Economical management of

architecture
Prof. Javier Lahuerta
PhD, Architect
Associate Partner @ Foster + Partners London
Section 6:

Costs & Bills of Quantities

Preliminary Rough estimates
Building Construction Estimates
Project and Construction Costs
Hard-Soft costs
Direct-Indirect costs
From last chapters…
RIBA Stage 1 (old stages A and B) – Additionally, a comprehensive set of Site
Preparation and briefing Information needs to be sourced, including Site
During Stage 1 of the RIBA Plan of Work, the Surveys, ready for Stage 2 to commence.
client team begins the briefing process and
considers the Client Requirements in more Note: Despite this is not a Design Phase yet, often, a
detail for the project, which will be recorded in preliminary study by an architect is required to be able
to carry out feasibility studies, to get to know what
the Project Brief. The Project Brief includes potential building can be built on a given site in terms of
guidance on Project Outcomes, Sustainability volume, sqm, typology and other legal requirements
Outcomes, and Quality Aspirations. under building and planning regulations. That may
sometimes determine whether the client will buy the
Feasibility Studies may be required to
plot or not.
determine and shape the brief, but these
studies are not part of the design process. The
design team with appropriate knowledge and
skills to deliver Project Outcomes needs to be
selected at this stage.
Information Requirements, a Responsibility
Matrix, and a Digital Execution Plan should
also be prepared.
FEASIBILITY WITHIN PREPARATION PHASE
INITIAL ROUGH ESTIMATE - CASE STUDY
•150m2 GFA
•Works license tax (ICIO) = 2 to 5%
of Construction Cost Estimate
(PEM) (2.66% in this case)
•Tasa Prestacion Servicios
Urbaniticos ( council urban services
tax)= a fixed cost depending on the
town
•Geotechnical study = fixed cost
•Topographic Survey = fixed cost
“Construction Cost” here means the construction contract •Notary + Civil registration 0.6%-
price, excluding VAT in a traditional procurement DBB route 1,5%
What these examples referred to was the
overall Construction Cost for the house,
that included everything related to the
contractor, or the overall figure agreed in a
construction contract, including:

Building Costs Estimates (out of the BoQ),

(which is the PEM in Spain - Presupuesto de
Ejecución Material) and is sometimes
referred to as Hard Costs
+
Other General Contractor’s Expenses or
Overheads, which can be attributed to that
particular project
+
Contractor’s Benefit
+
VAT

Let’s have a closer look into these concepts

What Is Overhead?
Overhead refers to the ongoing business expenses not directly
attributed to creating a product or service.
It is important for budgeting purposes but also for determining how much
a company must charge for its products or services to make a profit. In
short, overhead is any expense incurred to support the business while not
being directly related to a specific product or service
Construction and Project Costs

1-project costs
2-building estimates
3-construction costs
Cost vs Price
The terms 'cost' and 'price' are are frequently confused with one another and used incorrectly.
However, their meanings are clear, and very different:

The term 'cost' refers to the expense incurred in the production of a product or service.
The term 'price' refers to the payment required for the supply of a product or service.
Typically, in many businesses, the difference between what something costs to produce,
and the price it is sold for equates to the profit earned by the producer / seller.

However, in the construction industry, the term cost typically refers to the expense incurred in
relation to building works. It can also be used to refer to:

Wider project costs incurred by the client, such as fees, finance charges, land purchase costs and so
on.
Long term project costs such as lifecycle costs, whole life cost and so on.

Costs commonly incurred on a construction project can be categorised as hard costs (those related to
physical construction) and soft costs (those that are not instantly visible or tangible).

In the construction industry, the term 'price' typically refers to the price offered by a supplier. This
could relate to a price for carrying out the whole or a part of the construction works, for the supply of
goods, for the supply of services and so on.
1- Project Costs vs Construction Costs

https://youtu.be/ymQUEsZukRo?feature=shared
1- Project Costs
Project costs are the costs of the physical construction of the building, together with any
expenses beyond it. These include any costs associated with financing, permitting,
professional services, and furnishings. Typically project costs include:

•Professional service fees (architects, engineers, acousticians, energy modeling, and other
consultants)
•Legal fees
•Real estate and land acquisition fees
•Building permit review fees
•Geotechnical and survey fees
•Furniture, Fixtures, and Equipment (FF&E)
•Interior artwork and accessories
•Printing (construction documents and spec books)
•Third-party special material testing fees
•Hazardous material testing and removal
•Moving costs
•Builder’s Risk Insurance
•Owner-provided technology, security, and communications
•Internal fees for any workers or processes associated with the building project
•Advertising
•Construction webcams or other construction documentation services
•New utility/meter fees
1- Project Costs
Why Project Costs Vary

Project costs will significantly differ depending on the project’s scope and requirements.
E.G.: Projects that require land acquisition and extensive site work will have higher
project costs. At the same time, projects that require specialized consultants outside
the scope of Mechanical, Electrical, Plumbing, and Structural engineers will also have
higher project costs.

