G1: THE PRACTICE OF CIVIL ENGINEERING 4.

Suspension or termination of services

5. Settlement of disputes
QUALITY - satisfactorily meeting both the 6. Ownership of data, designs, and
expectations of the client/employer and the documents
requirements of the project.
CIVIL ENGINEERING SERVICES
• Requires professional dedication, effort, 1. Designs, consultations, and advice
adequate time for investigation, planning 2. Feasibility studies
and innovation, fair compensation, and 3. Field investigations and engineering data
appropriate authority and responsibility. collection
• Possible through team effort and is 4. Environmental assessments, impact
measured by the degree of satisfaction of statements, or engineering reports
all parties involved. 5. Opinions of estimates
6. Preliminary and final designs, drawings,
PROFESSIONAL RESPONSIBILITY specifications, and construction bidding
• The standard of practice is for Civil documents
Engineers to be responsible for studying, 7. Assistance in securing construction bids
conceiving, designing, observing and in awarding contracts
construction, and assisting in the 8. Construction administration and
programming for operating and observation
maintaining engineering works. 9. Arrangements for or performance of
• The health, safety, well-being, and comfort testing of materials and equipment
of the public in using the facility, and the 10. Assistance in start-up, assessment of
ultimate facility cost, all depend to a capacity, and operation of facilities
considerable extent on how well members 11. Preparation of operation and maintenance
of the project team fulfill their professional manuals
and contractual responsibilities 12. Appraisals and rate studies
• Civil Engineers shall conduct themselves in 13. Value engineering
a highly professional manner and Serve as 14. Expert testimony
Faithful Trustees or agents of their 15. Assessment of risks
clients/employers. 16. Structural remediation or rehabilitation
• Civil Engineers are therefore bound by the 17. Project management and controls
Fundamental Canons of Ethics contained in 18. Provision of supplemental temporary staff
this manual 19. Teaching
• Care and protection of the environment
are paramount in the Civil Engineer's work SPECIALIZATION OF A CIVIL ENGINEER
engagement - recognizes the initial five areas of
• Civil Engineers must always strive to specialization.
maintain the highest standard of Ethical - awards certificate that will consider
Professional Practice in their dealing with qualification for positions in the respective
client employers, employees, competitors, areas of specialization
and the community. 1. Structural and foundation
2. Geotechnical and environmental
CLIENT-CIVIL ENGINEER RELATIONSHIP 3. Water resources and hydraulics
Independent civil engineering firms are also relied 4. Transportation
upon to accomplish projects requiring special 5. Construction management and
expertise beyond the normal capabilities of the engineering
client. More recently clients have been utilizing new
concepts, such as program management and design- SELECTION OF A CIVIL ENGINEER
build, to implement projects. 1. ENGAGEMENT OF A CIVIL ENGINEER - This
is one of the most important decisions to
PROPER RELATIONSHIPS BETWEEN CIVIL be made during the development of an
ENGINEERS AND THEIR PUBLIC AND PRIVATE engineering project.
CLIENTS A. FOR ENGINEERING SERVICES IN
1. Obligations of the civil engineer CONSTRUCTION PROJECTS
2. Obligations of the client Cost of the full range of engineering
3. Liability of the civil engineer and the client: services – not less than 1 to 2% of the life-
*Limitation or Civil Engineer's cycle cost of most construction projects
Responsibility
*Damages
 B. AS CONSULTANT
Basis of Selection:
- Qualification
- Experience
- Reputation
- Quality of Service
Once the selection is completed, discussions
between the client and the civil engineer should
define the two important things before the
compensation of the engineer: • Scope of work •
Expectations from the services
2. PRIME PROFESSIONAL PRACTICE - The
Civil Engineer can work:
• DIRECTLY - Serve the client (considered as
the project owner)
• INDIRECTLY - When working as a sub-
consultant through another engineer or
architect.
3. EMPLOYMENT, DESIGN COMPETITION
EMPLOYMENT - Guidelines in this manual refer to
Civil Engineers employed by professional consulting
firms, government agencies, educational
institutions, construction firms, manufacturing and
commercial entities, and other entities. Civil
engineers covered by the manual are those
employed by:
•Professional consulting firms
•Government agencies •Educational
institutions •Construction firms
•Manufacturing
•Commercial entities
DESIGN COMPETITION - Process through which a
Civil Engineer is selected above other competitors
based on a proposal or innovative approach to
solving a client’s needs. The invitation is through:
•Directly through solicitation •Indirectly
through a letter of request through
publication or newspaper
4. CONTINGENCY BASIS OF EMPLOYMENT
Canon 5c or PICE Code of 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.”
