Allowance

Integrated Software Solution for model based Design and Construction
Allowance
User Manual 2021
RIB Software GmbH

Copyright
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2 Allowance 03/05/2022 © RIB Software GmbH

Table of content
Table of content
Before you begin... ................................................................................. 5
1 The allowance in the estimate document............................................. 6

1.1 Adopt default values ................................................................................. 6
1.2 Allowances (property)............................................................................... 7
1.2.1 Creating an allowance .............................................................................. 8
1.3 Select multiple cost codes ........................................................................ 9
1.4 Hierarchical cost codes table.................................................................... 9
2 Allowance configuration...................................................................... 11
2.1 Basic data (configuration/properties)...................................................... 11
2.2 Cost Portions .......................................................................................... 15
3 Allowance method................................................................................ 16
3.1 Calculation of the unit prices .................................................................. 16
3.2 Allowance method with allowance area.................................................. 17
3.2.1 Areawise allowance without area balancing........................................... 17
3.2.2 Areawise allowance with area balancing................................................ 20
3.2.3 Major BoQ areas in the area-wide allowance......................................... 22
3.2.4 Function in both allowance procedures .................................................. 25
3.2.5 Table of markups and DCMs in the two-step allowance ........................ 28
3.2.6 Table of markups and DCMs in the single-step allowance..................... 31
3.2.7 Displays in both allowance methods ...................................................... 33
3.2.8 Allowance by cost portions ..................................................................... 42
3.2.9 Allowance with markup splitting.............................................................. 43
3.3 Allowance method with classifications.................................................... 45
3.3.1 Create classification for allowances via catalog classifications .............. 45
3.3.2 Using the classification catalog for allowances ...................................... 46
3.3.3 Assigning classification elements ........................................................... 46
4 Print ....................................................................................................... 47
4.1 Print options............................................................................................ 47
4.1.1 Cost Codes in Allowances Sheet ........................................................... 47
4.1.2 Allowances Sheet ................................................................................... 47
5 Direct cost markups and price calculation ........................................ 50

5.1 Allowance method (general)................................................................... 50
5.2 Any number of allowance variants ......................................................... 51
5.3 Additional revenues from DCMs on non-standard items ........................ 51
5.4 Determining the direct cost markups (DCM) .......................................... 52
5.4.1 Handling the non-standard item types.................................................... 52
5.4.2 Estimate-by-markup ............................................................................... 53
5.4.3 Basic information on the area-wide allowance ....................................... 54
© RIB Software GmbH 03/05/2022 Allowance 3

Table of content
5.4.4 Estimate using the grand total (tender total)........................................... 55

5.4.5 Evaluation of the direct job costs (DJC) ................................................. 81
5.4.6 Estimate method..................................................................................... 82
6 International Allowance ....................................................................... 84

6.1 Preliminary remarks................................................................................ 84
6.2 Calculate allowance amount for G+A, R+P and additional markup........ 84
6.3 Calculate Allowance for GC.................................................................... 85
6.4 Calculate GC and GRPAM factors ......................................................... 86
6.4.1 GC Allowance......................................................................................... 86
6.4.2 GRPAM Allowance ................................................................................. 87
6.5 Calculate UR .......................................................................................... 88
6.5.1 Formula for unit price calculation............................................................ 88
6.5.2 Example for unit price calculation........................................................... 88
6.6 Allowances Sheet ................................................................................... 90
6.6.1 Allowances Sheet Local ......................................................................... 90
6.6.2 Allowance Sheet Foreign........................................................................ 92
6.6.3 Allowance Sheet Total............................................................................ 92

Before you begin...
Before you begin...

General instructions
Before you begin, please observe the following notes:
▪ We assume that you are familiar with your computer and its operating system.
▪ The processes described are based on a complete program version with all li-
cences and administrator rights.
▪ The instructions for the mouse functions are aimed at right-handed individuals.
▪ We recommend our training sessions for effective work. The dates can be
found on our training calendar or on the Internet.
Instructions for using the documents

▪ For better clarity, we use various Font mark-ups:
– Italics for interface elements
– Bold lettering to emphasise certain text and input values
– <Angle brackets> for keys and key combinations
▪ The following icons are used for navigation within the documents:
Icon Meaning
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must be read. They contain warnings which must not be ignored.
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contain important information such as exceptions or special cases.
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are instructions that should be followed in the given sequence.
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facilitate your work.
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relate to work steps or serve to clarify relationships.
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help to the respective hotline.