FF&E (furniture, fixtures and equipment) will also affect project costs. While many
projects only need to budget 1-2% of the construction cost for FF&E, other projects will
budget more. For example, hospitals require expensive medical equipment, significantly
increasing the FF&E budget.
2- Construction Cost vs
3- Building Cost Estimate (BCE - Spanish PEM)
By 3-Building Cost Estimate (in Spain, the PEM) we understand the cost of
•labour,
•materials and
•equipment,
required for the construction of a building project (the so-called hard costs).

The BUILDING COST ESTIMATE is what architects and the design team (usually with the help
of the quantity surveyor) calculate based on the bill of quantities BoQ, and by applying to it
the official market prices of materials, labour and equipment throughout the design stages.
It includes direct and indirect construction costs. (We will see these definitions later)

Then, at tender or during the pre-construction stages, the contractor and his surveyors will
be the ones in charge of these quotations, to be able to place an offer, -a final price for their
whole job-, or
Just leave the price open, fully or partially, and to be worked out during the Construction
Stage, depending on the procurement route.
2- Construction Cost vs
3- Building Cost Estimate (BCE - Spanish PEM)

To get to the 2-Construction Cost (or contractor’s contract price) in works for the public
sector (CC = PEC Presupuesto de ejecución por contrata in Spanish), we generally add two
concepts to the Building Cost Estimate BCE - (PEM)- equation:

A-Contractors Soft Costs, (its Overheads and General Expenses, which are usually
quantified as 11%-17% of the PEM) and
B-Contractor’s profit (Industrial Profit in spanish construction terminology –usually
quantified as 6% of the PEM, in works for the public sector)

In Summary, we have that:

Construction Cost (contract cost) = hard costs or BCE + Contractor’s Overheads
(about 13%) + profit (about 6%) = 119% x BCE
3- Building Cost Estimate (BCE - Spanish PEM)
The sum of all measurements in each work section multiplied by each of their unitary costs provides us
with the Building Cost Estimate. Each unitary cost, is the result of the sum of direct costs (which are
the result of the Basic Cost of materials, labor, equipment and machinery, and other auxiliary prices
multiplied by their quantities), and indirect costs (often calculated as a percentage), made by the same
group of specialists. The contractor’s general expenses and profit margin, nor the fees of
professionalsor nor the taxes are included.
Sect 01. Earth movements 2200
sect 02. Foundations 6800
sect 03. Buried sanitation 1500
sect 04. Structures 16300
sect 05. Roofings 4800
sect 06. Envelope and partitions 9500
sect 07. Carpentry and locksmith 7100
sect 08. Services 10700
sect 09.Coatings/Renders 18200
sect 10. Paints 3700
sect 11. Quality Control 900
sect 12. Health and Safety 1700
sect 13. Waste management 1500
Total building cost estimate 84900 eur
3- Building Cost Estimate (BCE - Spanish PEM)
The sum of all measurements in each work section multiplied by each of their unitary costs provides us
with the Building Cost Estimate.

Note on Work sections

Construction projects are typically broken down into basic operations (work sections) which
involve undertaking tasks that are similar and therefore convenient to group as one activity.
This may be for the purposes of phasing or to realise time or cost savings.

The activities within one work section may be linked in terms of construction
method, materials or sequence.
Each of the work sections typically involves only one main trade. It may involve work on
a part of a building (e.g conservatory) or work involving a type
of material (e.g brickwork, stone or glass-block walling) or a specific activity (such as site
survey or demolition).

When all the work sections identified are combined, they will represent the
entire programme of work for the project.
The content of each of the work sections is defined by means of a schedule of
basic quantities. This will allow quantification of the resources required
to complete each operation.
3- Building Cost Estimate (BCE - Spanish PEM)
The sum of all measurements in each work section multiplied by each of their unitary costs provides us
with the Building Cost Estimate.

