1.

1 GENERAL
This manual addresses the procurement of civil engineering services
for a quality project. Quality by definition is one satisfactorily meeting
both the expectations of the client or employer and the requirements
of the project. It requires professional dedication, effort, adequate
time for investigation, planning and innovation, fair compensation, and
appropriate authority and responsibility. It cannot be achieved only by
effort at the beginning or end of a project. These efforts must be
conscious, continuous, and consistent throughout all phases of a
project. Quality results from team effort and is measured by the degree
of satisfaction of all parties involved. This manual is dedicated to
advancing both the understanding and quality of the practice of civil
engineering. The development of this manual is predicated on the
basis that Civil engineering services are accomplished in a manner
meeting the standards of care of the profession of Civil Engineering.

1.2 PROFESSIONAL RESPONSIBILITY

The standard of practice is for Civil Engineers to be given
responsibility for studying, conceiving, designing, observing
construction, and assisting in the programming tor operating and
maintaining engineering works. Other Services that are unforeseen
initially may be required of the Civil Engineer during the evolution of a
project. The health, safety, well- being and comfort of the public in
using a facility, and the ultimate facility cost, all depend to a
considerable extent on how well members of the project team fulfill
their professional and contractual responsibilities. The Civil Engineer,
therefore, has obligations as trustee to the public interest as well as
faithful to the private interests of clients. Successfully fulfilling these
responsibilities require candor, mutual trust, and effective
communication and understanding between the Civil Engineer and the
client. Only in this way can a professional relationship be established
and a successful project implemented. Civil Engineers shall conduct
themselves in a highly Professional Manner and Serve as a Faithful
Trustees or agents of their client or employers. Civil Engineers are
therefore bound by the Fundamental Canons of Ethics contained in this
manual. Care and protection of the environment is paramount in the
Civil Engineer's work engagement. Civil Engineers must always strive
to maintain the highest standard of Ethical Professional Practice in
their dealing with Client employers, employees, competitors and the
community.

1.3 CLIENT-CIVIL ENGINEER RELATIONSHIPS

Many engineering works are conceived, designed, and constructed
through the efforts of Civil Engineers employed in governmental
agencies or in industry. Other engineering projects come to fruition
through the efforts of civil engineering firms engaged for a specific
project or program by public agencies or private clients. Many public
and private entities, of necessity rely on Civil Engineers as their
employees. Independent civil engineering firms are also relied upon to
accomplish projects which require special expertise beyond the
normal capabilities of the client. More recently clients have been
utilizing new concepts, such as program management and design-
build, to implement projects.

1.3.1 OBLIGATIONS OF THE CIVIL ENGINEER

The Obligations of the Civil Engineer include: 1. The Civil Engineer
shall perform Scope of the Services as stated in SECTION 2. 2. The
Civil Engineer shall exercise reasonable skill, care and diligence in the
performance or his obligations. 3. The Civil Engineer shall act
independently and, as required by the contract, perform with
necessary skills and professional judgment, when required to certify,
decide or exercise discretion between the Client and a Third party
with whom the Client has a contract. 4. The Civil Engineer is
authorized to act as the Client's faithful agent when required but only
as implied in SECTlON 2 or implied in the contract adopted for the
Project 5. When aware of any matters which will change or has
changed the scope of the services, the Civil Engineer shall give written
notice to the Client containing particulars of the change. 6. For
Specified Staged Services, the Civil Engineer shall not initiate or
proceed with any subsequent stage of the Services without the
approval of the Client. 7. When required, the Civil Engineer shall direct
and co-operate with all other professionals and integrate their work
where applicable into that being undertaken by the Civil Engineer and
other professionals, but shall not be professionally liable for their
work. 8. The Civil Engineer may recommend specialist suppliers and/or
contractors to design and execute certain parts of the Works, in which
case the Civil Engineer shall co-ordinate the design of such part or
parts with the overall design of the Works but he shall be relieved of
all responsibility for the design, manufacture, installation and
performance of any such part or parts of the Works. The Civil Engineer
shall not be liable for acts of negligence, default or omission by such
person or persons. 9. The Civil Engineer shall notify the Client of any
interest the Civil Engineer has which may significantly conflict with
the interests of the Client under their Contract.

1.3.2 OBLIGATIONS OF THE CLIENT

The Client has the following obligations. 1. The Client shall pay the
Civil Engineer for his Services, the amount of fees and expenses set
out in or determined in their Agreement. 2. The Client shall provide the
Civil Engineer within reasonable time (that does not result in delay to
the provision of the Services), all information required by the Civil
Engineer in the performance of his services and a decision in writing
on all matters properly referred to the Client in writing. 3. The Client
shall cooperate with the Civil Engineer and shall not interfere with or
obstruct the proper performance of the Services. 4. The Client shall, as
soon as practicable, make arrangements to enable the Civil Engineer
to enter the site and inspect facilities needed in the performance of
his services. 5. The Client shall arrange for the provision of services
from other professionals or others as may be required and bear all
costs. 6. When the Civil Engineer is required to administer the work of
other professionals or other third parties who are directly contracted
by the Client or when the Civil Engineer is required to act as Engineer-
to-the-Contract for any contract on behalf of the Client then all
instructions by the Client shall be given through the Civil Engineer 7.
When aware of any matter which will change or has changed the
scope of the Civil Engineer's Services, the Client shall notify in writing
within 7 days the Civil Engineer containing, as far as is practicable,
the particulars of the change.

1.3.3 LIABILITY OF THE CIVIL ENGINEER AND THE

CLIENT
The Civil Engineer shall only be liable to pay damages to the Client
arising out of or in connection with their Agreement if a breach of duty
of care is established against the Civil Engineer. The Client shall only
be liable to pay damages to the Civil Engineer if a breach of the
Client's duty to the Civil Engineer is established against the Client.
Resolution of any conflict arising from the Agreement between the
Civil Engineer and the Client shall be done by giving preference to the
process of arbitration. Establishment of the breach of duty on the part
of the Civil Engineer and that of the breach of the Client’s duty to the
Civil Engineer shall be undertaken by a third party arbitrator mutually
acceptable to the Client and the Civil Engineer.

1.3.3 a. Limitation or Civil Engineer's Responsibility

1. The Civil Engineer shall have no responsibility or liability for costs,
loss or damage or whatsoever nature arising from any errors in or
omission from data, documents, plans, design or specifications not
prepared by the Civil Engineer or other personnel under the direct
control of the Civil Engineer, and arising from any act or omission or
lack of performance or any negligent or fraudulent act or omission by
the Client or any Other Consultant, Contractor or supplier to the Client
or any employee or agent of the Client, Other Consultants, Contractors
or suppliers 2. Notwithstanding any recommendation or lack of
recommendation made by the Civil Engineer to the Client, the Civil
Engineer shall not be held to have made any warranty or promise as to
the suitability, competence or performance of any Other Consultant,
Contractor, supplier, or other third party. 3. The Civil Engineer shall not
be responsible for the techniques, method, programmes, sequences or
procedures adopted by any Contractor or other third party responsible
for executing any aspects of the Project, nor for their performance on
time, their failure to carry out the work in accordance with any
contract documents or for any other acts or omissions.

