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Lesson 04 - Overhead and Contingencies

This document discusses overhead and contingencies in construction estimating. It defines different types of overhead costs including home office overhead (indirect costs like rent, salaries, insurance), job overhead (costs directly related to a project like temporary facilities and site supervision), and contingencies (unexpected costs). It provides examples of specific cost items to include under each overhead category and checklists to help estimate these costs for a project.

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Joenem Abenoja
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213 views28 pages

Lesson 04 - Overhead and Contingencies

This document discusses overhead and contingencies in construction estimating. It defines different types of overhead costs including home office overhead (indirect costs like rent, salaries, insurance), job overhead (costs directly related to a project like temporary facilities and site supervision), and contingencies (unexpected costs). It provides examples of specific cost items to include under each overhead category and checklists to help estimate these costs for a project.

Uploaded by

Joenem Abenoja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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LESSON 04

OVERHEAD AND
CONTINGENCIES
ENGR. RAMIL B. VINCULADO, JR.
TOPICS

• OVERHEAD
• HOME OFFICE OVERHEAD
• JOB OVERHEAD
• CONTINGENCIES
• CHECKLIST
OVERHEAD
HOME OFFICE OVERHEAD
• ALSO KNOWN AS “GENERAL OVERHEAD” OR
“INDIRECT OVERHEAD” COSTS
• ARE COSTS THAT ARE NOT READILY
CHARGEABLE TO ONE PARTICULAR PROJECT
• THESE COSTS ARE FIXED EXPENSES THAT MUST BE
PAID BY THE CONTRACTOR AND ARE THE COSTS
OF STAYING IN BUSINESS.
HOME OFFICE OVERHEAD
(ITEMS)

• OFFICE - RENT (IF OWNED, THE COST PLUS


RETURN ON INVESTMENT), ELECTRICITY, HEAT,
WATER, OFFICE SUPPLIES, POSTAGE, INSURANCE
(FIRE, THEFT, LIABILITY), TAXES (PROPERTY),
TELEPHONE, OFFICE MACHINES, AND
FURNISHINGS
HOME OFFICE OVERHEAD
(ITEMS)

• SALARIES - OFFICE EMPLOYEES SUCH AS


EXECUTIVES, ACCOUNTANTS, ESTIMATORS,
PURCHASING AGENTS, BOOKKEEPERS, AND
SECRETARIES
HOME OFFICE OVERHEAD
(ITEMS)

• MISCELLANEOUS - ADVERTISING, LITERATURE


(MAGAZINES, BOOKS FOR LIBRARY), LEGAL FEES
(NOT APPLICABLE TO ONE PARTICULAR PROJECT),
PROFESSIONAL SERVICES (ARCHITECTS,
ENGINEERS, CPAS) NOT BILLABLE TO A JOB,
DONATIONS, TRAVEL (INCLUDING COMPANY
VEHICLES NOT CHARGED TO JOBS), AND CLUB
AND ASSOCIATION DUES
HOME OFFICE OVERHEAD
(ITEMS)

• DEPRECIATION - EXPENDITURES ON OFFICE


EQUIPMENT, CALCULATORS, COMPUTERS, AND
ANY OTHER EQUIPMENT NOT BILLED TO A JOB.
ESTIMATED HOME OFFICE COST
FOR ONE YEAR
(EXAMPLE)
JOB OVERHEAD
• ALSO REFERRED TO AS GENERAL CONDITIONS,
DIRECT OVERHEAD, OR INDIRECT FIELD COSTS
• COMPRISES ALL COSTS THAT CAN BE READILY
CHARGED TO A SPECIFIC PROJECT BUT NOT TO
A SPECIFIC ITEM OF WORK ON THAT PROJECT
JOB OVERHEAD
(ITEMS)

• SALARIES - INCLUDE THOSE PAID TO THE


PROJECT SUPERINTENDENT, ASSISTANT
SUPERINTENDENT, TIMEKEEPER, MATERIAL CLERK,
ALL FOREMEN REQUIRED, AND SECURITY
PERSONNEL IF NEEDED.
- THESE COSTS MUST ALSO INCLUDE
VEHICLE, MOBILE PHONE, TRAVEL, AND JOB-
RELATED LIVING EXPENSES FOR THESE PEOPLE.
JOB OVERHEAD
(ITEMS)

• TEMPORARY OFFICE - SHOULD ALSO INCLUDE


OFFICE EXPENSES SUCH AS ELECTRICITY, GAS,
HEAT, WATER, TELEPHONE, AND OFFICE
EQUIPMENT.
JOB OVERHEAD
(ITEMS)