Note on Work sections

For examplein the UK, The Common Arrangement of Work Sections (CAWS), is
a classification of work sections in construction and is sometimes used to provide
consistency in the arrangement of specifications and bills of quantities.

CAWS defines over 300 work sections which are designed to:
•Result in better co-ordination between drawings, specifications and bills of
quantities;
•Give a predictable location for required information;
•Divide project information into work packages to give the contractor flexibility, and
•Result in fewer conflicts between documents.

We will see other examples from Spain and the US

3- Building Cost Estimate (BCE - Spanish PEM)
Work sections S: Piped supply systems
CAWS is divided into 23 subheadings T: Mechanical heating / cooling / refrigeration
corresponding to each letter of the systems
alphabet (except I, O and Y). The U: Ventilation / air conditioning systems
classification is as follows: V: Electrical supply / power / lighting systems
W: Communications / security / control systems
A: Preliminaries X: Transport systems
B: Complete buildings / structures / units Z: Building fabric reference specification.
C: Demolition / alteration / renovation Each of the above subheadings is further sub-
D: Groundwork classified into related activities.
E: In situ concrete / large precast concrete
F: Masonry For example, G: Structural / carcassing metal /
G: Structural / carcassing metal / timber timber, is broken down into:
H: Cladding / covering
J: Waterproofing G10 Structural steel framing
K: Linings / sheathing / dry partitioning G12 Isolated structural metal members
L: Windows / doors / stairs G20 Carpentry / timber framing / first fixing
M: Surface finishes G30 Metal profiled sheet decking.
N: Furniture / equipment
P: Building fabric sundries UK, CAWS has now been superseded for
Q: Paving / planting / fencing / site furniture some purposes by the New Rules of
R: Disposal systems Measurement (NRM).
3- Building Cost Estimate (BCE - Spanish PEM)
This costing segment (level) is the most important, because it is where work measurements
are made and the quantities of each work unit assigned. It is in the unitary costing level (see
next pages for different levels in the cost struture) where the analysis of the construction
costs is carried out; thus, when the cost technician, architect or contractor manager
examines the BOQ + BCE document to compare between the costs from different suppliers
or subcontractors, this is the cost that is evaluated.

2- Construction Cost (Contract Cost)

The Contract Execution Cost, results from the sum of the Construction Costs plus the
General Expenses, Contractor’s profit margin and taxes (VAT). General expenses values (GE)
and profit margin depend on the contract or agreement between the developer and the
construction company;
Where BCE was 84900 euros;
GENERAL EXPENSES 10% = 8490 eur
Profit Margin 5% = 4245 eur
TOTAL = 97635 + VAT 21%= 20.503,35 = 118.138,35
Total contract cost 118.138,35 eur
In some cases the contract budget is provided without tax application (Contract Cost before
Taxes, which will be presented later at the justification invoices for the executed Works.
2- Construction Cost

Contingencies
Contingencies are also factored into construction costs, often counted as part of the soft
costs. On any construction project, there is a degree of uncertainty. Contingencies provide
a buffer.
On most projects, contingencies are greater during earlier phases but come down as the
design gets more defined. At later phases, contingencies equal 3-5% of the construction
cost, though this number depends on the project’s complexity. For example, renovation
projects usually have a higher contingency because they tend to be more unpredictable.
Other costs to a private client:
Example: a citizen of Valencia, buys a plot or 120.000 euros and he has got an additional
construction cost estimate (read 119% x PEM) of 380.000 euros to build a house
The project costs, including taxes will be, as a rough estimate:
Land=120.000 + Construction = 380.000 (Building Cost (81%) = 304.000),
TOTAL = 500.000EUROS

+ the following concepts (including taxes, excluding

financial costs):
•VAT on Construction Cost = 10% = 38.000
•VAT on Land purchase = 21% = 25.200
•Architect’s fees 8% of Building Cost Estimate = 24.320 eur + 21% VAT (5107eur) = 29427
•Clerk of Works’ fees = about 30% of the Architect’s fees = 7296 + VAT 21% = 8.828
•ICIO (tax on construction activity) + License/Urban Permission = 5% of BCE = 15.200 eur
•AJD (Deeds by the Notary) 1% of BC = 3.400 eur
•Topographic Survey = 1000 euros + 21% VAT = 1.210 eur
•Geotechnical Study = 2000 euros + 21% VAT = 2.420 eur
Project TOTAL Costs to the Private Client = 623.685 euros
Note: In the case of professional developers, the VAT is not a cost in their accounting because they
deduct it from the VAT they charge to their own clients, therefor only acting as tax collectors.
As explained, “Construction Cost”, from the client’s perspective,
often means the Contract Price (expected to be specified in a
Construction Contract), without applicable taxes, that is, the overall
(Contractor’s + Construction) Cost (to the client).