1.3.3 b. Damages
If found that the Civil Engineer undertaking Services is liable to the
Client, damages shall be payable on the following terms: 1. Damages
payable shall be limited to the amount of reasonably foreseeable loss
and damage suffered as a direct result of such breach; 2. The
maximum amount of damages payable in respect of liability, whether
under the law or contract, or otherwise, is limited to the amount
specified in the Specific Provision or, if no such amount or provision is
specified, to the lesser of P300.000 or 10% of the total amount of
damages of the portion of the work attributable to the Civil Engineer's
breach of duty or twenty five percent of the total of fees payable under
their Agreement; 3. If found to be liable, in circumstances where the
acts or omissions of a third party have contributed to the loss or
damage, the proportion of damages payable by the party found liable
shall be limited to that proportion which is attributable to that party's
breach of duty, whether the claims are made under contract or
otherwise.

1.3.4 SUSPENSION OR TERMINATION OF SERVICES

If circumstances arise for which the Civil Engineer is not responsible
and which make it impractical or impossible for the Civil Engineer to
perform in whole or in part the Services in accordance with their
Agreement then the Civil Engineer shall promptly notify the Client of
the same. If by reason of the abovementioned circumstances certain
Services had been suspended, the time for their completion shall be
extended by the extent of the delay plus a reasonable period their
resumption, or if the speed of performing certain Services has to be
reduced, the time for their completion shall be extended as is
necessary by reason of the circumstances. The Client may suspend all
or part of the Services or terminate the Agreement by written notice of
not less than 30 days to the Civil Engineer who shall immediately
make arrangements to stop the Services and minimize further
expenditure. The Civil Engineer by written notice of no less than 30
days may terminate the Agreement or at his and or her discretion
without prejudice to the right to terminate, suspend the performance
of the whole or part or the Services under the following conditions: 1.
When 30 days after the due date or payment of any account the civil
Engineer has not received payment of that part of it which has not by
that time been contested in writing, or 2. When Services have been
suspended tor a period exceeding calendar months, or if it is clear to
the Civil Engineer that it will be impossible or impractical to resume
the suspended Services before the period of suspension has exceeded
six months. When the Services are suspended or terminated the Civil
Engineer shall be entitled to payment for the services carried out
including consequential costs, expenses and disruption fees incurred
as a result of the suspension or termination, and remobilization fees on
resumption. 'Suspension or termination of the agreement shall not
prejudice or affect accrued rights or claims and liabilities of the
parties.

1.3.5 SETTLEMENT OF DISPUTES

If a dispute arises on either party, then that party shall by notice in
writing served on the other party of the details of the dispute and
request that the dispute be resolved by conciliation. If the matter in
dispute is not resolved in conciliation between the parties within the
prescribed time then the matter in dispute shall be referred to
arbitration.

1.3.6 OWNERSHIP OF DATA, DESIGNS AND

DOCUMENTS
The design analyses, drawings, specifications and reproductions
thereof are instruments of service owned by the Professional Engineer
and shall be used only for the specific project covered by the
agreement between the Client and Engineer.

1.4 CIVIL ENGINEERING SERVICES

Civil Engineers and Civil engineering firms, whether they serve public
or private employers (clients) can provide a variety of important
services which are described in Section 2. Typical services may
include: 1.)Design, consultations and advice 2.)Feasibility studies
3.)Field investigations and engineering data collection
4.)Environmental assessments, impact statements or Engineering
reports 5.)Opinions of probable construction cost 6.)Preliminary and
final designs, drawings, specifications and construction bidding
documents 7.)Assistance in securing construction bids and in
awarding contracts 8.)Construction administration and observation
9.)Arrangements for or performance of testing of materials and
equipment 10.)Assistance In start-up, assessment of capacity, and
operation of facilities 11.)Preparation of operation and maintenance
manuals 12.)Appraisals and rate studies 13.)Value engineering
14.)Expert testimony 15.)Assessment of risks 16.)Structural
remediation or rehabilitation 17.)Project Management and control
18.)Provision of supplemental temporary staff 19.)Teaching Civil
Engineers may also serve as construction manager or program
managers and may employ other sub consultants and subcontractors
as part of their services. Many Civil Engineers and civil engineering
firms specialize in specific areas of engineering, such as: structural
and foundation, geotechnical and environmental, water resources and
hydraulics, transportation, and construction management and
engineering.
1.5 SPECIALIZATION IN CIVIL ENGINEERING
Within the practice of civil engineering, the PICE recognizes the initial
five areas of specialization. A Civil Engineer who has demonstrated his
knowledge, experience, education and training in accordance with the
requirements of the concerned Specialty Committee of the PICE is
awarded a certificate of specialization by PICE. Those awarded with
the certificates are considered qualified for positions in the respective
areas of specialization. The PICE recognizes specializations in the
fields of structural engineering, geotechnical engineering, water
engineering, transportation engineering, and construction
management and engineering. A Civil Engineer who has specialized in
any area of Civil engineering may be considered as a specialist in the
appropriate field as enumerated.

1.6 SELECTION OF A CIVIL ENGINEER

The engagement of a Civil Engineer is one of the most important
decisions to be made during the development of a project. The
accomplishment of the Client’s objectives and commitment of financial
resources, soundness of design, and suitability of the proposed project
for its intended function rest upon the experience, organization, skill,
integrity, and judgment of the Civil Engineer. The Civil Engineer's
recommendations based on these factors, affect life-cycle costs and
thereby influence the economic feasibility of the undertaking. The cost
of the full range of engineering services typically amounts to not less
than 1 to 2% of the lite-cycle cost of most Construction projects. It is,
therefore in the client's best interest to engage the most qualified and
reputable Civil Engineers or Civil Engineering firm available. It is
usually advantageous for the client to select a Civil Engineer who can
support the project from conception through design, construction, and
project start-up. Continuity of service aids in developing a relationship
between the Civil Engineer and the client, which will add to the
success of the project. Qualifications, experience, reputation, and
quality of client service are of critical importance in the selection of a
Civil Engineer as a consultant. Selection based primarily on the cost of
services, with limited consideration of the competence or expertise of
the consultant, can result in unsatisfactory service to the client and in
higher overall project costs. The Civil Engineers competence in
specialty fields, performance on other projects of similar nature,
interrelationship with the design team members, personnel
assignments, provision for independent reviews, and costs, insurance
and other annual charges and the resulting life-cycle costs of the
project. Importantly, the client should recognize that selecting an
engineer based on quality and expertise is somewhat subjective. It is
imperative that clients assign those individuals who are best suited
within their organizations to make that selection. Once a Civil
Engineer is selected, detailed discussions between the engineer and
client to define the scope and expectations of the engineering
services to be provided, are essential before negotiating a fee for
services. A clearly defined scope of services greatly reduces the
potential for misunderstandings or confusion which can later evolve
into project delays and claims for additional compensation. A detailed
scope of services protects the interests of both the client and the
consultants. The Philippine Institute of Civil Engineers supports
procedures such as those specified by CIAP Documents 101 and 102,
Executive Order 164, and PD 1594 as amended. In applying these
procedures the selection, procurement and administration of
engineering services should be the responsibility of the owner or the
owners engineering staff.

1.7 PRIME PROFESSIONAL PRACTICE

The guidelines in this manual refer specifically to the engagement of
engineering services where the consulting Civil Engineers serve as the
client directly as a prime professional, and where the client is usually
also the owner of the project. Some information in this manual is also
applicable when the Civil Engineer serves the client indirectly as a sub
consultant through another engineer or architect who serves as the
prime professional. These services may also be performed through
another entity on a design-build management or turnkey project.

