P500/hr

f) Resource Speaker P500/hr

g) Writer/Author P3000/article

Date post:	03-Jun-2018
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Civil Engr. Charging

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