5. PROFESSIONAL PRACTICE OF FOREIGN
CIVIL ENGINEERS
Foreign Civil Engineers are allowed by law (RA 8981)
to practice civil engineering in the Philippines, but
some things need to be followed/considered.
✓ Laws of the foreign country also allow
Filipino civil engineers to practice their
profession on foreign soil.
✓ Allowed under an international
agreement.
✓ Consultant to be engaged in a foreign-
funded, joint venture, or foreign-assisted
project of the government
✓ Employees of Philippine or foreign private
institutions under the law
✓ Naturalized Filipino civil engineers who had
been registered before naturalization
Requirements:
✓ Certificate of registration or license
✓ Special permit from PRC
✓ Special permit from the Department of
Labor and Employment
G2: CLASSIFICATION OF ENGINEERING SERVICES
The types of infrastructure under the domain of civil
engineering, under RA 544, as amended, include:
▪ Street, bridges, highways, and railroads
▪ Airports and hangars
▪ Port works, canals, river and shore
improvements, lighthouses, and dry docks
▪ Buildings
▪ Fixed structures for irrigation, flood
protection, drainage, water supply, and
sewerage work
▪ Tunnels
CLASSIFICATION OF ENGINEERING SERVICES
1. CONSULTATION, RESEARCH, INVESTIGATION,
AND REPORTS.
a. Preliminary and Feasibility Investigations and
Reports - usually precede the authorization of a
capital project and may involve extensive
investigations, analyses of conditions, and
comparison of several possible plans.
b. Planning Studies - 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 environmental conditions and preparation of
environmental impact studies with subsequent
engineering planning to improve or maintain existing
conditions.
c. Appraisals, Valuation, and Rate Studies - 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 the establishment of
prospective rates.
d. Assistance in Financial Matters - 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
e. Materials Engineering and Equipment Tests - 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.
f. Direct Personal Services - assistance in preparation
for legal proceedings. Appearances before courts or
commissions to render expert opinions and
conclusions, and investigation of technical matters
where specialized civil engineering knowledge,
experience, and judgment are required
g. 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:
• Development of new construction
materials and methods from concept to
commercialization.
• Improvement of construction materials
and methods through exhaustive studies
to reduce total construction cost and at the
same time improve quality.
h. Special Services
2. DESIGN SERVICES FOR CONSTRUCTION PROJECTS
Six (6) Construction Phases Required For Civil
Engineering Services
a. Study and report phase - The feasibility of a
project can be investigated in this phase:
• Reviewing data and clarification of the
client's requirements
• Identifying and analyzing government
requirements for project approval.
• Provision for clients' needs (planning
surveys, evaluations) of prospective sites.
• Provision of general economic analysis of
client’s requirements and alternatives.
• Preparation of reports containing
alternative solutions according to the
findings and recommendations.
• Informing the client of necessary data and
services for the project
b. Preliminary design phase - The services include:
• Clarifying the study and report phase and
coordinating with governmental agencies
and utilities.
• Advising clients for additional data and
services required.
• Preparation of estimates
• Provision of periodic status reports
• Preparation of preliminary design
documents: Preliminary drawings and
Outline specifications
c. Final design phase - After approval of the
preliminary design, basic services for the final design
are as follows:
• Preparation of final drawing plans
• Preparation of a revised estimate of the
probable total cost of the project
• Furnishing the necessary data for the
application of regulatory permits.
• Preparation of basic construction
documents for review and approval of the
client.
• Furnishing required copies of necessary
documents.
• Provision of periodic status reports
d. Bidding or negotiating phase - Services under this
phase may include:
• Assisting in the bidding process: Obtaining
bids, attending pre-bid conferences,
 Receiving and processing deposits for
bidding documents
• Issuing addenda for the bidding documents
(interpretation, clarification, amending,
expanding)
• Assisting in the determination of
contractors, subcontractors, and materials
suppliers.
• Advice on the acceptability of materials
and equipment proposed by contractors
and suppliers.
e. Construction phase - Services in this phase include
consulting and advising the client during
construction.
• Review work of constructors through
design concepts and shop and erection
drawings.