1.8 EMPLOYMENT
The guidelines in this manual also refer to Civil Engineers employed by
professional consulting firms, government agencies, educational
institutions, construction firms, manufacturing and commercial
entities and other entities

1.9 DESIGN COMPETITION

Design competition is a process through which a Civil Engineer is
selected above other competitors based on innovative approach to
solving a client's needs. Competing firms are normally shortlisted from
a number or engineers responding to a clients solicitation either
directly, by a letter request or indirectly through a newspaper or other
form or publication. The civil engineer should be awarded a stipend to
participate in the competition.

1.10 CONTINGENCY BASIS OF EMPLOYMENT

Canon 5c or the PICE Code or Ethics provides that "Engineers may
request, propose or accept professional commissions on a
contingency basis only under circumstances in which their
professional judgments would not be compromised." Although
contingent commissions are permissible, it is the general view of PICE
that is not in the best interest of the client or the public for the Civil
Engineer to provide professional services on a contingency basis.

1.11 PROFESSIONAL PRACTICE OF FOREIGN CIVIL

ENGINEERS
Foreign Civil Engineers are allowed by law (See RA 8981) to practice
civil engineering in the Philippines under the following instances. 1.)
The laws of the foreigner's state or country allow the citizens of the
Philippines to practice civil engineering on the same basis and grant
the same privileges as those enjoyed by the subjects or citizens of
such foreign state or country. 2.) Allowed under international
agreement. 3.) Consultants to be engaged in foreign-funded, joint
venture or foreign-assisted projects of the government. 4.)Employees
of Philippine or foreign private institutions pursuant to law. 5.) Civil
Engineers who were former citizens of the Philippines, who had been
registered and issued a certificate of registration and a professional
identification card prior to their naturalization as foreign citizens, and
who, while in the country on a visit, sojourn or permanent residence,
desire to practice their profession. The application of the law is
however not automatic. Foreign civil engineers must still secure a
certificate of registration/license or special permit from the
Professional Regulation Commission. Agencies, organizations or
individuals, whether public or private, who secure the services of a
foreign Civil Engineer, are made responsible by law (RA 8981) for
securing a special permit from PRC and the Department of Labor and
Employment pursuant to their respective rules.

2.1 GENERAL
The needs for professional civil engineering services vary, and the civil
engineering firms that meet these needs vary in organizational
structure, size, and capability. Many civil engineering firms provide
comprehensive services to the client, while other firms specialize in
areas of engineering, such as geotechnical or structural, and
transportation, water and construction management, and provide their
services to a prime engineer, architect, or owner. Few civil
engineering firms are qualified to provide complete service for all
projects, and the use of associate professionals to provide specialized
services is common. Services provided by Civil Engineers can be
grouped into five Broad categories: a.)Consultations, research,
investigations, and reports. b.)Design services for construction
projects c.)Construction services d.)Special services for construction
projects e.)Engineering support services f.)Academic services
g.)Services as Employee The types of infrastructure under the domain
of civil engineering pursuant to RA 544, as amended, include:
1.)Streets, bridges, highways and railroads 2.)Airports and hangars
3.)Port works, canals, river and shore improvements, light houses and
dry docks 4.)Buildings 5.)Fixed structures for irrigation, flood
protection, drainage, water supply and sewerage works 6.)Tunnels The
coverage of civil engineering has not been changed nor diminished by
subsequent laws.

2.2 CONSULTATIONS, RESEARCH, INVESTIGATIONS

AND REPORTS
These services deal primarily with collecting, interpreting, and
reporting information together with formulating conclusions and
making recommendations. Typical services in this category are:

2.2.1 Preliminary and Feasibility Investigations and

Reports
These services usually precede the authorization of a capital project
and may involve extensive investigations, analyses of conditions, and
comparison of several possible plans. These studies may include, the
impact of a project upon the environment, sustainable development,
operating costs, life cycle costs, financing considerations, and
expected revenues as bases for conclusions and recommendations
regarding the advisability of undertaking a project.

2.2.2 Planning Studies

These services may include the broad areas of developing the
engineering requirements of master plans for long-range capital
improvement programs: preparation of preliminary engineering of land
development plans, urban plans, and regional plans, and the
investigation of environmental conditions and preparation of
environmental impact studies with subsequent engineering planning to
improve or maintain existing conditions. Such planning often requires
coordination of the work of many engineering and other disciplines.

2.2.3 Appraisals, Valuations and Rate Studios

These services may include investigations and analyses of existing
conditions; capital and operating costs; overhead costs and costs of
financing; and revenues as needed to evaluate a property or to
recommend establishment of prospective rates.

2.2.4 Assistance in Financial Matters

The Civil Engineer may be engaged by a client who is planning to issue
bonds, particularly revenue bonds, to finance a capital project. The
scope of services may include an evaluation of capabilities of existing
or proposed facilities to meet present and projected future needs,
statements of probable construction costs, and an estimate of annual
revenue requirements, with a determination of appropriate rates to
provide this income.

2.2.5 Materials Engineering and Equipment Tests

These services include tests of materials and equipment under
established codes and standards, specialized examination of
equipment and materials used in construction and industry, and other
inspections and monitoring required by a client.

2.2.6 Direct Personal Services

This includes services such as assistance in preparation for legal
proceedings. Appearances before courts or commissions to render
expert opinions and conclusions, and investigations of technical
matters where specialized civil engineering knowledge, experience,
and judgment are required.

2.2.7 Research and Development

Research is a specialized investigation and gathering of data from
existing resources or through laboratory works and processes related
to the purpose and object of the research. Research and development
may cover the following: (a) Development of new construction
materials and methods from concept to commercialization. (b)
Improvement of construction materials and methods through
exhaustive studies to reduce total construction cost and at the same
time improve quality.

2.2.8 Special Services

These services can vary to suit special needs of the client and can
include such diverse activities as: 1.)Value engineering 2.)Appraisal
and valuation 3.)Load testing 4.)Environmental evaluations 5.)Traffic
engineering 6.)Forensic engineering for structural and other failures
7.)Operational assistance 8.)Materials process design 9.)Pilot studies
10.)Computer modeling 11.)Safety engineering 12.)Topographic,
sounding and boundary survey engineering 13.)Toxic and hazardous
waste evaluation 14.)Permit and application services 15.)Sales and
marketing services 16.)Expert witness 17.)Representation of municipal
or private entities in projects proposed for privatization

2.3 DESIGN SERVICES FOR CONSTRUCTION

PROJECTS
Civil engineering services are required for each of six typical phases of
construction projects. All services are preferably furnished by the
same Civil Engineer for consistency and efficiency, although at times
services in various phases are furnished by different engineers or by
the client. The services are supplemented by special services which
may be provided by the client, a specialized engineer, or another Civil
Engineer. The six standard phases of a construction project and the
engineering services needed for each are: 1.)Study and Report Phase.
Analysis of the clients needs conceptual design conceptual opinions of
probable construction cost. 2.)Preliminary Design Phase. Preparation
of final design criteria, preliminary drawings, outlines specifications,
and preliminary opinions of probable construction cost. 3.)Final Design
Phase. Preparation of design calculations, construction drawings,
specifications, estimated construction cost, and other contract
documents. 4.)Bidding or Negotiating Phase. Assistance to the client
with the bidding or negotiating process for construction of the project.
5.)Construction Phase. Advice and Consultation on matters related to
his services. 6.)Operation Phase. Assistance to the client in start-up
and operation of the project, including periodic inspections.

