MODULE 3: SELECTION OF A CIVIL ENGINEER AND TOTAL PROJECT COST

> The selection of the Civil Engineer

- Basis for selection
- These are the factors considered in the selection process
● The professional and ethical reputation of the civil engineer and his staffed are
determined by inquiries to previous clients and other references.
● Responsible civil engineers and its employees must be registered professional
civil engineers.
● Civil engineers should have demonstrated qualifications and expertise,
performing services required for the project.
● Civil engineers should be able to assign qualified engineering staff who will be in
charge of the project and will be able to complete the required services in the
time allotted.
● The civil engineer should have the necessary financial and business resources to
accomplish the assignment and provide continuing services.

~~
Note that the selection procedures described in this manual applied to projects of the
private. sector. For government projects EO 164 and PD 1594 is amended applied to
procurement, consulting services, and selection of contractors for construction,
respectively.

> Clients selection committee

- At least three (3) individuals or more
- At least one (1) member is a professional engineer
- For public projects, the clients must choose individuals who demonstrate objectivity
~~
Committee responsible for making recommendations after making appropriate
investigations, interviews, and inquiries. The final selection of civil engineers is based
upon the selection of the committees on the following recommendations: at least 3
individuals or more, at least one member is a professional engineer. The appropriate
discipline should be fully familiar with the civil engineering practices. For public projects,
the clients must choose individuals who demonstrate objectivity to avoid the appearance
of conflict of interests in the selection of the civil engineer.

> Qualification - based selection (QBS)

- Invitation or by Public Notice
● Request for qualifications ( RFQ)
● Request for proposals ( RFP)
- Prepare a budget for the staff time and costs
- Statements of qualification evaluation
- Invite the civil engineers or firms with the selection committee for interviews and
discussions
 - Checking with recent clients the quality of performance
- List in order of preference
- Invitation to the best qualified
- Satisfactory agreement is not reached / Agreement has been reached on scope

~~
The selection process is based on qualification and resources such as knowledge, skill,
experience, performance quality, and cost effectiveness that is best suited to complete
the project successfully. These are the steps in QBS Procedure:

● Invitation or by Public Notice

- Request for Qualifications, RFQ- Are requests for qualifications used to ascertain
the general qualifications in the selected areas of expertise.
- Request for Proposals, RFP - On the other hand, RFP request proposes to seek
civil engineers for creating a short list in selecting a civil engineer for a specific
project

● Prepare budget for the staff time and costs

- next is to prepare a budget for the staff time and costs, but can be expected from
expected civil engineer prior from receiving the RFQ and RFP

● Statements of qualification evaluation

- next to evaluate the statements of qualifications received

● Invite the civil engineers or firms with the selection committee for interviews and
discussions
- next is to write a letter to each civil engineer, then invite civil engineers or firms
with the selection committee for interviews and discussions
● Checking with recent clients the quality of performance
- next is to check with recent clients of civil engineer or firm to determine the
quality of their performance
● List in order of preference
- then list the civil engineers or firms in order of preference then invite the civil
engineers who are best qualified, followed by the compensation to the civil
engineer
● Satisfactory agreement is not reached/agreements has been reached in scope
- If a satisfactory agreement has been reached with the civil engineer or firm the
negotiation should be terminated and the civil engineer or firm must be notified in
writing of the defect. Similar negotiations should be held on second and so on if
no accord is reached. If an agreement has been reached on spoken schedule
and compensation, the client and selected civil engineer should formalize the
agreement in written contract.