• Review test reports on materials and
equipment.
• Visiting the project site to observe and
check progress and quality of work.
• Providing services by a full-time resident
project representative and by supporting
staff.
• Issuing instructions from the client to the
contractors - interpreting and clarifying;
preparation of change orders, special
inspections, testing of work, and a
recommendation to the acceptability of
work.
• Recommend the client on corrective
actions or contractual measures that may
be exercised by the client.
• Preparing sketches required to resolve
problems due to actual field conditions.
• Determining progress of work and
preparation of payments due.
• Observing and assisting performance tests
and initial operation of the project.
• Preparation of record drawings from
information submitted by the contractor.
• Conducting final inspection and reporting
the completion of the project, recommend
final payments to contractors and release
retained percentages.
f. Operation phase
• Preparation of a manual for both operation
and maintenance requirements
• Provide assistance in adjusting and
balancing equipment Identify deficiencies
and assisting in obtaining corrections
• Perform inspection before the end of the
warranty period
• Assist in operator training
• Set up job classifications and salaries
• Organizing purchase of supplies
• Develop charts for recording operational
data
• Observing and reporting on project
operations.
3. CONSTRUCTION SERVICES - A civil engineer can
work as a contractor. However, this is true only after
the civil engineer is licensed as a contractor by the
Philippine Contractors Accreditation Board (PCAB).
Section 23 of RA 544 states that only registered civil
engineers can take charge or supervise construction
or alteration of any building or structure and other
engineering works.
a. RA 4566 (Contractor's License Law) - "R.A. 4566 as
amended by P.D. No. 1746 provides that no
contractor (including sub-contractor and specialty
contractor) shall engage in the business of
contracting without first having secured a PCAB
license to conduct business. It is an offense to engage
in contracting business without a license first being
obtained. " [Construction Industry Authority of the
Philippines]
b. Types of Contractors License
• Regular license. Issued to a domestic
construction firm (a sole
proprietorship/partnership/corporation
with at least 60% Filipino equity.
• Special license. Issued to a joint venture, a
consortium, a foreign contractor, or a
project owner who authorizes the licensee
to engage only in the construction or a
single, specific project/undertaking.
c. Authorized Managing Officers - The qualifications
to be an AMO:
• Senior Executive of a company
• With at least 2-year experience in
implementing a construction project
• in a managerial or supervisory capacity;
and
• Nominated by the firm and possessing
managerial powers
d. Sustaining Technical Employee - A Sustaining
Technical Employee is a licensed technical
professional with at least three (3) year experience.
- The STE (Sustaining Technical Employee) forms the
backbone of the contractor and represents the
technical qualifications required for a PCAB license as
well as the License Classification. STEs also play a
major part in determining the License Category.
- Every contractor shall have at least one Sustaining
Technical Employee (STE) who has undergone the
40-hour Construction Occupational Safety and
Health (COSH) Course for Site Safety Officers as a
condition for license renewal or New License
Application.
- A Sustaining Technical Employee
(STE) must have at
least three (3) year experience of construction
implementation and knowledge of Philippine
construction-building codes and ordinances, labor
safety codes and other laws applicable to
construction operation.
e. COSH Seminar - The Construction Safety and
Health Seminar is a forty (40)-hour seminar that is
intended to equip the contractor/applicant with the
knowledge on standard occupational safety, health,
practices and processes in construction industry. The
following are those who should attend:
• The proprietor in an application for a new
license
• Any person nominated as Authorized
Managing Officer (AMO) in an application
for new license of a partnership or
corporation
• Any person designated to replace the AMO
of a PCAB licensed contractor (application
to be filed: CAMO: Change in AMO)
• Proprietors or AMO of applicants for
upgrading of license category
• At least (1) Sustaining Technical Employee
(STE) of the film. If the proprietor or AMO
who are the same time STEs of their
companies who have completed the
course on COSH are deemed compliant
f. AMO Seminar - The AMO Seminar is a two (2)-day
seminar that is intended to equip the
contractor/applicant with the basic knowledge on
construction safety, building and lien laws, taxation,
labor and other relevant laws, and the basic
principles of the construction business.
4. SPECIAL SERVICES FOR CONSTRUCTION PROJECT
• Geotechnical Engineering including test
borings, sampling and analysis, and
recommendation on soils.
• Establishment of design criteria or
demonstrate compliance Surveying works.