2.3.1 Study and Report Phase

This phase involves determination of project scope and economic and
technical evaluation of feasible alternatives. The services performed
during this phase may include: 1.)Reviewing available data and
consulting with the client to clarify and define the client's
requirements for the project. 2.)Advising the client as to the necessity
of providing or obtaining from others additional data or services and
assisting the client in obtaining such data and services. These
additional services may include photogrammetry, reconnaissance
surveys, property surveys, topographic surveys, geotechnical
investigations and consultations, seismicity studies, compilation of
hydrological data, traffic studies, materials engineering, assembly of
zoning, deed and other restrictive land use information, and
environmental assessments and impact statements. 3.)Identifying and
analyzing requirements of governmental authorities having jurisdiction
to approve the design of the project and participating in consultations
with such authorities. 4.)Providing analyses of the client’s needs,
planning surveys, Comparative evaluations of prospective sites and
solutions. 5.)Providing a general economic analysis of the client's
requirements applicable to various alternatives. 6.)Preparing a report
and presenting alternative solutions available to the client with the
Civil Engineer's findings and recommendations. The report may
contain schematic layouts, Sketches, conceptual design criteria with
appropriate exhibits to indicate clearly the considerations involved
(including applicable requirements of governmental authorities having
jurisdiction) and the Civil Engineers conceptional opinion of probable
costs for the project.
2.3.2 Preliminary Design Phase
This phase involves the establishment of the general size and scope of
the project and its location on the selected site. The preliminary
design services may include: 1.)Consulting with the client, reviewing
preliminary reports, clarifying and defining the project requirements,
reviewing available data, and discussing general scheduling.
Conferences may also be required with approving and regulatory
governmental agencies and applicable utilities. 2.)Advising the client
as to whether additional data or services of the type described under
the study and report phase above required and assisting the client in
obtaining such data and services. 3.)Preparing preliminary design
documents consisting of final design criteria, preliminary drawings,
outline specifications, and written descriptions of the project.
4.)Preparing revised estimates of probable total project costs.
5.)Providing periodic status reports.

2.3.3 Final Design Phase

This phase of project development is usually undertaken only after the
client has approved the preliminary design phase material. The basic
services for the final design phase may include: 1.)Preparing
construction drawings and specifications showing the character and
extent of the project based on the accepted preliminary design
documents. 2.)Preparing and furnishing to the client a revised estimate
of probable total project costs based on the final drawings and
specifications. 3.)Furnishing the necessary engineering data and
assisting in the application for regulatory permits from local or
national authorities. This is distinguished from and does not include
detailed applications and supporting documents for government
grants-in-aid or planning grants that would be furnished as additional
services described later in this section. 4.)Preparing basic documents
related to construction contracts for review and approval by the client
(and the client's legal and of her advisors) These may include contract
agreement forms, general conditions and supplementary conditions,
invitations to bid, instructions to bidders, insurance and bonding
requirements, and other contract-related documents. 5.)Furnishing to
the client specified number of copies of drawings, specifications and
other contract documents. 6.)Providing final design and construction
services for design-build contracts. The engineer generally serves as a
subcontractor to a general contractor during the initial planning and
design phases. Services provided by the engineer may extend through
the construction phase, as appropriate. 7.)Providing periodic status
reports.

2.3.4 Bidding or Negotiating Phase

Services under this phase may include: 1.)Assisting the client in
advertising for and obtaining bids or negotiating proposals for each
separate prime construction contract, maintaining a record of
prospective bidders to whom bidding documents have been issued,
attending pre-bid conferences, and receiving and processing deposits
for bidding documents. 2.)Issuing addenda as appropriate to interpret,
clarify, expand or amend the bidding documents. 3.)Assisting the
client in determining the qualifications and acceptability of
prospective contractors, subcontractors and materials suppliers.
4.)Consulting with and advising the client as to the acceptability of
alternative materials and equipment proposed by the prospective
constructors when substitution prior to the award of contracts is
allowed by the bidding documents. 5.)Attending the bid opening,
preparing bid tabulation sheets and providing assistance to the client
in evaluating bids or proposals and in assembling and awarding
contracts for construction, materials, equipment and services.

2.3.5 Construction Phase

Services under this phase involve consulting with and advising the
client during construction and are usually those associated with
service as the client's representative. Most Civil Engineers are not
willing to assume the responsibilities associated with construction
phase services without providing resident project representative
services at the site. Construction phase services may include:
1.)Reviewing, for compliance with design concepts, shop and erection
drawings submitted by the constructors. 2.)Reviewing laboratory,
shop, and mill test reports on materials and equipment. 3.)Visiting the
project site at appropriate intervals as construction proceeds to
observe and report on the progress and the quality of the executed
work. 4.)Providing services during construction by a full-time resident
project representative, and by supporting staff as required, to enable
construction to be accomplished in conformance to the construction
drawings, specifications, and other contract documents. 5.)Issuing
instructions from the client to the contractors, issuing necessary
interpretations and clarifications of contract documents, preparing
change orders, requiring special inspections and testing of the work,
and making recommendations as to acceptability of the work.
6.)Making recommendations to the client on corrective actions or
contractual measures that may be exercised by the owner.
7.)Preparing sketches required to resolve problems due to actual field
conditions encountered. 8.)Determining amounts of progress payments
due, based on degree of completion of the work, and recommending
issuance of such payments by the client. 9.)Observing and assisting
performance tests and initial operation of the project. 10.)Preparing
record drawings from information submitted by the contractor.
11.)Making a final inspection and reporting on completion of the
project, including recommendations concerning final payments to
contractors and release or retained percentages.

2.3.6 Operation Phase

At the completion of construction, the Civil Engineer may as a basic
service, assist in the start-up of project operations. Nee Civil Engineer
may be commissioned to prepare a manual for both operation and
maintenance requirements, and may also provide assistance in
adjusting and balancing equipment, identifying deficiencies and
assisting in obtaining corrections, and performing inspection prior to
the end of the project warranty period. The Civil Engineer may assist in
operator training, setting up job classifications and salaries,
organizing the purchase of supplies developing charts for recording
operational data, and observing and reporting on project operations.

2.4 CONSTRUCTION SERVICES

A registered Civil Engineer may engage in construction contracting
after being licensed as a contractor by the Contractors Accreditation
Board. It is considered unethical for a civil engineer to allow his
license to be used by any other construction company except his own.
A registered Civil Engineer may provide the services of a supporting
technical employee as required of a construction company. He shall
however, be paid the professional fees, in addition to his regular
salary, for any design work he performs for which he signs as
professional Civil Engineer and/or engineer on record. A Civil Engineer
may be employed as a construction engineer, resident Civil Engineer,
project engineer, quality control engineer cost engineer or engineer
inspector in a project. In accordance with Section 23 of RA 544, only
registered Civil Engineers can take charge or Supervise construction
or alteration of any building or structure and any other Civil
engineering works mentioned in Section 2 of the mentioned Republic
Act. The Civil Engineer when employed is similarly required to comply
with the code of ethics of the profession as the consulting Civil
Engineer.