However, some other times, from the contractor’s perspective, that

is within the contractor’s activity, “Construction Costs” refer to just
the “hard costs” (with equivalent concepts as the BCE) that is, to all
its costs to build a project, but without its own business profit nor
the corresponding so-called Soft costs or overhead.

(PEM) BCE = Hard Costs

(GG) General Expenses = Soft Costs
(BI - Beneficio Industrial) = Contractor’s benefit

Within the Hard Costs, we will analyse Direct and Indirect costs as
the first tier in the cost estimate structuring.
Hard costs and Soft costs in construction

Hard Costs
Hard costs, also called "core" or "tangible" expenses, refer to the costs directly associated with the
construction of a building or structure, such as materials, labor, and equipment. These costs make up
the majority of a construction project’s budget (typically around 70%) and are calculated from the
start of the project’s construction phase until the construction activities are completed. They are
typically fixed and only change significantly if the scope of the project changes.

The following can all be considered hard costs in construction:

• Construction labor and material costs — Salaries for construction employees and material
purchases, such as steel, wood, concrete, insulation, glass, and other related building materials.
• HVAC systems and utility installation — System and installation costs of heating, ventilation and
air condition systems, as well as electrical installation, plumbing, etc.
• Safety systems and structures — Automatic fire sprinkler systems, fire alarm systems, fire escapes,
building security systems, etc.

• Interior and exterior finishes — Finishing touches like wallpaper, countertops, flooring, paving of
parking lots and other exterior sitework.

• Landscaping — Trees, grass, mulch, fertilizer, flowers, bushes, retaining walls, and any other
landscaping elements that make the exterior of your building visually appealing and welcoming.
Hard costs and Soft costs in construction

Two key factors that may influence your hard cost estimate:

Supply Chain and Market Conditions —Fluctuations in the supply chain due to factors such as inflation
and global events, like the COVID-19 pandemic, can affect the cost of materials, labor, and project
scheduling. For example, the price of steel skyrocketed during the pandemic and still remains
significantly higher than pre-pandemic costs.

Keeping in mind that hard cost estimation is dependent on market conditions can give you better
insight into what your overall construction project will cost and help you prepare a flexible timeline
that works around material shipping delays.

Geographical Location — Hard costs can vary depending on the geographic location of your building
and are often more expensive in areas with colder climates. For example, a building in northeast
Wisconsin may require more insulation or a dependable roofing system that can withstand heavy snow
and ice when compared to a building in Florida.

Other geographical factors that can influence hard costs are urban density, proximity to raw materials
or distribution hubs, proximity to bodies of water, and site conditions. A preliminary conversation with
your design/build contractor or design professional can help expose potential areas of concern before
you get too far down the road. You may have options to construct in a different location or weigh
potential design considerations to mitigate costs.
Exercise 21:
Hard costs and Soft costs in construction

Soft Costs
Reserach and explain in hand writting, maximum in an A4, the concept of Soft
Costs in Construction accounting for two different settings:

A-soft costs for the contractor

B-soft project costs for the client (developer or real Estate Investor)
Soft Costs – For the Client, Developer or Investor in Real Estate
Soft costs, also known as "overhead" expenses, are intangible costs not directly tied to the physical
construction of a project, such as planning permits and legal fees.
The scope of your project, local regulations, and loan interest rates can all influence your project’s soft
costs.
Soft costs are usually managed separately from hard costs and are spread out over the entire
construction timeline, sometimes even continuing beyond the construction phase. This can make them
more difficult to predict and estimate compared to hard costs.

Often, 70 to 80% of the project’s budget is allocated to hard costs for direct construction and 20-30%
for Soft costs.