The allowance in the estimate document
1 The allowance in the estimate document

Various allowance methods are provided for determining direct cost markups:
▪ Simple allowance
▪ Allowance areawise
▪ Allowance by cost portions
The procedures can be used both for estimate via the final total as well as for the
estimate by markup.
1.1 Adopt default values
This dialog box appears if you have changed the default values for markup
rates.
Here, select how the new values for G&A, R+P and AM should be copied in exist-
ing data:
Do not adopt
The new default values are not adopted in existing data.
Only if value = old default value (default)

Only fields which contain the old default value are overwritten with the new default
value. Values which you have already changed from the old default remain un-
changed.
Overwrite changed values only

If you use this option, only values that have currently been changed in the configur-
ation are transferred to the allowance.
Example:
If only the values for G&A have been changed, only the values for GC are trans-
ferred to the allowance.
If other values, e.g. values for G&A, were previously changed with the option Not
apply, they will not be changed in the allowance.
Overwrite all
All existing values are overwritten with the new default values.
Click OK to confirm the selection.

1.2 Allowances (property)

WARNING
The following descriptions require knowledge of Direct cost markups and price
calculation as well as Determining the direct cost markups (DCMs). Please
make yourself thoroughly familiar with the procedures described there before
starting specific work with the allowance methods.
name
Shows the name of the estimate document.
Template for price calculation

If you click on the arrow, a list field opens displaying the allowances visible in the
table below. At least one allowance must therefore have been defined for you to be
able to select an allowance. Select the allowance to be used for the price calcula-
tion. If you do not select an allowance, the prices are determined without direct
cost markups, i.e. costs = price.
You can define any number of allowance variants in a project, one of which is
selected for the price calculation.
Add
Click on this button to generate a new allowance (see 'Create New Allowance').
Open
Click on this button to open the allowance selected in the Allowance window for
editing (you can also do this by double-clicking on an allowance). See "Allowance
Method" for more on how to edit the allowance.
Copy
Click on this button to copy the selected allowance. The copy is inserted in the list
as an unnamed allowance.
Delete
Click on this button to delete the selected allowance.
WARNING
You cannot undo this action!
properties
Click on this button to open the Allowance Properties dialog box. You can edit the
properties of the selected allowances in this dialog box. See "Basic Data" (Config-
uration/Properties).

Print
Click on this button to open the dialog box for printing the selected allowance.
See also
2 Direct cost markups and price calculation [} 50]
2 Determining the direct cost markups (DCM) [} 52]
2 Print [} 47]
1.2.1 Creating an allowance

There are up to five different allowance methods available:
▪ Simple allowance
▪ Simple estimate-by-markup
▪ Areawise allowance with area balancing
▪ Areawise allowance without area balancing
▪ Areawise estimate by markup
The two methods Simple Allowance and Simple Estimate by Markup are part of the
licence for the Estimate module. The remaining allowance methods are only avail-
able with the Enhanced Allowance licence.
a) In the System Options you can determine which allowance methods are
offered here (Estimate - Allowances - Allowance Methods).
b) Simple Allowance is always part of the licence for the estimate.
c) However, Areawise Allowance is part of a separate licence.
Creating an allowance
1. Select the estimate document in the structure of the project alternative.
2. Activate the Allowances property.
3. Click Add.
Since the creation of an allowance requires an evaluation of the cost details,
the program displays a message to this effect.
Click OK to confirm this.
4. If you have set in the System Options that several allowance methods should
be available for selection, the New Allowance dialog box is displayed. Here, se-
lect the allowance method.
– simple allowance
– allowance areawise
If only one allowance method is available, a new allowance is immediately cre-
ated using the available method.
Select the desired method.
5. Click OK.
The selection is inserted with the description Unnamed Allowance in the win-
dow of defined allowances.

