Scribd
Upload
334 views14 pages

Charging For Civil Engineering Services

The document discusses six common methods for charging engineering services: 1) Salary cost times multiplier plus direct expenses 2) Hourly billing rates plus expenses 3) Per diem 4) Cost plus fixed fee 5) Fixed price 6) Percentage of construction cost It provides details on salary cost times multiplier method, including factors like salary costs, multipliers, direct non-salary expenses, and overhead costs that are compensated through the multiplier. Hourly, per diem, cost plus fixed fee, and fixed price methods are also briefly described.

Uploaded by

Ultron Prime
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
334 views14 pages

Charging For Civil Engineering Services

The document discusses six common methods for charging engineering services: 1) Salary cost times multiplier plus direct expenses 2) Hourly billing rates plus expenses 3) Per diem 4) Cost plus fixed fee 5) Fixed price 6) Percentage of construction cost It provides details on salary cost times multiplier method, including factors like salary costs, multipliers, direct non-salary expenses, and overhead costs that are compensated through the multiplier. Hourly, per diem, cost plus fixed fee, and fixed price methods are also briefly described.

Uploaded by

Ultron Prime
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 14

GROUP 6

Bermejo, Elma Ericka


Cuizon, Ohlliver
Masula, Marvin
Pindot, John Michael
Turla, Jane Vivien
CHARGING FOR ENGINEERING SERVICES ARE
USUALLY COMPUTED BY 1 OF 6 METHODS
1. Salary cost times multiplier plus direct
plus direct non-salary expense
(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”)
4.2 SALARY COST TIMES MULTIPLIER PLUS
DIRECT PLUS DIRECT NON-SALARY
EXPENSE
 Compensation on the basis of the salary cost times
an agreed multiplier is a frequently used method of
determining charges for engineering services.
 May be utilized as either a multiplier times salary
cost or a multiplier times direct salary cost
 The direct salary times multiplier is very similar to
the salary cost times multiplier with the exception
that it applies a single multiplier to unburdened
direct labor cost, i.e., direct salaries without
employee benefits
THE FOLLOWING FACTOR ARE PERTINENT
TO THE SALARY COST TIMES MULTIPLIER
VERSION OF THIS METHOD:

1. Salary cost - Is defined as the “direct salaries


plus employee benefits”
2. Multiplier- Is which is applied to salary cost
factor that compensates the civil engineer for
overhead plus a reasonable margin for
contingencies, interests or invested capital
readiness to serve, and profit. The average
multiplier should be between 2.5 and 3 times
the average salary cost.
3. Direct non-salary expenses usually incurred in engineering
engagements may include the ff:
A. Living and traveling expenses of principals and employees
when away from the home office on business connected with
the project.
B. Identifiable, communications, expenses, such as long-distance
telephone, facsimile, telegraph, shipping charges, and special
postage charges
C. Expenses for services and equipment directly applicable to the
project such as for specialized technical equipment, special legal
and accounting services, special computer rental and
programming services, computer run time and file storage, CADD
charges, sub consultants and subcontractors commercial printing
and binding and similar services that are not applicable for
inclusion in general overhead.
D. Identifiable drafting supplies, stenographic supplies
and reproduction work (blueprinting, photocopying
and printing ) as distinguished from such supplies and
expenses applicable to several projects
E. Expenses for unusual insurance and specialized
health and safety programs and for special clothing for
projects with extraordinary risks such as toxic and
hazardous waste conditions.
4. Civil Engineers overhead –which comprises a major portion
of compensation generated by the multiplier on salary cost
includes the ff. indirect costs:
A. Provisions for office expenses
B. Taxes and insurance other than those included as salary
cost
C. Library and periodical expenses and other costs of keeping
abreast of advances in engineering, such as attendance at
technical and professional meetings and continuing education
courses.
D. Executive, administrative, accounting legal, stenographic,
and clerical salaries and expenses (other than identifiable
salaries included in salary costs and expenses) plus salaries or
imputed salaries of partners and principals to the extent that
they perform general executive and administrative services as
distinguished from technical or advisory services directly
applicable to particular projets
E. Business development expenses, including
salaries of principals and employees so engaged
F. Provision for loss of productive time of
technical employees between assignments, and
for time of principals and employee on public
service assignments
G. Costs of acquiring and maintaining
computers, development of software and
training staff when not billed as a direct cost
4.3 HOURLY BILLING RATES PLUS
REIMBURSABLE
 This is very similar to the salary cost times
multiplier method in that the hourly billing
rate includes all direct personnel expense,
overhead and profit
 Are used on projects where the scope of
service is not well defined or to simplify-
accounting and record keeping.
4.4 PER DIEM
 Per diem normally refers to an eight-hour day
 Is particularly suited to expert witness or other type
legal-type services and to other short-term
engagements involving intermittent personal
services
 Per diem rates can vary widely, depending on
employee classification, regional location and period
of service.
 Rates for consultation in connection with litigation
and appearances before commissions and courts are
normally higher than the standard rates
4.5 COST PLUS FIXED FEE

 Under a cost plus fixed fee agreement, the CE


is reimbursed for the actual cost of all
services and supplies related to the project,
including:
 Salary costs
 Overhead
 Direct non-salary expenses
 Fixed fee
 The CPFF requires, as a prerequisite to equitable
negotiations, that the client and the CE define an
agree upon the scope of services the CE is to
perform.
 Can also be used when the CE is requited to start
providing service before the detailed scope of
services can be determined. In such cases, the ff.
considerations apply:
1. The general scale and intent of the project should be
fairly well defined, even if the full scope is
indeterminate
2. The type of service to be performed by the CE should
be agree upon and fully set forth.
4.6 FIXED PRICE

 Is frequently used for investigations and


studies and for basic services on design type
projects.
 The fix price can be calculated as the sum
total estimated engineering costs for salaries.
THANK YOU!!!

You might also like