> Level of effort contracts

 - Bidding (e.g. company A and company B)
- Two envelope system
● Technical proposal
● Price proposal

~~
● A level of effort type of contract for engineering services is a contract procedure used to
supplement the client staff, either by providing an extension to existing disciplines and
capabilities already on board or by adding special disciplines not available for client staff.
● Invitational bidding process is a process of bidding used more on privately funded
projects where only preselected contractor are asked to provide bids on the project. On
the other hand, competitive bidding is for publicly financed projects, construction
contractors, qualified contractors are invited to bid on a competitive basis. Often the
contract is awarded to the contractor who submits the lower bid. Since QBS is
recognized and is the preferred procurement of professional services, selection of civil
engineers and related service professionals including consultants from self-construction
projects should result from competition based on the qualifications and resources best
suited to complete the project. The following are some reasons why bidding for civil
engineers' services often produces satisfactory results for clients. Bidding does not
recognize professional judgement, resulting service performance is likely to be tailored to
fit the minimum requirements of the bid documents and not necessarily suit the client's
needs and expectations. In depth studies and analysis by the consulting civil engineers
are not likely to be performed. Consulting civil engineers' ability to be flexible and
creative in meeting the client's requirement is severely limited. The engineering designs
are likely to be minimal in completeness where details are left to the contractor
● Next is the two-envelope system. This system involves the submission of a technical
proposal in one envelope and a price proposal on a second envelope. The selection
process in effect is the underlined in the QBS and the client evaluates the technical
proposal and select the best qualified civil engineers and uses the second envelope for
negotiation. The second envelope of other unsuccessful proposals are returned
unopened. If both envelopes of all proposers are opened, a bidding process is initiated
with intended disadvantages. If this type of selection is not recommended, it is viewed as
an intended disadvantage. The QBS accepts that the added costs and prepare a
comprehensive scope and discourages civil engineers or firms

> Charges for Engineering services

- Reimbursable
- Hourly billing rates + reimbursables
- Per diem
- Cost plus fixed fee
- Fixed price
- Percentage

~~
 ● Charges for civil engineering services are usually computed using one of six methods
such as salary cost times multiplier plus direct non-salary expense or reimbursable,
hourly billing rates + reimbursables, per diem, cost plus fixed fee, fixed fee and
percentage of construction cost or percentage advantage

> Salary cost times multiplier plus direct non- salary expenses
- Salary cost times multiplier method (+)
1. Direct salary times multiplier ( single multiplier to unburdened direct labor costs)
2. Salary cost times multiplier ( two separate multipliers)
3. Direct non- salary expenses (separate item for reimbursement usually with
service charge)

- SALARY COST - direct salaries + employee benefits

- MULTIPLIER COST - factor for overhead plus + a margin contingencies, interest or
invested capital
~~

● The salary cost times multiplier method may be utilized as either a multiplier times salary
cost or a multiplier times direct salary cost.
● First are direct salary times the multiplier or the direct labor times multiplier virtually
applies the single on the direct labor cost like direct salaries without employee benefits.
Single multiplier includes costs associated with the employee benefits, overhead, and a
margin for contingencies, risks, and profit. It is used more frequently due to the simplistic
nature of utilizing a single multiplier.
● Next is the salary cost times multiplier. It is more likely accountable due to the basic
premise of providing two separate multipliers. One multiplier is based upon the definitive
cost like employee benefits and the other multiplier based upon cost which may vary
from project to project. Direct non-salary expenses are a separate item for
reimbursement usually of service charge. The factor is put into salary times multiplier
version are salary cost and multiplier cost. Salary cost is defined as the direct salary plus
the employee benefits and includes the salary for partners or principals, technical
professional, administrative and clerical staff directly. Multiplier cost is applied to salary
cost. It is a factor that compensates the civil engineer for overhead plus the reasonable
margin, contingencies, interest or invested capital interests, or profit. The size of
multiplier may vary with the type of service, the nature, the experience of the civil
engineering firm and geographic area in which office is located. The average multiplier
should be between 2.5 to 3 times the average salary cost. The following are the direct
non-salary expenses: living and traveling expenses of principals and employees,
identifiable communication expenses, expenses for services and equipment's directly
applicable to the project, identifiable drafting supply, stenographic supplies and
reproduction work, and expenses on usual insurances specialized health and safety
programs, and for special clothing for projects with extraordinary risks. For the overhead,
these are: provisions on office expenses like heat, telephone etc. that is not identifiable
on a specific project, taxes, and insurances other than those included in salary cost.
 Library and periodical expenses and other cost of keeping up with the advances in
engineering, executive, administrative, accounting, legal, stenographic, and clerical
salaries. Business development expenses including salary of principals and employees
so engaged. Prohibitions for loss of productive time of technical employees between
assignments and for time of principals and employees on public service assignments,
and cost of acquiring and maintaining computers, development of software, and training
staff when not in direct cost. For the accounting records, the civil engineer who perform
services under salary times cost multiplier agreement must provide the accounting
necessary to segregate and record the appropriate expenditures

