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    Lesson 6 - CHARGING-FOR-CIVIL-ENGINEERING-SERVICES-pt.2

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    Li Re
    This document outlines various methods for charging fees for civil engineering services, including cost-plus contracts, fixed price contracts, and percentage of construction cost methods. It provides pros and cons of different contract types from the perspective of clients and contractors. The document also establishes minimum fee schedules for civil engineers based on the type and cost of construction projects. Fees are specified as percentages of construction costs that increase with the cost of the project. Minimum compensation rates are also provided for other engineering services like expert testimony, academic services, and more.

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    Lesson 6 - CHARGING-FOR-CIVIL-ENGINEERING-SERVICES-pt.2

    Uploaded by

    Li Re
    155 views13 pages
    This document outlines various methods for charging fees for civil engineering services, including cost-plus contracts, fixed price contracts, and percentage of construction cost methods. It provides pros and cons of different contract types from the perspective of clients and contractors. The document also establishes minimum fee schedules for civil engineers based on the type and cost of construction projects. Fees are specified as percentages of construction costs that increase with the cost of the project. Minimum compensation rates are also provided for other engineering services like expert testimony, academic services, and more.

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    This document outlines various methods for charging fees for civil engineering services, including cost-plus contracts, fixed price contracts, and percentage of construction cost methods. It provides pros and cons of different contract types from the perspective of clients and contractors. The document also establishes minimum fee schedules for civil engineers based on the type and cost of construction projects. Fees are specified as percentages of construction costs that increase with the cost of the project. Minimum compensation rates are also provided for other engineering services like expert testimony, academic services, and more.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    155 views13 pages

    Lesson 6 - CHARGING-FOR-CIVIL-ENGINEERING-SERVICES-pt.2

    Uploaded by

    Li Re
    This document outlines various methods for charging fees for civil engineering services, including cost-plus contracts, fixed price contracts, and percentage of construction cost methods. It provides pros and cons of different contract types from the perspective of clients and contractors. The document also establishes minimum fee schedules for civil engineers based on the type and cost of construction projects. Fees are specified as percentages of construction costs that increase with the cost of the project. Minimum compensation rates are also provided for other engineering services like expert testimony, academic services, and more.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    CHARGING FOR

    CIVIL
    ENGINEERING
    SERVICES
    (PT.2)
    TCIE 3-1
    GROUP 7:
    GOZON, ALEHA ANN O.
    MACABALANG, MARY JOMELANE P.
    MANZANO, JAKE E.
    COST-PLUS CONTRACT
    ▪ Also known as Cost-Reimbursement Contract
    ▪ A type of construction contract where you get paid for all of your
    construction related expenses, plus a specified amount of profit.

    COST-PLUS FIXED FEE (CPFF)


    A subtype of Cost-Plus Contract. Under a cost plus fixed fee agreement, the
    Civil Engineer/Contractor is reimbursed for different types of costs that come
    into play:
    ▪ Direct Costs (Actual Cost)
    ▪ Indirect Costs (Overhead Cost)
    ▪ Profit (Fixed Fee)
    The difference between a Cost-Plus and Cost-Plus Fixed Fee Contracts
    relies heavily on the third type of cost: Profit.
    Cost-Plus Fixed Fee Contracts are generally more beneficial to the client
    than they are to the contractor

    BENEFITS DRAWBACKS
    For clients: For contractors:
    • Budget Friendly • Documentation requirements
    • Option of Guaranteed Maximum • Coverage of indirect costs
    Price • Cashflow
    For contractors:
    • No need to estimated specific costs
    • Even if there is a budget underrun,
    the contractor will still make the
    same amount of money.
    FIXED PRICE
    ▪ The fixed price can be calculated as the sum total of estimated engineering
    costs for salaries, overhead and non-salary expenses, an allowance for
    contingencies, interest on invested capital, readiness to serve, and a
    reasonable amount for profit.
    ▪ Fixed price compensation for basic services on certain design-type projects
    can also be computed as an appropriate percentage of estimated construction
    cost.
    FIXED PRICE
    Pros:

    1. It can be easier to budget what is needed since there is a fixed number that has been decided on.

    2. No extra costs and if the fixed cost does need to be changed, then it must be done so mutually and detailed in
    separate legal documents.