• Land surveys, establishment of boundaries
and monuments, preparation of easement
descriptions, topographic surveys.
• Shop or laboratory inspections
• Reproduction of reports, drawings,
specifications, and documents required for
bidding and construction
• Value engineering
• Extra travel and subsistence
• Redesign to reflect changes by the client
• Assistance to client as an expert witness in
litigation
• Final investigation
• Preparation of documents for public works
• Land planning and partitioning activities
• Environmental assessment and impact
statements
• Detailed studies to meet special conditions
encountered during construction
• Assistance to the client in the selection and
engagement of contractors and
subcontractors.
• Assessment of the project's ability
• Computer simulation and modeling
5. ENGINEERING SUPPORT SERVICES
✓ Drafting - Also called technical drawing,
this is the creation of accurate
representations of objects, buildings or
houses for engineering purposes.
✓ Land and construction surveying -
Surveying works to establish the major
features of the land surface, which can be
affected with upcoming construction.
✓ Procurement of adequate and correct
data - These are information which need
sound engineering judgment and
guidance.
6. ACADEMIC SERVICES
• Teaching of civil engineering courses in
colleges/universities. RA 8981 states that
all subjects for licensure examinations shall
be taught by registered professionals and
who comply with CHED requirements.
• Lecturing in PICE seminars for CPD credits.
- CPD stands for Continuing Professional
Development and it is about the drive to
ensure a certain level of standards in
professional education.
• Conducting tutorials/refresher courses on
civil engineering subjects.
REFRESHER COURSE is a rigorous training
including coaching, drills and pre-board
exams to sharpen your skills and give you
confidence right before the board exam.
Refresher course in civil engineering
includes:
 Mathematics, Surveying, and
Transportation Engineering Hydraulics,
and Geotechnical Engineering Structural
Engineering and Construction
• A Resource Speaker in Technical Session
• Writing technical articles
7. SERVICES AS EMPLOYEE
• A civil engineer can be employed in any
institutional or commercial functions.
• For part-time employment, as an
employee and a consultant, the civil
engineer should be compliant to the two
different standards - as an employee and
as a consultant.
• If the civil engineer is employed in a
consulting firm, he should comply with the
standards of the firm or the consulting civil
engineer.
• Civil engineers working in the government
are governed by laws prescribed by the
Civil Service Commission.
G3. THE SELECTION OFTHE CIVIL ENGINEER
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. 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
employees 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.
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.
- 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.
- 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
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 if 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.
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 the Civil Engineers who appear to be capable of
meeting the project requirements. The client may
issue a “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
projects. 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. 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. The client may
consider supplementing the selection committee
with personnel who have specialized expertise to
advise the committee, when appropriate.
6. Check the 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 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 a 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 a 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.
SELECTION PROCDURE 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
QSB procedures sets for 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 request proposals from
qualified firms.
BIDDING - Professional engineering and architectural
societies, recognize QBS as the preferred method for
procurement of professional services. In fact the
NEDA Guidelines require the procurement of
professional engineering and architectural services
only by a process similar to that descried in
“Qualifications-Based Selection Procedure” , above.
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 ad 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.
TWO-ENVELOPE SYSTEM - The two-envelope system
involves submission of a technical proposal in one
envelope and a price proposal in a second envelop.
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 basis for negotiation of contractual scope
and fees. The second envelopes submitted by the
unsuccessful proposers are returned unopened.
G4: CHARGING FOR CIVIL ENGINEERING SERVICES
➢ SALARY COST TIMES MULTIPLIER PLUS
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.
- This method may be utilized as either a multiplier
times salary cost (two multiplier version) or a
multiplier times direct salary cost (single multiplier
version).
1. SALARY COST - is defined as "direct salaries
plus employee benefits”.
2. 2. MULTIPLIER - is applied to salary cost 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. Average multiplier should be
between 2.5 and 3 times the average salary
cost.
3. DIRECT NON-SALARY EXPENSES - usually
incurred in engineering engagements may
include the following:
▪ Living and traveling expenses
▪ Identifiable communication expenses
▪ Expenses for services and equipment
▪ Identifiable supplies
▪ Expenses for unusual expenses
4. The civil engineer’s OVERHEAD which
comprises a major portion of the
compensation is generated by the
multiplier on salary cost, includes the
following:
▪ Provision for office expenses
▪ Taxes and insurance other than those
included as salary cost
▪ Library and periodical expenses and other
costs of keeping abreast of advances in
engineering
▪ Executive, administrative, accounting,
legal, stenographic, and clerical salaries
and expenses
▪ Business development expenses
▪ Provision for loss of productive time of
technical employees between
assignments, and for time of principals and
employees on public service assignments.