> Hourly billing rate

- Salary cost times multiplier method (+)
1. Direct salary times multiplier (single multiplier to unburdened direct labor costs)
2. Salary cost times multiplier ( two separate multipliers)
- (+) Direct expenses
- (+) overhead
- (+) profit

~~
● Hourly billing rate is very similar, like the salary cost times the multiplier method that the
hourly billing includes all the other expense, overhead and profit. Directly hon salary
expenses are separate Item for reimbursement usually with service charge.

> Per diem rate

- Eight (8) hour day
● Per diem rate increases if more than the normal 8 hour day
- Reimbursable
- Legal- type services and short term engagement

~~
● Per diem refers to an eight-hour day. It is suited for expert witness or other legal types of
services and to other short term engagements involving interpersonal services. It should
be based on the complexity, risk and the importance of the services on the civil
engineers professional standing, expertise and previous experience. Moreover, civil
engineer posses reimburse for travel and consistent costs and other out of pocket
expenses when away from the home office. For every engagement, the civil engineer
appears as the expert, his appearance is charged with his own per diem rate. The per
diem rate increases as the engagement requires the civil engineers time regularly for a
period longer than the 8hour per day. Perdie rates can vary widely depending on
employee classification, regional location, and rate of service.

> Cost plus fixed fee

1. Salary costs
2. Overhead cost
 3. Direct non- salary expenses
4. Fixed fee
~~
● The civil engineer is reimbursed for the actual cost of all services and supplies related to
the project including salary cost, overhead costs, direct non-salary expenses and fixed
fee. The cost- plus fixed fee can also be used then the civil engineer is required to start
providing service. For the detailed scope of vertices can be determined. In such cases
the following considerations appl: the general scale and intent of the project should be
fairly well defined even if the whole scope is indeterminate. For example, the number
size and character or building and other essential information should be available.
● The types of service to be performed by the civil engineer should be agreed upon and
fully be said for. The agreement should also provide for appropriate adjustments in the
fixed fee in the event that the physical scopes of the project, time of completion, or level
of offhirts os sered that required material change over those contemplated other than
those e of the negotiation the advantage of the cost plus fix, is that if you eliminate any
of the suspicion of the cost has been allowed of grown in order to increase the civil
engineers fee

> Fixed Price

- Fixed price method of compensation - frequently used for investigations and studies for
basic services on design type project
- Fixed price amount - calculated as the sum of total engineering costs for:
● Salaries
● Overhead and non- salary expenses
● Allowance for contingencies
● Interest on invested capital
● Readiness to serve
● Reasonable amount for profit
- Fixed price compensation - can be computed as an appropriate percentage of estimated
construction costs.
~~

● A fixed price agreement should contain a clearly stated time period during which the
services will be performed and prohibition for adjustment of compensation of the project
is delayed for reasons beyond the civil engineer's control. Moreover, it should have a
prohibition for changes required after the approval of the preliminary design or design
services. Partial payments should be made to the civil engineer after the stated interval,
these payments are usually based on the civil engineers' statement of percentage of
completion date.