The following are all examples of soft costs in Real Estate:

• Design fees
• Contractor fees
• Legal and accounting fees
• Land costs and/or surveying
• Marketing expenses promoting new building
• Financing costs and interest payments
• Security system contract fees
• Environmental and sustainability assessments
• Taxes and other governmental charges
• Movable furniture, computer equipment, phone systems
• Maintenance and replacement
Soft Costs – For the Client, Developer or Investor in Real Estate
It's important to remember that choosing partners that contribute to soft costs wisely can save
thousands of dollars in overall project costs down the road. For example, partnering with an effective
design team may help drive a more efficient building design and ultimately lower project costs. Clients
must make sure that they have strong legal, financial, and insurance partners as well to keep soft cost
fees in check and your best interests in mind
Soft Costs – For the Contractor
Soft costs, also known as "overhead" expenses, are intangible costs not directly tied to the physical
construction of a project, such as planning permits and legal fees. The scope of your project, local
regulations, and loan interest rates can all influence your project’s soft costs.
Soft costs are usually managed separately from hard costs and are spread out over the entire
construction timeline, sometimes even continuing beyond the construction phase. This can make them
more difficult to predict and estimate compared to hard costs.

The following are all examples of soft costs in construction:

• Design fees
• Legal and accounting fees
• Land costs and/or surveying
• Marketing expenses promoting new building
• Financing costs and interest payments
• Security system contract fees
• Environmental and sustainability assessments
• Taxes and other governmental charges
• Movable furniture, computer equipment, phone systems
Hard costs and Soft costs in construction
Main differences between Soft and Hard Costs for the client
1. Hard costs are direct expenses that are essential to the physical construction process, while soft
costs are indirect expenses that are not directly related to the physical construction process.

2. Hard costs typically include materials, labor, equipment, and other expenses related to the
construction of the building or structure.

3. Soft costs typically include expenses related to design, permits, legal fees, insurance, financing,
and other indirect costs that are necessary to complete the project.

4. Hard costs are typically easier to estimate and are more tangible, while soft costs can be more
difficult to estimate and may vary depending on the project complexity.

5. Hard costs typically make up the majority of the project budget, while soft costs generally make
up a smaller portion of the project budget.

6. Hard costs are typically paid out during the construction process, while soft costs are spread out
throughout the project timeline and may continue beyond the construction phase
Costs versus Time savings
Once we know the costs by work section from the BoQ and BCE, before starting onsite, we need to
know the costs and income by month, together with the forecasted dates by job, package or activity
For the developer, there are only costs which need to be financed
For the Contractor, each activity means construction costs but completing work sections mean
income
In the most advanced countries, the biggest worry is about the timing rather than the costs. Timing
goes together with document control and follow up, reviews, and changes in quality.

Work sections however are simplified and broken down into their general nature: labour, materials,
equipment and taxes. The work units costs are taken from previous experience or specialised
databases.
Time takes priority because the penalties and indirect and soft costs increase derived from delays are
so important that take priority over any other concern of overcosts (surcharges)

The optimum timing

For the designer, the indirect costs are variable: they grow proportionally to the BCE
For the contractor, they are constant and grow with the extension of the duration of the project
Direct costs, generally rise together with the construction pace, such as those related with labour, who
can work faster through incentives or bonuses
The question is: is there an optimum timing to be achieved, given that direct and indirect costs work
opposite against the clock?
Contractors try to find the critical path to optimise speed of the most profitable activities but only
those which can have a direct impact to be able to shorten the whole program and the corresponding
indirect costs
The cost structure
To evaluate the overall costs to the contractor, and
therefore what is the price a contractor can offer for a
given job, the following need to be considered:

1. “direct” and “indirect” construction costs

2. Its “proportional” costs
3. Its “structural” cost
4. Contractor’s profit margin (5-6% of BCE usually in
Spain)

•Proportional and structural, are part of a more complex contractor’s

accounting terms, but estimated by the architect in % of the overall
construction estimate, (resulting from the BoQ and the market prices for work
sections)
“direct” and “indirect” construction costs

Direct costs
Also called direct production or execution costs, they are directly
associated expenses to the execution of the work and are immediately
related to production. The direct cost Includes materials, and direct
production.