▪ Cost 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.
➢ HOURLY BILLING RATE
- 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 simply
accounting and record keeping.
➢ PER DIEM
- 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
- 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.
➢ 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 project, including:
▪ Salary costs, as previously defined
▪ Overhead, as previously defined (The Civil
Engineer should be prepared to support
the basis for overhead charges.)
▪ Direct non salary expenses, as previously
defined
▪ Fixed fee, an amount to compensate the
Civil Engineer for Under a cost-plus fixed
fee agreement, the Civil Engineer is
reimbursed for the actual costs of all
services and supplies related project,
including: 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.
1. The general scale and intent of the project
should be fairly well fined, 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 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.
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.
ADVANTAGE: 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.
➢ FIXED PRICE
- 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.
- 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;
- 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.
- 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.
➢ PERCENTAGE OF CONSTRUCTION COST
- used to determine the compensation of the
engineer for services where their principal
responsibility is providing a detailed design and
construction supervision
✓ CONSTRUCTION COST- the estimated total
cost of constructing the facility to be
covered by the proposed detailed design,
the construction cost includes the cost of
 the current market rates of labor,
materials, supplies, and equipment used in
the construction.
- 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.
1. Feasibility studies - Three Percent (3%)
2. Detailed Engineering design - Six Percent
Group II - Buildings of 3-Storey up to 14-Storey,
(6%)
towers, tanks, exhibition buildings, memorials,
3. Detailed Architectural Design - Eight
industrial buildings, simple bridges, low dams, piers,
Percent (8%)
wharves, bins and silos, and comparable projects.
4. Construction Supervision - Ten Percent
(10%)

SCHEDULE OF MINIMUM FEES

1. When doing work on foreign assisted
projects, or in projects where
international; consultants participate the
civil engineer performing similar or
equivalent work, should accept
compensation that approximates the
international standard rates.
2. Civil Engineers regularly employed in the
Group III - Buildings with fifteen (15) or more floors,
private sector shall have a minimum
long span and complex bridges, high dams, major
compensation corresponding to 10% more
port works, powerplants and other complex
than the minimum wage prevailing in the
structures not covered in groups I and II.
region as basic monthly salary.
3. A Civil Engineer employed in private sector
who signs and seals the civil engineering
plans, specifications, and other related
documents of a certain project for and in
behalf of his employers shall be
compensated with a minimum of 10% of
the professional fee for the project, aver
and above the basic monthly salary

MINIMUM COMPENSATION OF A CIVIL ENGINEER

AS A PRIME PROFESSIONAL
GROUP 1 - Simple Structures such as lofts,
warehouses, garages, sheds, market building, and
comparable projects of one but not more than two
storeys
MINIMUM COMPENSATION OF A CIVIL ENGINEER
AS PROFESSIONAL NOT PRIME
(A) Group IV - Hotels, large apartment buildings,
office buildings, shopping centers, store buildings,
resorts, hospitals, and comparable projects.

(B) Structures not falling in any group shall be

classified into group 3
MINIMUM COMPENSATION OF A CIVIL ENGINEER
FOR RENDERING THE FOLLOWING SERVICES
G5: TOTAL PROJECT COST
WHAT IS TOTAL PROJECT COST?
It Includes all expenses related to the
project, such as materials, labor, and design services.
PROFESSIONAL ENGINEERING COSTS
A Civil engineer is often engaged to make a
study and to render a planning report on the
contemplated projects including alternative
solutions, layouts and locations along with the initial
estimates of the probable project cost.
✓ Fees paid to Engineers
✓ Estimate of probable cost intended for
professional engineers responsible
✓ Must be approved by client.
CONSTRUCTION COSTS
- Sometimes called " hard costs". A cost associated
with the contractor and anything the contractor
purchases.
- The total cost of the entire construction project.
➢ CONTRACT SUM - It is the price agreed
with the contractor and entered into the
contract.
➢ COST PLANNING - Used to analyzed the
estimated cost during the pre and post
construction phases of the project.