> Percentage of construction cost

- The percentage fee shall consider the type, complexity, location and magnitude of
construction cost of the project.
 - It shall not exceed the following percentages of estimated construction cost
● Feasibility studies - three percent (3%)
● Detailed engineering design - six percent (6%)
● Detailed architectural and engineering design - eight percent (8%)
● Construction supervision - ten percent (10%)
~~
● percentage of construction cost is the methods that may be used to determine the
compensation of the engineer for services where principal responsibility is the detail of
design or supervision of facilities to be constructed. Construction cost is defined as the
estimated total cost of constructing of the facility to be covered by the proposed detailed
design by the architect, construction services, excluding the fees and other costs of the
said services, the cost of land and right of way, and legal and administrative expenses.

> Schedule of minimum basic fees

- Government Sector
● Minimum basic monthly salary corresponding to appropriate entry positions
provided by the Civil Service Commision
- Private Sector
● Minimum compensation corresponding to 10% more than the minimum prevailing
wage as monthly salary
- Foreign assisted project
● Should accept compensation that approximates the international standard rates
~~
● When doing work on foreign assisted project or in projects where international
consultants participate, the civil engineer performing the similar or equivalent work
should accept compensation that approximates the international standard rates. Civil
engineers that are regularly employed in the private sector will have a minimum
compensation corresponding to the 10% more than the minimum prevailing wage as
basic monthly salary. Civil engineers employed in the government sector shall have a
minimum basic monthly salary corresponding to appropriate entry positions provided by
the Civil Service Commission. A civil engineer employed in the private sector who signs
and seals civil engineering plans, specifications and other related documents of a certain
project for and in behalf of his employer shall be compensated with a minimum of 10% of
the total professional fee over and develop a basic monthly salary.

> Total project cost

1. Professional engineering cost
2. Construction cost
3. Legal and land cost
4. Owner's cost ( including project administration, staffing, financing, and other overhead
5. Contingency allowance for unknowns
~~
● The probable total capital cost often used to establish budgets for a typical project is
made up of professional engineering cost, construction cost, legal and land costs,
 owners cost including project administration, staffing, financing and other overhead, and
contingency allowance for unknowns.

> Construction Cost

~~
● The estimated total cost constructing the facility is to be covered by proposed detailed
design or the construction supervision services, excluding the fees and other costs of
such services. The cost of land and right of way, and legal administrative expense of the
agency.

> Legal, land, administration, staffing and financial costs

~~
● This cost which includes audits, cost of issuing bonds, land costs, and interest for
borrowed money for construction are part of the probable total project cost.

> Contingency Allowance

- 20% or more
- 10%
- 5%
~~
● It is common practice to add 20% or more to the estimated probable total project cost at
the completion of the strudy and report phase. Reducing this to 10% of the completion of
final design and perhaps to 5% when the construction details become known.
MODULE 4: SCHEDULE OF FEES AND R.A 544: AN ACT TO REGULATE THE PRACTICE
OF CIVIL ENGINEERING IN THE PHILIPPINES

Part A. Minimum Compensation For Civil Engineer as Prime Professional.

- When the Civil Engineer assumes overall coordination including architectural and other
engineering services, the Engineer is a prime professional.
> Group I – Simple structures such as lofts, warehouses, garages, sheds, market buildings,
and comparable projects of one but not more than two stories.
Project Construction Cost Minimum Basic Fees

P10M and less 6%

Over P10M to P20M P600,000 + 5.5% in excess of P10M

Over P20M to P30M P1,150,000+ 4.5% in excess of P20M

Over P30M P1,600,000 + 3.5% in excess of P30M

> Group II – Buildings of 3 stories up to 14 stories, towers, tanks, exhibition buildings,

memorials, industrial buildings, simple bridges, low dams, piers, wharves, bins and silos and
comparable projects.
Project Construction Cost Minimum Basic Fees

