Charges of Civil Engineering Services

CHARGES OF CIVIL ENGINEERING SERVICES

CHARGES FOR CIVIL ENGINEERING SERVICES ARE USUALLY COMPUTED USING ONE OF THE SIX METHODS;

Salary cost times multiplier plus direct salary expense (Reimbursable)
Hourly Billing rates plus reimbursable
Per Diem
Cost plus fixed fee (CPFF)
Fixed price
Percentage of construction cost


SALARY COST TIMES MULTIPLIER PLUS DIRECT SALARY EXPENSE (REIMBURSABLE)


Are frequently used method of determining charges for engineering services. With this method, charges for engineering services are based mainly on direct salaries.

Salary cost – defined as direct salary plus employee benefits. Multiplier – is a factor that compensates the civil engineer for overhead plus a reasonable margin for contingencies, interest or invested capital readiness to serve and profit. Direct non-salary expenses

HOURLY BILLING RATE


The hourly billing rate method of compensation is very similar to the salary cost times multiplier in that hourly billing rate includes all direct personnel expense, overhead and profit.

PER DIEM


the term per diem normally refers to an eight hour day. The per diem charge should be based on the complexity, risk and important of the services and on the Civil Engineers professional standing, expertise and breadth of experience. The Civil Engineer is also reimbursed for travel and subsistence cost and for other out of pocket expenses incurred when away from the home office.

COST PLUS FIXED FEE Under this agreement, the Civil Engineer is reimbursed for the actual costs of all services and supplies related to the project including: salary cost, Overhead, Direct non salary expense, Fixed fee .
The cost plus fixed fee basis requires that the client and the Civil engineer define and agree upon the scope of services the Civil Engineer to perform. Such definition of the scope of service is essential to enable the Civil engineer to estimate costs and propose an equitable fixed fee amount. This must be incorporated into the clientengineer agreement.





The cost plus fixed fee method can also b used when the Civil Engineer is required to start providing service before the detailed scope of services can be determined. In such cases, the following considerations apply:




1. The general scale and intent of the project should be fairly well defined, even if the full scope is indeterminate; for example, the number, size and character of buildings or other facilities. 2. The types of service to be performed by the Civil Engineer should be agreed upon and fully set forth. The agreements should also provide for appropriate adjustments in the fixed fee, in the event that the physical scope of the project, time of completion, or level of effort and services required are materially changed over those contemplated during the negotiations.




FIXED PRICE





The fixed price method of compensation is frequently used for investigations and studies and for basic services on design type projects where the scope and complexity of the assignment are clearly and fully defined. The fixed price amount can be calculated as the sum total of estimated engineering costs for the salaries, overhead and nonsalary expenses, an allowance for contingencies interest on invested capital, readiness to serve, and a reasonable amount for profit. A fixed price agreement should contain a clearly stated time period during which the services will be performed and a provision for adjustment of compensation if the project is delayed for reasons beyond the Civil Engineers control.




Partial payments should be made to the Civil Engineer at stated intervals usually once a month during the performance of the services. These payments are usually based on the Civil Engineers statement of percent completion to date.

PERCENTAGE OF CONSTRUCTION The percentage of construction cost method is seldom used raw. Because of increasing complexity and large variation in tasks for projects, the percentage of construction cost fee curves no longer have a direct correlation to the required engineering fees for specific projects.
This Method may be used to determined 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.
The percentage fee shall consider the type, complexity, location, and magnitude of construction cost of the project and shall not exceed the following percentage of estimated construction cost: a. Feasibility studies – 3% b. Detailed engineering design – 6% c. Detailed architectural and engineering design8% d. Construction supervision – 10%


These percentages include only those works normally undertaken in arriving at the expected outputs and do not include special studies or investigations.
It is further emphasized that the above percentages are only ceilings and it does not necessarily mean that the said percentages shall always be adopted for each project. The actual percentage for a particular project will depend on the factors – the type, complexity, location, and magnitude of construction cost.


SCHEDULE OF MINIMUM BASIC FEES





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. Civil Engineers regularly employed in the private sector shall have 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 minimum basic montly salary corresponding to appropriate entry positions provided by the Civil Service Commission.




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 10% of the professional fee for the project, over and above the basic monthly salary.