2.5 SPECIAL SERVICES FOR CONSTRUCTION

PROJECTS
Special services required during the study, design, construction, and
operation phases of a construction project may include investigations,
reports, and activities beyond the scope of the basic services. These
services, many of which are also listed earlier in this section under the
category "Consultations, Investigations, and Reports, may relate to the
clients decisions as to the feasibility scope, and location of the
project. The research, compilation of engineering data, and acquisition
of property may involve professional specialists in engineering and
other fields. Special services that may be provided by the Civil
Engineer or negotiated with other firms or sub-consultants by the Civil
Engineer acting on behalf of the client could include 1.)Geotechnical
engineering- including test borings, sampling and analysis, and
recommendations. 2.)Special studies, tests, and process
determinations to establish design criteria or demonstrate
compliance. 3.)Land surveys, establishment of boundaries and
monuments, preparation of easement descriptions, and related
computations and drawings. 4.)Engineering and topographic surveys
for design and construction. 5.)Mill, shop, or laboratory inspections of
the materials and equipment. 6.)Additional copies of reports,
construction drawings, specifications, and other documents as
required for bidding and construction beyond the number specified in
the Basic Services agreement 7.)Extra travel and subsistence as
defined by the agreement for engineering services. 8.)Value
engineering including review of the work of other engineers, either
within the same organization or in other firms to determine whether a
proposed solution is optimum and, if not, to suggest a better approach
for meeting the project's functional and financial criteria. 9.)Redesign
to reflect changes requested by the client or necessitated by the
client's acceptance of substitutions proposed by the contractor.
10.)Assistance to the client as an expert witness in litigation in
connection with the project or in hearings before approving and
regulatory agencies. 11.)Final investigations involving detailed
consideration of operation, maintenance, and overhead expenses;
preparation of final rate schedules, and earning and expense
statements appraisals, valuations, and material audits or inventories
required for certification of force account construction performed by
the client or for extra work done by the contractor. 12.)Preparation of
detailed applications and supporting documents grants or advances
tor public works projects. 13.)Plotting, computing, and filing of
subdivision plans, staking of lots, and other land planning and
partitioning activities. 14.)Preparation of environmental assessment
and impact statements and other assistance to the client in
connection with public hearings. 15.)Additional studies and design
efforts to meet special conditions encountered during construction.
16.)Assistance to the client in the selection and engagement of
architects, other engineers, contractors and subcontractors, and
observation and approval of their services or work, contacts with
governmental agencies to obtain permits and documents; and other
services related to project development. 17.)Assessment of a
completed project's ability to meet its design intent relative to
capacity, maintainability, operability, or reliability. 18.)Computer
simulation and modeling.

2.6 ENGINEERING SUPPORT SERVICES

The professional services described above often require engineering
support services. Geotechnical engineering, for example, frequently
requires services such as taking soil and rock borings, excavating test
pits sampling and identifying soil and earth materials, field and
laboratory tests and geophysical measurements and observations. The
engineering support services in general civil engineering practice may
involve drafting, land and construction surveying, and other data
gathering activities for specialized purposes. Although persons who
are not Civil Engineers sometimes accomplish some of these tasks,
the procurement of adequate and correct data usually requires
professional Civil Engineering judgment and guidance. Since
soundness of any engineering decision is dependent upon the
accuracy and suitability of data obtained in field and laboratory
investigations these supporting services must be under the guidance
of the Civil Engineer whose decisions will be based upon those data.
2.7 ACADEMIC SERVICES
These services involve full or part time teaching or training of
prospective professionals and also the upgrading of knowledge and
skills of fellow professionals. Academic services may include
1.)Teaching of civil engineering courses in engineering
colleges/universities on part/full time basis. As per RA 8981, all
subjects for licensure examinations shall be taught by persons who
are holders of valid certificates of registration/professional licenses
and professional identification cards, or special temporary permits, or
a valid certificate of competency for the profession issued by the
Commission, and who comply with the other requirements of the
CHED. 2.)Lecturing in civil engineering courses designed by the
Philippine Institute of Civil Engineers for practicing engineers who
want to obtain CPD credits. 3.)Conducting tutorials/refresher courses
on civil engineering concepts and related subjects 4.)Serving as a
Resource Speaker in Technical Session. 5.)Writing technical articles
and pamphlets.

2.8 SERVICES AS EMPLOYEE

This is a condition when a Civil Engineer engages to perform work or
fulfill duties regularly for wages or salary being paid by an employer. A
Civil Engineer may be employed for any position or function in any
commercial or institutional organization. Where he is performing civil
engineering functions, he is required to follow the code of ethics for
Civil Engineers and comply with the standards and guidelines of this
manual. A licensed Civil Engineer may not allow his licensed to be
used by the company that employs him without the proper agreement
for his professional services. Where the firm he is working for uses his
license to sign and seal the plans, specifications, and contract
document, the Civil Engineer must charge the professional fee for said
services. A Civil Engineer in part time employment with a firm is
considered to be an employee and at the same time a consultant of
the firm. The standards for an employee and an individual consultant
as defined in this manual apply to this Civil Engineer. Any Civil
Engineer employed as an individual consultant of any firm, whether the
firm is performing engineering, commercial, administrative,
management or financial services is required to comply with the
requirements and the standards herein established for a consulting
Civil Engineering firm or consulting Civil Engineer. All Government Civil
Engineers employed by the instrumentalities of the Government e.g.
national and local, shall be governed by pertinent existing laws and
regularities and particularly to those prescribed by the Civil Service
Commission. In case of any conflict with any of the provisions of this
Manual of Practice, such pertinent laws and regulations shall take
precedence and shall govern.

3.1 GENERAL
The selection and engagement of a Civil Engineer is one of the most
important decisions to be made during the development of an
engineering project. No two Civil Engineers have the same training,
experience, capabilities, personnel, workloads, and particular abilities.
Selection of the most qualified Civil Engineer for a specific project will
result in a well-planned and designed, economical, and successful
project. This section presents what experience has shown to be the
best and, therefore, the recommended procedure for the engagement
of a Civil Engineer.

3.2 BASIS FOR SELECTION

The client should establish administrative policy and criteria for the
selection of qualified Civil Engineers for particular projects. The
client's first step is to define the proposed scope of the project. In
some cases, this may be a general statement of the performance
requirements of the project. At other times, the tasks to be performed
maybe individually identified and defined. By clearly defining the
services which the Civil Engineer is to furnish, the client can
accurately judge whether or not the Civil Engineer is best equipped to
provide them. Some of the factors that should be considered in the
selection process are. 1.)The professional and ethical reputation of the
Civil Engineer and his staff as determined by inquiries to previous
clients and other references. 2.)Responsible Civil Engineers and its
employee and must be registered professional Civil Engineers. 3.)Civil
Engineers should have demonstrated qualifications and expertise,
performing the services required for the project. 4.)Civil Engineer
should be able to assign qualified engineering staff who will be in
responsible charge of the project and will be able to provide and
complete the required services within the time allotted. 5.)The Civil
Engineer should have the necessary financial and business resources
to accomplish the assignment and provide continuing service. The
selection procedures described in this manual apply to projects of the
private sector. For government projects, E.O. 164 and PD 1594 as
amended apply to procurement of consulting services and selection of
contractor for construction, respectively.