P10M and less 7%

Over P10M to P20M P700,000 + 6.5% in excess of P10M

Over P20M to P30M P1,350,000+ 5.5% in excess of P20M

Over P30M P1,900,000 + 4.5% in excess of P30M

> Group III – Buildings with fifteen (15) or more floors, long span and complex bridges, high
dams, major port works, power plants and other complex structures not covered in Groups I and
II.
Project Construction Cost Minimum Basic Fees

P10M and less 8%

Over P10M to P20M P800,000 + 7.5% in excess of P10M

Over P20M to P30M P1,550,000+ 6.5% in excess of P20M

Over P30M P2,200,000 + 5.5% in excess of P30M

If the Civil Engineer is not the prime professional for the above groups but renders basic Civil
Engineering services only, his fee shall be a minimum of 25% of the prime professional
fee.
PART B – Minimum Compensation For Civil Engineer as Professional Not Prime.
- When the Civil Engineer renders basic Engineering Design Services, only his fee shall
be as follows:

> Group IV – Hotels, large apartment buildings, office buildings, shopping centers, store
buildings, resorts, hospitals, and comparable projects.
Project Construction Cost Minimum Basic Fees

P10M and less 1.05 %

Over P10M to P20M P105,000 + 0.975% in excess of P10M

Over P20M to P30M P202,5000+ 0.825% in excess of P20M

Over P30M P285,000 + 0.675% in excess of P30M

> Structures not falling in any group shall be classified into Group III.

> Minimum Compensation for Civil Engineer’s for rendering the following services.
● Professional Fees
1. Value Engineering – 25% of Professional Fee + 25% of savings
2. Expert Witness – P2,000/appearance

> Minimum Compensation for Civil Engineers rendering Academic Services

● Teaching part-time or full time basis
1. BS degree holder P75/hr – P150/hr
2. Master degree holder – P150/hr – P250/hr
3. Doctorate Degree holder – P250/hr – P400/hr
4. Lecturer (PICE-CPD) – P500/hr
5. Conducting tutorial/refresher courses – P500/hr
6. Resource Speaker – P500/hr
7. Writer/Author – P3,000/article

> SCHEDULE OF FEES AND RA 544 REPUBLIC ACT 544 (As amended by R.A. 1582)

- Approved on June 17, 1950

- (As amended by R.A. No. 1582, approved on June 16, 1956)
- Summary
1. Title of the Act and Definition of Terms
2. Board of Examiners for Civil Engineers
3. Examination and Registration
4. Enforcement of Act and Penal Provisions
5. Miscellaneous Provisions
- 29 Sections
> ARTICLE I: TITLE OF THE ACT AND DEFINITION OF TERMS
- SECTION 1: TITLE OF THE ACT "CIVIL ENGINEERING LAW"
- SECTION 2: DEFINITION OF TERMS
A. SERVICES OF CIVIL ENGINEERING
B. CIVIL ENGINEER

> ARTICLE II: BOARD OF EXAMINERS FOR CIVIL ENGINEERS

- SHOULD BE CREATED WITHIN 30 DAYS AFTER ACT APPROVAL
- SECTION 3: COMPOSITION OF BOARD
● Within thirty days after the approval of this Act there shall be created a Board of
Examiners for Civil Engineers, hereinafter referred to as the Board, to be
composed of a chairman and two members who shall be appointed by the
Secretary of Public Works and Communications.
- SECTION 4: POWERS AND DUTIES OF THE BOARD
- SECTION 5: QUALIFICATION OF BOARD MEMBERS
● AT LEAST 30 YEARS OF AGE REGISTERED CE; HAVE PRACTICED CE W/
CERTIFICATE NOT LESS THAN 10 YEARS
- SECTION 6: FEES AND COMPENSATION OF BOARD
● 100 PESOS, EACH APPLICATION FOR EXAMINATION
● 50 PESOS, EACH CERTIFICATE OF REGISTRATION
● 15 PESOS, EACH APPLICANT
- SECTION 7: ANNUAL REPORT
● A DETAILED REPORT OF ACTIVITIES AND PROCEEDINGS COVERED BY
THE FISCAL YEAR