You can change the name of the allowance by selecting it and pressing <F2>. De-
lete the existing text and enter the desired description.
1.3 Select multiple cost codes

Additional cost codes can be added in the allowance beneath the major cost codes
level in order to assign other surcharges to them. This allows you to insert multiple
cost codes in a single step.
Insert new cost codes (select multiple individual entries)

1. Right-click on the cost codes table for the allowance.
2. Click New in the context menu. The Cost Codes dialog opens.
3. Hold down Ctrl to select multiple (subordinate) cost codes.
4. Click OK.
5. Click to confirm the prompt to calculate the totals.
The subordinate cost codes are ordered in the table according to their place in the
cost code structure.
Insert new cost codes (select multiple entries in a section)

1. Right-click on the cost codes table for the allowance.
2. Click New in the context menu. The Cost Codes dialog opens.
3. Hold down Shift to select a contiguous section of multiple cost codes. All cost
codes between the first and second click are selected.
4. Click OK.
5. Click to confirm the prompt to calculate the totals.
The subordinate cost codes are ordered in the table according to their place in the
1.4 Hierarchical cost codes table

The cost codes table in the allowance is displayed hierarchically according to the
Only cost odes with costs totals are not equal zero are indicated.
Features
The following allowance feature must be considered when displaying the cost
totals (DJC and GC):
▪ The costs total which is shown on a hierarchy is not the complete costs total of
this hierarchy. It is only the total of the direct costs of this hierarchy and all sub-
ordinated shares which were not displayed explicitly!
▪ This type of representation is important for the entry of the markups!
Entered markups have an effect only on the amounts shown in the same line.
This means, for example:

– The major cost code is generally surcharged at 10% AGB. This applies to
Cost Code 2 itself and all subordinate cost codes that are not explicitly
shown in this dialog.
– Only the cost items 21 and 24 from this range with (with 8%).
▪ The total of all costs shown in the column is the project grand total.
▪ You can also select multiple cost codes at once to delete them from under-
neath the major cost code level.
Delete cost code lines in cost codes table

Major cost codes lines cannot be deleted from the table.
The program will display an appropriate message.

Allowance configuration
2 Allowance configuration
In the allowance configuration in the Master project, you can set the defaults for a
new allowance in the project.
Open the Allowance Configuration document in Configurations in the project struc-
ture.
Basic Data is displayed.
When you create a new project, the allowance configuration set here is copied into
the new project.
Structure view of allowance configuration procedure

The data of the allowance configuration forms the basis for the "internal" configura-
tion of the allowance(s) in the estimate document. The lines in the cost code table
are "filled in" according to the configuration.
In the System Options you can set whether the allowance configuration should
be visible in the project or not (Estimate - Allowance - Basic Data).
2.1 Basic data (configuration/properties).

In Basic Data in the Allowance Configuration and the Properties of the allowance,
essentially identical functions are managed.
Name
The Allowance Configuration entry is shown here in the Allowance Configuration.
This entry cannot be changed.
The name of the allowance is shown here in the Properties of the allowance. You
can change the name here, if required.

With Markup Breakdown

In addition to the percentages, the maximum possible portions (with code and de-
scription), separated into own third-party work, can be defined in the allowance
configuration. You make these settings in the other tabs of the Allowances Config-
uration.
Type
Only for the Properties of the Allowance window.
Shows the allowance type according to your selection when creating the allowance
In the Job Estimate, main tables (positions) as well as in the element tables, the al-
lowance values for GC, AM, R&P, G&A can be displayed. This applies to the fol-
lowing allowance types:
Allowance method Tender Execution

Simple allowance – single step - -
Simple allowance – two step x x
Simple estimate-by-markup – single step x x
Simple estimate-by-markup – two step x x
Estimate-by-markup areawise – single step x x
Estimate-by-markup areawise – two step x x
Allowance areawise with area balancing – single - -
step
Allowance areawise with area balancing – two x x
step
Allowance areawise without area balancing – - -
single step
Allowance areawise without area balancing – x x
two step
In the total job cost evaluation, the values for GC, G&A, R&P and AM can be out-
put in the format blocks of the item list (item and approach line). To do this, activate
in the Print Options, tab Values, section Planned G&A/Planned AM, the option
Analog Allowance.
Properties of the allowance

The following functions are available in this group:
▪ Balance difference from FP-Items (items with fixed price)
If this function is activated, the allowance is set so that differences from manu-
ally set fixed prices in relation to calculated prices are considered as part of the
total amount for G&A/R+P/AM and are balanced in DCMs for the remaining
items. This can still be individually selected in the allowance; from here, it is
only a suggestion for the standard working method of the allowance. Details on
this can be found under "Unequal markups for G&A/R+P" in the two-step allow-
ance.