3.3 CLIENT'S SELECTION COMMITTEE

Within the client's organization there should be an established
administrative policy for designating the persons authorized to select
or recommend selection of Civil Engineers for specific assignments.
The persons appointed should be familiar with the project
requirements and should be kept free of internal or external pressure
during the selection process. One satisfactory procedure is to utilize a
selection committee of three or more individuals, at least one of whom
is a professional engineer of the appropriate discipline. For public
projects, the client must choose individuals who demonstrate
objectivity in order to avoid the appearance of a conflict of interest in
the selection of the Civil Engineer. At least one of the individuals
should be thoroughly familiar with the civil engineering practices. The
committee is responsible for making recommendations after
conducting appropriate investigations, interviews, and inquiries. The
final selection is then based upon the selection committee's
recommendations.

3.4 QUALIFICATIONS-BASED SELECTION (QBS)

PROCEDURE
The selection procedure is considerably enhanced when the client is
fully familiar with the purpose and nature of the proposed project, can
describe the project in detail, and can prepare a project scope and
outline of services expected of the Civil Engineer. In some cases the
client may not have professional staff available to define the project
scope and describe the required services. The client should still be
familiar enough with the project requirements to understand what is
expected of the Civil Engineer. The selection procedure, however, can
be modified to suit the circumstances. The client's usual steps in the
selection procedure are presented below. If the client has had
satisfactory experience with one or more Civil Engineers, it may not be
necessary to follow all of the steps outlined. 1.)By invitation or by
public notice, state the general nature of the project, the services
required, and request statements of qualifications and experience
from Civil Engineers who appear to be capable of meeting the project
requirements. The client may issue Request for Qualifications" (RFQ)
or "Request for Proposals" (RFP). RFQs are normally used to ascertain
the general qualifications in a selected area of expertise while RFPs
are used to seek Civil Engineers for creating "short lists for selecting a
Civil Engineer for a specific project. 2.)Prepare a budget for the staff
time and costs that can be expected from potential Civil Engineer prior
to receipt of the RFQs or RFPs. 3.)Evaluate the statements of
qualifications received. Select at least three Civil Engineers or firms
that may appear to be best qualified for the specific project. It should
be noted that often more than three Civil Engineers or firms may
appear to be equally qualified- in which case more Civil Engineers or
firms may be considered. However, in fairness to those not selected it
is usually best to make a conscientious effort to keep the number
selected for further consideration for realistic minimum in view of the
cost and time required to prepare competent proposals. 4.)Write a
letter to each Civil Engineer or selected for further consideration
describing the proposed project in detail, including a project scope
and outline of services required, and asking for a proposal describing
in detail the Civil Engineer’s plan for managing and performing the
required services, the personnel to be assigned, the proposed
schedule, experience with similar projects, office location in which
services are to be performed, financial standing, present workload,
and references. Each Civil Engineer or firm should have an opportunity
to visit the site, review all pertinent data and obtain clarification of
any items as required. For major or complex projects a pre-proposal
conference may be desirable to explain details of the proposed scope
of services and to answer questions. 5.)On receipt of proposals, invite
the Civil Engineers or firms to meet individually with the selection
committee for interviews and discussions of the desired end results of
the project and the engineering services required. These interviews
may be held at the Civil Engineer's office. The client may consider
supplementing the selection committee with personnel who have
specialized expertise to advise the committee, when appropriate.
During each interview the selection committee should review the
qualifications and experience of each Civil Engineer or firm, the
capability to provide the services within the time allotted, and the key
personnel to be assigned to the project. 6.)Check with recent clients
of each Civil Engineer or firm to determine the quality of their
performance. This check need not be limited to references listed by
the Civil Engineer. 7.)List the Civil Engineer or firms in the order of
preference, taking into account their approach and understanding of
the project, reputation, experience, financial standing, size, personnel
available, quality of references, workload, location, and other factors
pertinent to the project being considered. 8.)Invite the Civil Engineer
considered to be best qualified to develop a detailed scope. List of
deliverables and schedule, and to negotiate fair compensation for the
services. 9.)The compensation proposed by the Civil Engineer should
be evaluated on the basis of the clients experience and budget
estimate, taking account of the range of charges reported in Section 4
herein; giving consideration to the project's special characteristics
and the scope of services agreed upon. Fair and reasonable
compensation to the Civil Engineer is vital to the success of the
project since it will enable the consultant's expertise to be fully
utilized. 10.)If satisfactory agreement is not reached with the first Civil
Engineer, the negotiations should be terminated and the Civil Engineer
or firm be notified in writing to that effect. Similar negotiations should
then be held with the second Civil Engineers or firm and, if necessary,
with the third Civil Engineers or firm. If no accord is reached, the client
should seek outside assistance before continuing with the selection
process. Such a procedure will usually result in development of a
satisfactory contract. All such negotiations should be on a strictly
confidential basis, and in no case should the compensation discussed
with one Civil Engineer be disclosed to another. 11.)When agreement
has been reached on scope, schedule and compensation, the client
and selected Civil Engineer should formalize their agreement in a
written contract.

3.5 SELECTION PROCEDURE FOR "LEVEL OF

EFFORT" CONTRACTS
A level of effort" type of contract for engineering services is a contract
procedure used to supplement a client staff, either by providing an
extension to existing disciplines and capabilities already on board or
by adding special disciplines not available on the client's staff. As
applied to "level of effort" contracts, the QBS procedure sets forth the
general nature of services to be rendered, the types of specialists
required and the estimated number of hours required during the
contract period for each type and grade of specialist, and then
requests proposals from qualified firms. Proposals usually state the
experience of the firm as it pertains to the given scope of services,
and the backgrounds of the specialists available to work on the
project. After narrowing the proposals to those which best meets
experience qualifications, the client negotiates an agreement as
described in paragraphs 9-11 above.

3.5.1 Bidding
Professional engineering and architectural societies recognize QBS as
the preferred method for procurement of professional services. ln fact
the NEDA Guidelines require the procurement of professional
engineering and architectural services only by a process similar to
that described in "Qualifications-Based Selection Procedure", above.
Selection of Civil Engineers and related service professionals,
including consultants and sub consultants on construction projects,
should result from competition based on the qualifications and
resources best suited to complete a project successfully in terms of
performance quality and cost effectiveness. Qualifications and
resources, including training, professional licensing experience, skills,
capabilities, special expertise personnel, and workloads, are
paramount considerations in engaging engineering services. Costs of
these services, while important and meriting careful negotiations and
performance accountability, are a small portion of overall project
costs and should be subordinate to professional qualifications and
experience. There are many reasons why bidding for consulting Civil
Engineering services often produces unsatisfactory results for the
client. Principal among these are: 1.)Bidding does not recognize
professional judgment, which is the key difference between
professional services and the furnishing of products. Judgment is an
essential ingredient in quality engineering services. 2.)It is virtually
impossible to completely detail in advance the scope of services
required for an engineering project especially for the study and
preliminary phases, without lengthy discussions and negotiations with
the selected firm. Lacking specifics, the bidding firms must, in order to
be competitive, submit a price for the least effort envisioned. The
resulting service performed is likely to be tailored to fit the minimal
requirements of the bid documents and will not necessarily suit the
client's needs or expectations. 3.)In-depth studies and analyses by the
consulting Civil Engineer are not likely to be performed. The consulting
Civil Engineer selected by lowest bid will often provide only the
minimum services necessary to satisfy the client's scope of services.
4.)The consulting Civil Engineer's ability to be flexible and creative in
meeting the client's requirements is severely limited. 5.)The
engineering designs are likely to be minimal in completeness with the
details left to the contractor. This produces a lower first cost design
but tends to add to the cost of the completed project. The lack of
design-details also can and frequently does, lead to a greater number
of change orders during construction and to contractor claims at a
later date. For these reasons, bidding for professional services is not
recommended.