> ARTICLE III. EXAMINATION AND REGISTRATION

- SECTION 8: EXAMINATION REQUIREMENT
● REQUIRED TO PASS A TECHNICAL EXAMINATION
- SECTION 9: HOLDING OF EXAMINATION
- SECTION 10: SUBJECTS OF EXAMINATION
● MATHEMATICS SURVEYING
● TRANSPORTATION ENGINEERING
● HYDRAULICS AND GEOTECHNICAL ENGINEERING
● STRUCTURAL ENGINEERING AND CONSTRUCTION
- SECTION 11: EXECUTIVE OFFICER OF THE BOARD
● COMMISSIONER OF PRC
● SHALL CONDUCT THE EXAMINATIONS OF THE SAID BOARD
- SECTION 12: QUALIFICATION FOR EXAMINATION
● CITIZEN OF THE PHILIPPINES
● GOOD REPUTATION & MORAL CHARACTER
● GRADUATE OF A FOUR- YEAR COURSE IN CIVIL ENGINEERING
● AT LEAST 21 YEARS OLD
- SECTION 13: OATH OF CIVIL ENGINEERS
- SECTION 14: SEAL AND USE OF A SEAL
 - SECTION 15: EXEMPTION FROM REGISTRATION
- SECTION 16: REFUSAL TO ISSUE CERTIFICATE
- SECTION 17: SUSPENSION AND REVOCATION OF CERTIFICATE
● SUSPENSION OR REVOCATION OF THE CERTIFICATE OF REGISTRATION
- SECTION 18: RE-ISSUE AND REPLACEMENT OF CERTIFICATES
- SECTION 19: TRANSITORY PROVISIONS
● CERTIFICATE OF REGISTRATION
● "Any person desiring to practice the profession of civil engineering shall be
required to obtain a certificate of registration."

> ARTICLE IV: ENFORCEMENT OF ACT AND PENAL PROVISION

- SECTION 20: ENFORCEMENT OF THE ACT BY OFFICERS OF THE LAW
● all duly constituted law officers of the national, provincial, city and municipal
governments, or any political subdivisions
- SECTION 21: REGISTRATION REQUIRED
● CERTIFICATE OF REGISTRATION
● "Unless exempt from registration, no person shall practice or offer to practice civil
engineering in the Philippines without having obtained the proper certificate of
registration from the Board for Civil Engineers."
- SECTION 22: PENAL PROVISIONS
● "...upon conviction, be sentenced to a fine of not less than five hundred pesas
nor more than two thousand pesos, or to suffer imprisonment for a period of not
less than six months not more than ane year, or both, in the discretion of the
court."

> ARTICLE V: MISCELLANEOUS PROVISIONS

- SECTION 23: PREPARATION OF PLANS AND SUPERVISION OF CONSTRUCTION
BY REGISTERED CIVIL ENGINEER
● SIGNED AND SEALED BY A REGISTERED CIVIL ENGINEER
- SECTION 24
● The practice of civil engineering is a professional service, admission to which
must be determined upon individual, personal qualifications.
- SECTION 25: RECIPROCITY REQUIREMENTS
- SECTION 26: ROSTER OF CIVIL ENGINEERS
- SECTION 27: REPEAL
● "All laws, parts of laws, orders, ordinances, or regulations in conflict with the
provisions hereof..."
- SECTION 28: CONSTRUCTION OF ACT
● If any part or section of this Act shall be declared unconstitutional, such
declarations shall not invalidate the other provisions hereof.
- SECTION 29: EFFECTIVITY
● This Act shall take effect upon its approval
● Approved, June 17, 1950
● As amended by R.A. No. 1582, approved on June 16, 1956.