    3. The owner may not supervise as frequently as with a cost-plus contract.

    Cons:

    1. It’s on the contractor to complete the project within budget and within the time frame that has been set –
    or else they’ll have to cover extra costs themselves.

    2. Changes to the original plan may not go down well with the owner.

    3. Cheaper materials may be used to stay within budget.


    PERCENTAGE OF CONSTRUCTION
    COST
    ▪ The Percentage of construction cost method 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.
    ▪ Construction cost is defined as 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.
    SCHEDULE OF MINIMUM BASIC FEES
    Principles to observe:
    1. When doing work on foreign assisted projects, or in projects where international; consultants
    participate, the Civil Engineer performing similar or equivalent work, should accept
    compensation that approximates the international standard rates.
    2. Civil Engineers regularly employed in the private sector shall have a minimum compensation
    corresponding to 10% more than the minimum wage prevailing in the region 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.
    3. A Civil Engineer employed in the private sector who signs and seals the Civil Engineering plans,
    specifications and other related documents of a certain project for and in behalf of his
    employers shall be compensated with a minimum of 10% of the professional fee for the
    project, aver and above the basic monthly salary.
    MINIMUM COMPENSATION FOR CIVIL
    ENGINEER AS A PRIME PROFESSIONAL.
    Group I-Simple Structures, one story buildings,
    warehouses, market buildings and comparable projects

    Project Construction Cost Minimum Basic Fees

     P10 Million and less 6%

     Over P10 Million to P20 Million P600,000 plus 5.5%

     Over P20 Million to P30 Million P1,150,000 plus 4.5% of excess of P20 Million

     Over P30 Million P1, 600, 000 plus 3.5% of excess of P30
    Million
    MINIMUM COMPENSATION FOR CIVIL
    ENGINEER AS A PRIME PROFESSIONAL.
    Group II- Buildings of 3 to 14 floors, towers, tanks,
    industrial buildings, piers, and comparable projects.

    Project Construction Cost Minimum Basic Fees

     P10 Million and less 7%

     Over P10 Million to P20 Million P200,000 plus 6.5% of excess of P10 Million

     Over P20 Million to P30 Million P1,350,000 plus 5.5% of excess of P20 Million

     Over P30 Million P1, 900, 000 plus 4.5% of excess of P30
    Million
    Group III- Buildings of 15 or more floors, long span and
    complex bridges, high dams, port works, power plants.

    Project Construction Cost Professional Fee

     P10 Million and less 8%

     Over P10 Million to P20 Million P800,000 plus 7.5% of excess of P10 Million

     Over P20 Million to P30 Million P1,550,000 plus 6.5% of excess of P20 Million

     Over P30 Million P2, 200, 000 plus 5.5% of excess of P30
    Million

    If the Civil Engineer is not the prime professional but renders basic civil engineering
    services only, his fee shall be a minimum of 25% of the prime professional fee.
    MINIMUM COMPENSATION FOR CIVIL
    ENGINEER AS PROFESSIONAL NOT PRIME.
    Group IV-Hotels, large apartment buildings, shopping
    centers, resorts, hospitals, and comparable projects.

    Project Construction Cost Engineer’s Fee

     P10 Million and less 1.05%

     Over P10 Million to P20 Million P105,000 plus 0.975% of excess of P10 Million

     Over P20 Million to P30 Million P202,500 plus 0.825% of excess of P20 Million

     Over P30 Million P285, 000 plus 0.675% of excess of P30


    Million
    MINIMUM COMPENSATION FOR CIVIL
    ENGINEER’S FOR RENDERING THE
    FOLLOWING SERVICES
    1. Value Engineering 25% of Professional Fee+ 25% of savings
    2. Expert Witness P2000 / appearance
    3. Academic Services
    a) BS degree holder P75/hr-P150/hr
    b) Master degree holder P150/hr-P250/hr
    c) Doctorate degree holder P250/hr-P400/hr
    d) Lecturer (PICE-CPD) P500/hr
    e) Conducting Tutorial/refresher courses P500/hr
    f) Resource Speaker P500/hr
    g) Writer/Author P3000/article

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