Module No.

7
Charging for Civil Engineering Services Part II

Prepared By:

Engr. Crispin S. Lictaoa

CIVIL ENGINEERING DEPARTMENT
Charging for Civil Engineering Services

1. HOURLY BILLING RATE

COLLEGE OF ENGINEERING

This method is seldom used because of the increasing complexity and

large variation in tasks for projects.

2. 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;
 Charging for Civil Engineering Services

FACTORS:
CIVIL ENGINEERING DEPARTMENT

May be used to determined the compensation of the engineer for the services where the
COLLEGE OF ENGINEERING

principal responsiblity is the detailed desigor construction supervision of facilities to be

constructed.

The cost plus fixed fee, as a prerequisite to equitable negotiations, that the client and the
Civil Engineer define and agree upon the scope of services the Civil Engineer has to
perform.

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

The Civil Engineer is required to start providing service before the detailed scope of
services can be determined in the TWO considerations:

The Fixed Fee amount varies with the complexity and scope of the engineering services
required.
CIVIL ENGINEERING DEPARTMENT
Charging for Civil Engineering Services

3. PER DIEM
COLLEGE OF ENGINEERING

Advisable that the Civil Engineer reach an agreement with the client
on salary ranges for each classification of service applicable.

4. FIXED PRICE

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
 Charging for Civil Engineering Services

5. PERCENTAGE OF CONSTRUCTION COST

CIVIL ENGINEERING DEPARTMENT

A Civil Engineer employed in the private sector who signs and seals
COLLEGE OF ENGINEERING

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.

The percentage fee shall not exceed:

a) Feasibility Studies - 3%
b) Detailed engineering design - 6%
c) Detailed architectural and engineering design - 8%
d) Construction supervision - 10%
 Charging for Civil Engineering Services

6. SALARY COST TIMES MULTIPLIER PLUS DIRECT NON-SALARY

CIVIL ENGINEERING DEPARTMENT
COLLEGE OF ENGINEERING

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 civil engineering services are based mainly on direct salaries.

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 the multiplier with the
exception that it applies a single multiplier to unburdened direct labor cost, i.e.,
direct salaries without employees benefits. The single multiplier includes cost
associated with employees benefits, overhead, and a margin for
CIVIL ENGINEERING DEPARTMENT
COLLEGE OF ENGINEERING

Reference:

Manual of Professional Practice for Civil Engineers

 COLLEGE OF ENGINEERING
CIVIL ENGINEERING DEPARTMENT

THANK YOU!