• Initial Cost Appraisal
• Pretender Estimates
• Elemental Cost Plans
• Contract Sum
• Approximate Quantities Cost
Plans
• Final Account
➢ COST ESTIMATES - It is the process of
predicting the overall cost of a new
building project The method used to
estimate actual cost will vary with the
increase in the amount of detail available.
Level of Cost Estimates
• Order of Magnitude
• Preliminary Estimate
• Intermediate Estimate
• Substantive Estimate
• Definitive Estimate
➢ CONSTRUCTION PRICE - It is the cost of the
entire construction of the Project,
including all supervision, materials,
supplies, labor, tools, equipment,
transportation and/or other facilities
furnished, used or consumed, without
deduction on account of penalties,
liquidated damages or other amounts
withheld from payment to the contractor
or contractors.
➢ COST INDEX - Construction Cost Index is an
indicator of the average cost movement
over time of a fixed basket of
representative goods and services related
to Construction Industry.
Code Indexes for Different Locations
• Cost and availability of labor.
• Cost of transportation of
equipment and labor.
• Import duties and local taxes.
• Currency exchange rates.
➢ CAPITAL COST - Capital Cost are associated
with one - off expenditure on the
acquisition, construction or enhancement
of built assets. This may include:
• Land or Property acquisition
• Commissions
• Statutory fees
• Consultant fees directly
associated with the
development
• Materials, plant and equipment
• Labor
• Fixtures and Fittings
• Project Insurance, Inflation,
taxation and financing
• Internal costs directly associated
with the development
➢ OPERATIONAL COST - Operational cost
incurred in a day - to - day operations might
include:
• Wages
• Utilities
• Maintenance and repairs
• Rent
• Sales
 • General and administrative
expenses
➢ WHOLE-LIFE COST - Whole-life costs
consider all costs associated with the life of
a building, from inception to construction,
occupation and operation and disposal.
Whole-life costs for a building include:
• Procurement costs (including
land acquisition, design,
construction, equipment, etc.).
• Maintenance and refurbishment
costs.
• Operational costs (including
running costs and one-off costs
associated with the project such
as change management).
• Disposal costs.
➢ LIFE CYCLE COST - It is an approach that
assesses the total cost of an asset over its
life cycle including initial capital costs,
maintenance costs, operating costs and
the asset's residual value at the end of its
life.
➢ HARD COST
• Labor equipment and materials
required to complete the built
structure
• Site costs, such as utilities,
drainage and so on
• Landscape cost
➢ SOFT COST
• Fees
• Land Cost
• Off-site Cost
• Loans accounting
• Fees and interest
• Insurance and Taxes
• Public Relations and advertising
Cost
LEGAL, LAND, ADMINISTRATION STUFFING AND
FINANCIAL COSTS
These are part of the probable total costs
and are estimated in coordination with the client
since they are usually outside the knowledge and
control of the Civil Engineer. It includes audits, land
costs, the cost of issuing bonds, interest for
borrowed money during construction, legal
administrative expenses and other services.
EXAMPLES:
• Legal fees
• Real estate and land acquisition fees
• Building permit review fees
• Printing (construction documents and spec
books)
• Builder’s Risk Insurance
• Construction bond
• Construction interest expense
CONTINGENCY ALLOWANCE
- A contingency allowance is an amount of money
that is set aside in a project budget or plan to cover
unexpected events or costs that may occur during
the project. This allowance is intended to help
account the inherent uncertainty or risks that are
associated with any project or undertaking.
PURPOSE OF CONTINGENCY ALLOWANCE
✓ To account for errors and omissions in the
construction documents;
✓ To modify or change the scope or quality of
the project;
✓ To pay for unknown conditions.
Some examples of what a construction
company may use a contingency to pay for include
additional costs incurred as a result of:
• Funding loss
• Personnel costs
• Project changes
• Resource management
• Supply issues
• Weather delays
To provide for intangible costs, contingencies
should routinely be added to the basic cost estimate.
It is common practice to add 20% or more to the
estimated probable total project cost at the
completion of the study end report phase, reducing
this to perhaps 10% at the completion of the final
design and perhaps to 5% when the construction bids
become known. Larger or more complex projects
may require higher contingencies.
SUMMARY
✓ Estimate of probable total project cost
should be periodically revised by the
engineers as the design moves forward and
more information becomes known.
✓ The client is normally responsible for
providing estimates of those costs which
may lie outside the Civil Engineers
knowledge or expertise, such as those in
the legal, land, administrative, and
financial areas.