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Charges of Civil Engineering Services

Civil engineering services charges are usually computed using six main methods: salary cost times multiplier plus expenses, hourly billing rates plus expenses, per diem, cost plus fixed fee, fixed price, and percentage of construction cost. The salary cost times multiplier method bases charges on direct salaries plus a multiplier for overhead and profit. Hourly billing rates similarly cover salaries, overhead and profit. Per diem refers to an 8-hour work day plus travel expenses. Cost plus fixed fee reimburses all costs plus a pre-agreed fixed fee. Fixed price sets the total fee upfront based on estimated costs. Percentage of construction sets fees as a percentage of estimated construction costs but is rarely used alone due to project variability.

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3K views14 pages

Charges of Civil Engineering Services

Civil engineering services charges are usually computed using six main methods: salary cost times multiplier plus expenses, hourly billing rates plus expenses, per diem, cost plus fixed fee, fixed price, and percentage of construction cost. The salary cost times multiplier method bases charges on direct salaries plus a multiplier for overhead and profit. Hourly billing rates similarly cover salaries, overhead and profit. Per diem refers to an 8-hour work day plus travel expenses. Cost plus fixed fee reimburses all costs plus a pre-agreed fixed fee. Fixed price sets the total fee upfront based on estimated costs. Percentage of construction sets fees as a percentage of estimated construction costs but is rarely used alone due to project variability.

Uploaded by

AgrawalAnurag
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CHARGES OF CIVIL ENGINEERING

SERVICES

CHARGES FOR CIVIL ENGINEERING SERVICES ARE


USUALLY COMPUTED USING ONE OF THE SIX
METHODS;

Salary cost times multiplier plus direct salary


expense (Reimbursable)
 Hourly Billing rates plus reimbursable
 Per Diem
 Cost plus fixed fee (CPFF)
 Fixed price
 Percentage of construction cost


SALARY COST TIMES MULTIPLIER PLUS DIRECT


SALARY EXPENSE (REIMBURSABLE)


Are frequently used method of determining


charges for engineering services. With this
method, charges for engineering services are
based mainly on direct salaries.

Salary cost defined as direct salary plus employee


benefits.
Multiplier is a factor that compensates the civil
engineer for overhead plus a reasonable margin
for contingencies, interest or invested capital
readiness to serve and profit.
Direct non-salary expenses

HOURLY BILLING RATE




The hourly billing rate method of compensation is


very similar to the salary cost times multiplier in
that hourly billing rate includes all direct
personnel expense, overhead and profit.

PER DIEM


the term per diem normally refers to an eight


hour day.
The per diem charge should be based on the
complexity, risk and important of the services
and on the Civil Engineers professional standing,
expertise and breadth of experience. The Civil
Engineer is also reimbursed for travel and
subsistence cost and for other out of pocket
expenses incurred when away from the home
office.

COST PLUS FIXED FEE


Under this agreement, the Civil Engineer is
reimbursed for the actual costs of all services and
supplies related to the project including: salary
cost, Overhead, Direct non salary expense, Fixed
fee .
 The cost plus fixed fee basis requires that the
client and the Civil engineer define and agree
upon the scope of services the Civil Engineer to
perform. Such definition of the scope of service is
essential to enable the Civil engineer to estimate
costs and propose an equitable fixed fee amount.
This must be incorporated into the clientengineer agreement.


The cost plus fixed fee method can also b used when
the Civil Engineer is required to start providing
service before the detailed scope of services can be
determined. In such cases, the following
considerations apply:

1. The general scale and intent of the project should


be fairly well defined, even if the full scope is
indeterminate; for example, the number, size and
character of buildings or other facilities.
2. The types of service to be performed by the Civil
Engineer should be agreed upon and fully set forth.
The agreements should also provide for appropriate
adjustments in the fixed fee, in the event that the
physical scope of the project, time of completion, or
level of effort and services required are materially
changed over those contemplated during the
negotiations.

FIXED PRICE


The fixed price method of compensation is frequently


used for investigations and studies and for basic
services on design type projects where the scope and
complexity of the assignment are clearly and fully
defined. The fixed price amount can be calculated as
the sum total of estimated engineering costs for the
salaries, overhead and nonsalary expenses, an
allowance for contingencies interest on invested
capital, readiness to serve, and a reasonable amount
for profit.
A fixed price agreement should contain a clearly
stated time period during which the services will be
performed and a provision for adjustment of
compensation if the project is delayed for reasons
beyond the Civil Engineers control.

Partial payments should be made to the Civil


Engineer at stated intervals usually once a
month during the performance of the services.
These payments are usually based on the Civil
Engineers statement of percent completion to
date.

PERCENTAGE OF CONSTRUCTION
The percentage of construction cost method is
seldom used raw. Because of increasing
complexity and large variation in tasks for
projects, the percentage of construction cost fee
curves no longer have a direct correlation to the
required engineering fees for specific projects.
 This Method may be used to determined the
compensation of the engineer for services where
the principal responsibility is the detailed design
or construction supervision of facilities to be
constructed.


Construction Cost is defined as the estimated


total cost of constructing the facility to be covered
by the proposed detailed design or construction
supervision services, excluding the fees and other
costs of such services, the cost of land and right of
way, and legal and administrative expenses.
 The percentage fee shall consider the type,
complexity, location, and magnitude of
construction cost of the project and shall not
exceed the following percentage of estimated
construction cost:
a. Feasibility studies 3%
b. Detailed engineering design 6%
c. Detailed architectural and engineering design8%
d. Construction supervision 10%


These percentages include only those works


normally undertaken in arriving at the expected
outputs and do not include special studies or
investigations.
 It is further emphasized that the above
percentages are only ceilings and it does not
necessarily mean that the said percentages shall
always be adopted for each project. The actual
percentage for a particular project will depend on
the factors the type, complexity, location, and
magnitude of construction cost.


SCHEDULE OF MINIMUM BASIC FEES




When doing work on foreign assisted projects or in


projects where international consultants participate,
the Civil Engineer performing similar or equivalent
work, should accept compensation that approximates
the international standard rates.
Civil Engineers regularly employed in the private
sector shall have minimum compensation
corresponding to 10% more than the minimum wage
prevailing in the region as basic monthly salary. Civil
Engineers employed in the government sector shall
have minimum basic montly salary corresponding to
appropriate entry positions provided by the Civil
Service Commission.

A Civil Engineer employed in the private sector


who signs and seals the Civil Engineering plans,
specifications and other related documents of a
certain project for and in behalf of his employers
shall be compensated with a minimum 10% of the
professional fee for the project, over and above
the basic monthly salary.

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