3.5.2 Two-Envelope System

The two-envelope system involves submission of a technical proposal
in one envelope and a price proposal in a second envelope. The client
then evaluates the technical proposals and selects the best qualified
Civil Engineer based on that consulting Civil Engineer's technical
proposal. At this point in the selection procedure, the client opens the
price proposal submitted in the second envelope and uses this as a
basis for negotiation of contractual scope and fees. The second
envelopes submitted by the unsuccessful proposers are returned
unopened. If the client follows this procedure, the net effect is as
outlined in "Qualifications-Based Selection procedure”, provided that
the Client and the best qualified consulting Civil Engineer have
extensive discussions to reach full agreement on the scope of
services. This allows the client to utilize the knowledge and
experience of the consulting Civil Engineer in establishing the scope of
services. Upon agreement of scope, the price of services should be
negotiated to reflect changes from the original scope used for
obtaining proposals. If both envelopes of all proposers are opened at
the same time, a bidding process, as discussed in the section on
"Bidding," is initiated with attendant disadvantages. Procedures
should be established to provide confirmation that the second
envelope is opened for only the successful proposal. The two-envelope
system is not recommended. If used as intended, it is similar to the
recommended QBS procedure except that the added cost to prepare a
comprehensive scope and price discourages some consulting Civil
Engineers from participating. The costs to prepare a proper price
proposal are considerable to the firms not selected, which increases
the overall business costs of consulting civil engineering and
ultimately of the clients.
SECTION 4

Charging for Civil Engineering Services

4.1GENERAL
Charges for engineering services are usually computed using one of six methods:

1. Salary cost times multiplier plus direct non-salary expense (“Reimbursable").

2. Hourly billing rates plus reimbursables.

3. Per diem

4. Cost plus fixed fee ("CPFF")

5. Fixed price

6. Percentage of construction cost (“Percentage”).

Combinations of methods of payment for different phases of the contract may be used.

The method or combination of methods used depends upon the nature, Scope, and

complexity of services required by the client. The first four methods are based upon the

Civil Engineers costs to perform services. They are particularly applicable to

assignments where the scope of services is not self-defined. The fixed price and

percentage of construction cost methods are based upon a specific deliverable and do

require that the project scope be well defined. The cost plus fixed fee method provides

more flexibility to accommodate both scope and fee changes than do either the fixed

price or percentage or construction cost methods.

The potential risks and problems faced by both the client and the Civil Engineer, when

the scope of services Is not well defined, should be recognized and discussed during

early negotiations. Often, initial estimates of maximum engineering costs for projects of

uncertain scope are requested by the client for budgeting purposes. Such budget

estimates should state that they do not constitute an agreed-upon maximum and that

they are to be revised as the scope of services becomes better defined.

When a reimbursement method such as salary cost times multiplier, hourly billing rate,

per diem, or cost plus fixed fee is chosen because of uncertainty of the scope of

services. It is logical to propose that an upper limit (maximum amount) for these
services be included in the agreement. The inconsistency of such a proposal is

proportional to the uncertainty of the scope. However, these methods are used with a

"not-to-exceed" amount. In this case, it is important for the client and the engineer to

agree beforehand on a method for adjusting the "'not to-exceed" amount when

adjustment is warranted. One reasonable approach to compensation for uncertain

assignments is to require the Civil Engineer to inform the client when engineering costs

are approaching 75 percent of a stated budget figure and to forecast the probable total

cost. This provision gives the client and the engineer an opportunity to examine

progress at that point and, if appropriate, to revise either the original budget or not-to-

exceed amount or the scope of remaining services.

The charge for engineering services using the fixed price or the percentage of

construction cost methods is based entirely on the scope of services. These methods

may be appropriate where the scope of services is well defined and the Civil Engineer's

costs are within his/her control. Certain types of investigations and designs are well

suited to these methods of determining charges. Determination of charges for services

such as resident project representation during construction, where the Civil Engineer's

costs may be affected significantly by the contractor’s performance can be

accomplished more equitably by one of the methods based on the actual cost of service.

Occasionally, a Civil Engineer has unique qualifications, and/or expertise that is not

readily available, and/or computer programs that materially decrease the time required

for project execution. In some instances, the Civil Engineer may demonstrate that

his/her proposal will make the project easier, faster, safer, or less expensive to achieve

the client’s objective.

Similarly, the client may wish the Civil Engineer to undertake a project characterized by

an accelerated schedule, non-routine services, and/or high risk activities under these

circumstances charges for engineering services may be based on value pricing, which

reflects a premium rate not tied directly to the Civil Engineer's cost, but based on the
Civil Engineers unique qualifications or the extenuating circumstances. One of the more

common value pricing tasks is providing expert witness services.

4.2 SALARY COST TIMES MULTIPLIER 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. With this method,

charges for engineering services are based mainly on direct salaries. It is therefore

advisable that the Civil Engineer reach an agreement with the client on salary ranges for

each classification of service applicable, as well as on the time period over which they

can be guaranteed. This may help avoid future surprises, misunderstandings, and

disputes.

The salary cost times multiplier method may be utilized as either a multiplier times

salary cost (two multiplier version) or a multiplier times direct salary cost (single

multiplier version)

The direct salary times multiplier: or as it is frequently called the direct labor times

multiplier version is very similar to the salary cost times multiplier with the exception that

it applies a single multiplier to unburdened direct labor costs, i.e., direct salaries without

employee benefits. The single multiplier included costs associated with employee

benefits, overhead, and a margin for contingencies, risk, and profit. The direct salary

times multiplier version of this method is being utilized more frequently due to the

simplistic nature of utilizing a single multiplier. Of the two versions of this method the

salary cost times multiplier is the more easily accountable due to the basic premise of

providing two separate multipliers. One multiplier is based upon definitive costs. i.e.,

employee benefits end the other multiplier based upon costs which may vary from

project to project.

Regardless of the method utilized as a basis of compensation, a provision in the

agreement should state that payments will be made to the Civil Engineer during
progress of the services, based on monthly invoices, and within a reasonable time after

billing. Direct non-salary expenses are a separate item for reimbursement usually with a

service charge. The following factors are pertinent to the salary cost times multiplier

version of this method (they may also apply for other methods of charging tor Civil

engineering services)

1. Salary cost is defined as "direct salaries plus employee benefits" and includes

salaries for partners or principals and for technical, professional, administrative

and clerical staff directly". Chargeable to the project: sick leave, vacation, holiday

and incentive pay; unemployment and other payroll taxes, and ne contributions

for social security, workers' compensation insurance retirement, medical, and

other group: benefits.

Note that salaries or imputed salaries of partners or principals, to the extent that

they perform technical or advisory services directly chargeable to the project, are

to be reimbursed in the same way as are other direct salary costs.