• TEMPORARY BLDGS., BARRICADES, ENCLOSURES


- INCLUDES ALL TOOL SHEDS, WORKSHOPS, AND
MATERIAL STORAGE SPACES. THE COST OF
BUILDING AND MAINTAINING BARRICADES AND
PROVIDING SIGNAL LIGHTS IN CONJUNCTION
WITH THE BARRICADES MUST ALSO BE INCLUDED.
NECESSARY ENCLOSURES INCLUDE FENCES,
TEMPORARY DOORS AND WINDOWS, RAMPS,
PLATFORMS, AND PROTECTION OVER EQUIPMENT.
JOB OVERHEAD
(ITEMS)

• TEMPORARY UTILITIES- THE COSTS OF TEMPORARY


WATER, LIGHT, POWER, AND HEAT MUST ALSO BE
INCLUDED.
• SANITARY FACILITIES – PROVISION OF RENTED
TOILETS FOR WORKERS.
• DRINKING WATER - THE COST OF PROVIDING
DRINKING WATER IN THE TEMPORARY OFFICE AND
THROUGHOUT THE PROJECT MUST BE INCLUDED.
KEEP IN MIND THAT THE ESTIMATED COST MUST
INCLUDE THE CONTAINERS, CUPS, AND SOMEONE TO
SERVICE THEM.
JOB OVERHEAD
(ITEMS)

• PHOTOGRAPHS
• SURVEYS
• CLEANUP
• WINTER CONSTRUCTION
• PROTECTION OF PROPERTY
CONTINGENCIES
CHECKLIST
CHECKLIST
(UNDISTRIBUTED LABOR)
• JOB SUPERINTENDENT • SUBMITTAL
• ASST. SUPERINTENDENT COORDINATION
• ENGINEERS • SECRETARIES

• TIMEKEEPERS
• MATERIAL CLERKS
• SECURITY PERSONNEL
• PROJECT MEETINGS
CHECKLIST
(UNDISTRIBUTED LABOR)

TO ESTIMATE COST
*LABOR:
NO. OF WEEKS X WEEKLY RATE
CHECKLIST
(TEMPORARY BLDGS., ENCLOSURES & FACILITIES)

• TEMPORARY FENCES • TEMPORARY


• TEMPORARY SHEDS PARTITIONS

• STOREROOMS • TEMPORARY CLOSURES


FOR DOORS AND
• STORAGE AND
WINDOWS
HANDLING
• FIRST AID
• TEMPORARY
ENCLOSURES • CONSTRUCTION ELEV.,
HOISTS, ETC.
• LADDERS AND STAIRS
• CONTROL SYSTEMS
CHECKLIST
(TEMPORARY BLDGS., ENCLOSURES & FACILITIES)

TO ESTIMATE COST
* LABOR:
QUANTITY REQ. X PROD. RATE
* MATERIAL:
QUANTITY REQ. X UNIT COST
CHECKLIST
(TEMPORARY OFFICE)
• TEMPORARY JOB • COMPUTER
OFFICE • STATIONERY
• TEMPORARY OFFICE • PROJECT SIGN AND
FOR ARCHITECT/ ASSOCIATED SIGNAGE
ENGINEERS
• TELEPHONE
• HEAT
• LIGHTS AND POWER
CHECKLIST
(TEMPORARY OFFICE)
TO ESTIMATE COST
* LABOR:
TYPICALLY NONE, EXCEPT FOR OFFICE
SETUP
* MATERIAL:
DURATION REQUIRED AT JOBSITE
X MONTHLY COST
CHECKLIST
(BARRICADES AND SIGNAL LIGHTS)

• BUILDING AND MAINTAINING BARRICADES


• COST OF MAINTAINING SIGNAL LIGHTS
CHECKLIST
(BARRICADES AND SIGNAL LIGHTS)
TO ESTIMATE COST
* LABOR:
QUANTITY OF MAT. X PROD. RATE
* MATERIAL:
QUANTITY OF MAT. X UNIT PRICE
CHECKLIST
(TEMPORARY UTILITIES)

• TEMPORARY TOILETS
• TEMPORARY WATER
• TEMPORARY LIGHT AND POWER
• TEMPORARY HEAT
CHECKLIST

• REPAIRS AND • LABOR BURDEN AND


PROTECTION TAXES
• RELOCATING UTILITIES • BONDS AND
• CLEANING INSURANCE

• PERMITS • MISCELLANEOUS
EQUIPMENT & SERVICES
• PROFESSIONAL
SERVICES
THE END ……

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