Hourly billing rates plus reimbursables

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 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.

Hourly Billing Rate Plus Reimbursable Expenses and a “Not to Exceed” Amount
for Specified Services (Hourly)

Similar to the multiplier approach, hourly billing rate plus reimbursable is based on
the consultant cost that performs the service. It can be used for cases where the extent
of the project is not certain. Moreover, the consultant and the owner should agree on
specifying the expected range of the project and the methods for adjusting not to
exceed amount. In the case the cost closes to not to exceed amount, then the owner
should be informed and provide modified cost estimate for the completion of project.
This approach may be specified and employed in the case where the project range is
not defined properly, simplified accounting, considerably short project assignment,
the extent of the project is defined adequately and on-site construction management
services. (Hamakareem, 2017)

References:
Hamakareem, M. I. (2017). Methods for Calculating Cost of Engineering Consultant

Services. The Constructor. https://theconstructor.org/construction/cost-

engineering-consultant-services-calculation-methods/