▪ Single-step Allowance
Only for the Properties of the Allowance window.
Here, you can specify whether the allowance is single-step or two-step. The dif-
ference between the single-step and the two-step allowance is described in
'Determining the direct cost markups (DCM)'.
If the type of the area-wide allowance has been selected, then it can still be set
so that the DCMs for GC and G&A/R+P/AM are combined, i.e. so that it be-
haves like the single-step allowance in post-processing (see "Interventions in
the unit rates and balancing of the deficits"). However, this selection can still be
made individually in the open allowance; here, it is only a suggestion.
Details on this can be found under "Combined or separate post-processing of
the DCMs".
▪ Recalculate direct job costs after adding or deleting a cost code
This function recalculates the DJCs if you add or delete a cost code. If you de-
activate this function, no recalculation occurs.
▪ DCM based on WQ/AQ Quantity
The allowance procedures can calculate the DCMs based on BoQ or AQ
quantities (see "Unequal markups for G&A/R+P" in the two-step allowance).
However, this selection can still be made individually in the allowance; here, it
is only a suggestion.
▪ Conversion from G&&A, R&&P, AM
You can select various options from a selection list. The numerical values are
only symbolic in purpose.
– GA + AM + R+P: 8+3+2 = 8.00+2.00+3.00 = 13.00
– G&A+AM+RP: 8+3+2 = 8.00+3.00+ 2.22 = 13.22
– G&A+AM+RP: 8+3+2 = 13 / (100 - 13) = 14.94
– GA + AM + R+P: 8+3+2 = 8.70+3.09+2.04 = 13.83
– G&A+RP+AM: 8+2+3 = 11.11+3.00+0.33 = 14.44
– GA + AM + R+P: 8+3+2 = 8.00+3.00+2.27 = 13.27
– GA + AM + R+P: 8+3+2 = 8.00+3.24+2.27 = 13.51
– GA + AM + R+P: 8+3+2 = 8.00+3.34+2.27 = 13.61
– GA + AM + R+P: 8+3+2 = 8.00+3.24+2.22 = 13.46
Here, see also "Calculation of the amounts for G&A, R+P and AM, as well as
the DCM".
▪ Treat DW/T+M items like
Here you can select how the costs of the daywork items are included in the al-
lowance and with which DCMs (direct cost markups) the prices of the daywork
items are calculated. You can select the following options from a selection list:
– Standard item
Daywork item is treated like a standard item.
– Awarded Alternative Item
Daywork item is treated like an awarded alternative item.
– Optional Item with IT
Daywork item is treated like an optional item with IT.

Markups
The following fields are available to you here for the Allowance Configuration and
the Properties of the allowance:
▪ Factor GA
This %-rate is proposed as a markup for general and administration costs.
▪ Factor AM
This %-rate is proposed as additional markup.
▪ Factor R+P
This %-rate is proposed as a markup for risk and profit.
You can change these values for the currently selected allowance (variant) in
the Properties of the allowance.
(Allowances Configuration dialog box)

Here, enter the markup rates for G&A, R+P and AM as specified by the company
for the estimate, separated according to in-house work and subcontractor services.
These are markup rates (not DCMs!) which are uniform for all cost codes (here,
see "Calculation of the amounts for G&A, R+P and AM, as well as the DCM").
Non-uniform markup rates would be due to entries in the allowance of a template
project, which is then selected as a template project for subsequent projects.
AM stands for Additional Markup. It can be used, for example, to specify technical
costs separately from general and administrative costs (G&A).
Please note the following:

a) The markup rates entered here are proposed in the allowance but can be
changed there.
b) The selection in the field Conversion from G&A, R+P, AM determines
whether the entered markup rates are based on TJC or turnover.
(Properties dialog box of the allowance)

Here, enter the markup rates for G&A, R+P and AM which are to be used for calcu-
lating the corresponding amounts to be allocated, separated according to in-house
work and subcontractor services. Here, enter the markup rates for G&A, R+P and
AM which are to be used for calculating the corresponding amounts to be alloc-
ated, separated according to in-house work and subcontractor services. The first
column, In-house Work, is a value which is proposed for all costs codes which do
not have the characteristic Subcontractor Services. The second column is a value
which is proposed for major costs codes which have the characteristic Subcon-
tractor Services.
If you have changed default values for the markup rates and clicked on the OK but-
ton, the Adopt Default Values dialog box appears. The first column, In-house Work,
is a value which is proposed for all costs codes which do not have the character-
istic Subcontractor Services.

