Module 5 compressed

• Charges for engineering services may be based on


  • "VALUE PRICING" - premium rate based on the civil engineer's unique qualifications or the extenuating circumstances
• Hourly Billing Rate


  • Includes all direct personnel expenses, overhead, and profit
• A PROVISION IN THE AGREEMENT should state that payments will be made to the CE during the progress of the services, based on monthly invoices, and within a reasonable time after billing
• Direct Non-salary Expenses include

  • Living and travelling expenses
  • Identifiable communication expenses
  • Expenses for services and equipment directly applicable to the project
  • Identifiable drafting supplies, stenographic supplies and reproduction work
  • Expenses for unusual insurance, specialized health and safety programs and special clothing for projects with extraordinary risks
• COST PLUS FIXED FEE
• Overhead includes


  • Provisions for furniture, rentals, equipment and instruments, expenses and supplies not identifiable to a specific project
  • Taxes and insurance other than those included as a salary cost
  • Library and periodical expenses and other costs of keeping abreast of advances in engineering
  • Executives, administrative, accounting, legal, stenographic, and clerical salaries and expenses plus salaries or imputed salaries of partners and principals
  • Business development expenses, including the salaries of the principals and employees so engaged
  • Provisions for the loss of productive time and time on public service assignments
  • Costs of acquiring and maintaining computers, developing softwares, and training staff not billed as direct costs
• Per Diem


  • "eight-hour day"
  • Suited to expert witness or other legal-type services, short-term engagement involving intermittent personal services
  • Should be based on the complexity, risk, and importance of the services and on CE's standing, expertise and breadth of experience
  • Requires the CE to work regularly periods longer than the normal eight-hour day
  • Can vary widely, depending on employee classification, regional location, and period of service
  • Rates for consultation in connection with litigation and appearance before commissions and courts are normally higher than the standard rates
• Accounting Records


  • CE must provide the accounting necessary to segregate and record the appropriate expenditures (Detailed hourly time records)
• Determination of charges for services


  1. May be affected by the contractor's performance

  2. CE may demonstrate that his/her proposal will make the project easier, faster, safer, or less expensive to achieve the client's objective
• CE is reimbursed for the actual costs of all services and supplies related to the project including salary costs, overhead, direct nses and fixed fee (an amount to compensate the CE for contingencies, interest on invested capital, readiness to service and profit
• Method of determining charges for engineering services

  SALARY COST TIMES MULTIPLIER PLUS DIRECT NON-SALARY EXPENSE
• COST PLUS FIXED FEE

  1. CE is reimbursed for the actual costs of all services and supplies related to the project including salary costs, overhead, direct expenses and fixed fee (an amount to compensate the CE for contingencies, interest on invested capital, readiness to service and profit)

  2. Considerations: (1) The general scale and intent of the project should be fairly well defined (2) The types of services to be performed by the Civil Engineer should be agreed upon and fully set forth
• PART B - Minimum Compensation For Civil Engineer as Professional Not Prime

  1. Group IV – Hotels, large apartment buildings, office buildings, shopping centers, store buildings, resorts, hospitals, and comparable projects

  2. Structures not falling in any group shall be classified into Group III
• PART A - Minimum Compensation for Civil Engineer as Prime Professional


  1. Group I – Simple structures such as lofts, warehouses, garages, sheds, market buildings, and comparable projects of one but not more than two stories

  2. Group II – Buildings of 3 stories up to 14 stories, towers, tanks, exhibition buildings, memorials, industrial buildings, simple bridges, low dams, piers, wharves, bins, silos and comparable projects

  3. Group III – Buildings with fifteen (15) or more floors, long spans and complex bridges, high dams, major port works, power plants, and other complex structures not covered in Groups I and II
• SCHEDULE OF MINIMUM BASIC FEES

  1. PICE should accept compensation that approximated the international standard rates

  2. Shall have a minimum compensation corresponding to 10% more than the minimum wage prevailing in the region as their basic monthly salary

  3. A CE employed in the private sector who signs and seals the Civil Engineers plans, specifications, and other related documents
• FIXED PRICE


  1. Used for investigations and studies and for basic services on design type projects

  2. Calculated as the sum total of estimated engineering costs for salaries, overhead and expenses, an allowance for contingencies, interest on invested capital, readiness to serve, and a reasonable amount for profit
• Litigation and appearance before commissions and courts are normally higher than the standard rates
• PERCENTAGE OF CONSTRUCTION COST

  1. Seldom used raw

  2. May be used to determine the compensation of the engineer for services where the principal responsibility is the detailed design or construction supervision of facilities to be constructed

  3. Construction Cost: 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

  4. The percentage fee shall consider the type, complexity, location, and magnitude of the construction cost of the project and shall not exceed the following percentage of the estimated construction cost: a. Feasibility studies – three percent (3%); b. Detailed engineering design – six percent (6%); c. Detailed architectural and engineering design – eight percent (8%); and d. Construction supervision – ten percent (10%)