The construction companies must know the prices of all these elements
to the time to deliver a work offer.
“direct” and “indirect”
construction costs
Indirect costs in construction refer to
expenses that, while not directly tied
to a specific building or structure, are
essential for the overall execution of a
project. While these are often
overlooked, they are necessary to
complete the job. Understanding
indirect costs is key for accurate project
budgeting, strategic bidding, and
maintaining project profitability.
“direct” and
“indirect”
construction costs
To understand indirect costs,
it's helpful to first understand
direct costs. Direct
construction costs are directly
tied to a specific project, such
as materials and onsite labor.
In contrast, indirect costs are
those that support the
project but aren't linked to
any specific construction
activity.
To make the difference
between the two clear, here is
a chart to help compare and
contrast direct and indirect
costs:
Types of Indirect Costs
Knowing the types of indirect costs is key to organizing and accounting for them. Here are a
few of the most common indirect costs found in the construction business:

1-Overhead Costs
These are costs not tied to a specific job but are essential for business operations.
Examples include rent for office space, utilities, office supplies or storage for equipment.

2-General and Administrative (G&A) costs

These costs encompass the day-to-day operations of running a construction business.
They include salaries of non-project staff, including operations and marketing personnel,
accounting services, and other administrative expenses. While G&A costs for a firm usually
remain relatively steady, they can fluctuate depending on the size and organizational
structure of the company.

3-Tools and Equipment

The tools used in construction projects — especially those that are reusable across
different projects —are considered indirect costs. While a specific excavator might be a
direct cost to a particular project, smaller tools used across multiple projects, like hammers
or drills, are considered indirect costs. Similarly, vehicles that are used across different job
sites, along with their maintenance and fuel, also contribute to indirect expenses.
Types of Indirect Costs
4- Project-specific Indirect Costs
Also referred to as general conditions, these are expenses that, while not directly tied
to specific construction tasks, are incurred due to the unique conditions or
requirements of a particular project. Unlike general overhead expenses, these costs
are specific to an individual project and may vary from project to project. Some
examples include:

•Salaries, wages, and benefits for on-site personnel including project manager, safety
manager, superintendents, etc.
•Trailers or temporary jobsite office space
•Temporary utilities required for the project
•Personal protective equipment (PPE)
•Site maintenance costs including waste disposal, daily cleanup etc.
•Labor Related
•In addition to wages for management personnel, this encompasses costs associated
with providing health insurance, retirement contributions, workers' compensation, and
other benefits for these staff.
5- Insurance and Bonding
Costs that provide financial safeguards against potential project challenges and
unexpected events. Insurance can encompass general liability, builder’s risk, professional
liability, worker’s compensation, and excess liability. Common types of bonds include bid,
performance, payment and maintenance bonds.

6-Site-specific
Costs that arise due to unique project conditions or requirements and can include
everything from site security to specialized utility setups.

7-Regulatory Compliance
Expenses that are incurred to ensure that all construction activities adhere to local, state,
and federal regulations, including permit fees, inspection costs, and expenses related to
environmental, health or safety standards.
Indirect Costs vs. Soft Costs
In construction, both indirect and soft costs denote expenses that aren't directly tied to
the physical construction activities. However, they do differ in subtle ways.

Soft Costs
Soft costs are expenses that are not directly tied to the labor, materials, and equipment
that go into building the structure. They are typically intangible and administrative in
nature, often incurred before the construction begins or after it concludes. For
example, common soft costs on a project include architectural and design fees,
permitting fees, and land acquisition costs.
Indirect Costs
Indirect costs, on the other hand, are more closely tied to on-site construction activities
but not to the actual materials or labor. These often relate more to supporting the
construction process onsite. Some common examples include temporary site facilities
and utilities as well as tools and equipment rentals.
Furthermore, soft costs often involve third parties like architects, financiers, and legal
consultants, whereas indirect costs are more intrinsic to the contractor's day-to-day
site functions.

Understanding the difference is crucial for budgeting, planning, and managing a

construction project. Proper accounting and allocation of both types of costs ensure the
project's financial viability and success.
Proportional Costs
They are a Soft Cost to the contractor
This concept covers financial expenses, taxes and fees, guarantees, etc. The value of this
data (usually being between 3-6% of BCE) depends on the company's circumstance
(dimension of the company, Agreements with financial entities, payment to suppliers ...)
and of the size of the works to be built.

It is a percentage that is applied to the sums of the BCE (to the “direct and indirect
costs”).
Structure cost
Like the previous cost, these
are soft Costs,
a percentage that applies to
the sum of direct costs and
indirect, on the other hand, it
is a fixed fact that establishes
the management of the
company. They include
expenses such as the salaries
of managers and
administrative, business cars,
mortgage, rent payments of
Company offices.
Likewise, its value vary for
each company. All these costs + the profit margin that the
contractor will determine for himself, build
the bidding price (total oferta on the table)