2. Multiplier which is applied to salary cost is a factor that compensates the Civil

Engineer for overhead (as defined hereinafter) plus a reasonable margin for

contingencies, interest or invested capital readiness to serve, and profit. The size

of the multiplier will vary with the type of service, the nature and experience of

the civil engineering firm, and the geographic area in which its office is located.

The average multiplier should be between 2.5 and 3.0 times the average salary

cost. For some services, however, a higher multiplier is usually applicable for

services requiring recommendations based on extensive experience and special

knowledge, or for services involving expert testimony in legal proceedings. The

Multiplier may also increase with the experience and special capabilities of the

Civil Engineer's firm.

3. Direct non-salary expenses usually incurred in engineering engagements may

include the following:

a. Living and traveling expenses of principals and employee's 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 (for other

than general correspondence).

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) charged to the client's project) 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. Such projects may require special insurance,

which Is also normally billed as a direct cost to the project. Such expenses

are normally reimbursed by the client at actual invoice cost plus an

administration charge to compensate for associated accounting, purchasing,

contract administration, risk of liability, etc.

4. The Civil Engineers overhead which comprises a major portion of the

compensation generated by the multiplier on salary cost, includes the following

indirect costs:

a. Provisions for office expenses-light, heat,, telephone depreciation, rental

furniture, rent, drafting equipment and engineering instruments, transportation

expenses, and office and drafting supplies not identifiable to a specific project.

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 projects. These services and expenses, essential to the conduct of

the business, include preliminary arrangements for new projects or

assignments and interest on borrowed capital.

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 employees on public service

assignments.

g. Costs of acquiring and maintaining computers, development of software, and

training staff when not billed as a direct cost.

5. Accounting records. The Civil Engineer who performs services under a salary

cost times multiplier agreement or other cost-based agreement must provide the

accounting necessary to segregate and record the appropriate expenditures.

Adequately detailed hourly time records must be maintained for principals,

engineers and other employees who devote; time to the project.

Applicable payroll records, together with receipts or other documents to

substantiate chargeable expenditures, must be available for inspection audit by

the client if required by contract.

4.3 HOURLY BILLING RATE

The hourly billing rate method of compensation is very similar to the salary cost times

multiplier method in that the hourly billing rate includes all direct personnel expense,
overhead and profit. Direct non-salary expenses (as defined under the salary cost times

multiplier section) are a separate item for reimbursement, usually with a service charge.

Civil engineering firms may elect to utilize this method of compensation on projects

where the scope of service is not well defined or to simplify accounting and record

keeping.

4.4 PER DIEM

The term Per Diem normally refers to an eight-hour day. Direct personal services of the

type described in Section 2 which are frequently charged on a per diem basis. This

basis is particularly suited to expert witness or other legal-type services and to other

short-term engagements involving intermittent personal services.

Where per diem services are furnished, the Civil Engineer should be compensated for

all of the time devoted to providing them, including travel and standby time. The per

diem charge should be based on the complexity, risk, and important of the services and

on the Civil Engineer's professional standing, expertise, and breadth of experience. The

Civil Engineer is also reimbursed for travel and subsistence costs and for other out-of-

pocket expenses incurred when away from the home office.

For engagements in which the Civil Engineer is to appear as an expert, a per diem

charge is considered to be earned for each day of such appearance, even though the

Civil Engineer is not called to testify or, if called, may, finish testifying in only a part of

the day.

On occasion the urgency of the engagement requires the Civil Engineers time regularly

for periods longer than the normal eight- hour day. In such cases an understanding

should be reached with the client, and the per diem rate increased accordingly.

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 Civil Engineer is reimbursed for the actual

costs of all services and supplies related to the project, including:

1. Salary costs, as previously defined

2. Overhead, as previously defined (The Civil Engineer should be prepared to

support the basis for overhead charges.)

3. Direct non-salary expenses, as previously defined

4. Fixed fee, an amount to compensate the Civil Engineer for contingencies, interest

on invested capital, readiness to serve, and profit.

The cost plus fixed fee basis requires, as a prerequisite to equitable negotiations, that

the client and the Civil Engineer define and agree upon the scope of services the Civil

Engineer is 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. The scope

of services, cost estimate, and fixed fee should be incorporated into the client-engineer

agreement.

The cost plus fixed fee method can also be 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, the type of utilities, and other such essential

information should be available.

2. The types of service to be performed by the Civil Engineer should be agreed

upon and fully set forth. The agreement 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.

The fixed fee amount varies with the complexity and scope of the engineering services

required. It is frequently calculated as a percentage of the salary costs, overhead, and

direct non-salary expenses.

Agreements for cost-based methods should provide for reimbursement of all costs to be

incurred directly or indirectly in connection with the project, including but not limited to

those foreseen when the agreement is negotiated. The list of reimbursable items should

be as complete and detailed as possible. One advantage of the cost plus fixed fee

method is that it eliminates any suspicion that the costs have been allowed to grow in

order to increase the Civil Engineer's fee, which by definition is a fixed amount. Because

the entire fixed fee amount is due the Civil Engineer, whether or not the estimated

project costs have been reached the Civil Engineer has an incentive to complete the

service promptly.

4.6 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 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 costs; this method and its limitations are

discussed in the following section. Results using the percentage method and the direct

calculation method are frequently used to check each other

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 Engineer's control. For design services, there
should be provision for changes required after approval of the preliminary design, with a

clear understanding as to where the final approval authority lies.

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 Engineer's statement of percent completion to date.

4.7 PERCENTAGE OF CONSTRUCTION COST

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. Owners should either use experienced "in-house staff or retain

consultants to develop detailed program budgets for construction costs, right of way,

legal, administrative, engineering services and permits.

This 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

Over the years, engineering experience has established some appropriate correlations

between engineering costs and construction costs for certain types of engineering

design, where design procedures and materials of construction are more or less

standardized. These correlations have resulted in various curves and schedules which

have been widely used.

The validity of the percentage-of-construction-cost method rests upon the assumption

that detailed design and construction supervision costs vary in proportion to the cost of

construction. When judiciously applied, and with due consideration of the ranges within
which engineering scope may vary, this method is valuable as a tool for general

comparison with line-based fees for design services. Its acceptance over many years

also affords a valuable guide for judging the reasonableness of proposal for consulting

services.

The percentage fee shall consider the type, complexity, location, and magnitude of

construction cost of the project and shall not exceed the following percentages of

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%)

These percentages include only those works normally undertaken in arriving at the

expected outputs and do not include special studies or investigations indicated under

Section 2.5 hereof, the outputs of which are ends by themselves.

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 or particular project will depend on the factors mentioned above,

i.e., the type, complexity, location and magnitude of construction cost. As a general rule,

projects within a higher range of construction cost will have lower percentages of fees

than those projects within a lower range of construction cost. The above limits

percentages shall be reduced to the extent that some of the activities undertaken by the

client.

4.8 SCHEDULE OF MINIMUM BASIC FEES

Rates of compensation for Civil Engineers engaged in various capacities are given in

Annex B. The PICE shall regularly update the schedule of fees stipulated in the Annex.

Certain principles should however be observed as follows.

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

(see Section 6.1.1 of the NEDA Guidelines).

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, over and above the basic monthly

salary.