OK and Cancel are not available to you in the Allowance Configuration. The val-
ues of the allowance configuration are accepted when you close the window.
See also
2 Unequal markups for GA/R+P in the two-step allowance [} 61]
2 Interventions in the unit rates and balancing of the deficits [} 56]
2 Combined or separate post-processing of the DCMs [} 67]
2 GA + AM + R+P: 8+3+2 = 8.00+2.00+3.00 = 13.00 [} 78]
2 G&A+AM+RP: 8+3+2 = 8.00+3.00+ 2.22 = 13.22 [} 78]
2 G&A+AM+RP: 8+3+2 = 13 / (100 - 13) = 14.94 [} 77]
2 GA + AM + R+P: 8+3+2 = 8.70+3.09+2.04 = 13.83 [} 77]
2 G&A+RP+AM: 8+2+3 = 11.11+3.00+0.33 = 14.44 [} 77]
2 GA + AM + R+P: 8+3+2 = 8.00+3.00+2.27 = 13.27 [} 76]
2 GA + AM + R+P: 8+3+2 = 8.00+3.24+2.27 = 13.51 [} 76]
2 GA + AM + R+P: 8+3+2 = 8.00+3.34+2.27 = 13.61 [} 76]
2 GA + AM + R+P: 8+3+2 = 8.00+3.24+2.22 = 13.46 [} 73]
2 Calculation of the amounts for GAs, R+P and AM, as well as the DCM [} 73]
2 Allowance with markup splitting [} 43]
2.2 Cost Portions

This is where you can create the cost portions to be used in the allowance. The
numbering in the Code field is only used for sorting in the display.
After creation of the cost portions, the cost codes must be assigned to the cost por-
tions for allowance in the cost code catalog.

Allowance method
3 Allowance method
The following descriptions require knowledge of "Direct cost markups and price
calculation" as well as "Determining the direct cost markups (DCMs)". In some
places, references are made to the corresponding sections of the theoretical ex-
planations.
You can edit the allowance via Allowances in the properties of the estimate docu-
ments. There, select the created allocation that you want to edit and click Open (al-
ternatively: double-click on an entry).
An allowance section is a set of BoQ items. Each allowance section in a main BoQ
can receive different final markups. The allowance sections are defined by ranges
of reference numbers. Following allowance methods are available:
▪ Areawise allowance without area balancing
▪ Areawise allowance with area balancing
▪ Areawise estimate by markup
In addition to these standard procedures, you can link BoQ items to flags of an
classification catalog and thus use the following allowance methods:
▪ Allowance areawise without Area Balancing via Classifications
▪ Allowance areawise with Area Balancing via Classifications
▪ Estimate-by-Markup areawise via Classifications
See also
3.1 Calculation of the unit prices

The DCMs of the activated allowance are used for calculating the unit rates. These
unit rates are already visible in the Estimate dialog box, assuming the cost estim-
ate is complete and the allowance has been processed.
If changes are made in the cost estimate, then the unit rates are first calculated
and displayed there due to the present state of the DCM. These DCMs do not
change at first, i.e. the displayed prices do not correspond to the final state, at
least for the estimate using the grand total, since changes in the cost estimate
in turn result in new DCMs. However, the DCMs are only updated if either the
allowance is reopened or recalculated or if the tender is printed. In the latter
case, the activated allowance is automatically calculated before the unit rates
are calculated.
See also

Allowance method
3.2 Allowance method with allowance area
3.2.1 Areawise allowance without area balancing

In the areawise allowance without area balancing, the total allowance can be di-
vided into desired areas for the allowance. This is done by selecting item areas or
even individual items. To this extent, the procedure is the same as the procedure
for "area-wide allowance with area balancing". Although the areas of the BoQ to be
submitted are prepared here in order to assign certain portions of the GCs to the
individual areas. Here, the GC portions are either determined via percentages
based on the total GCs, or the GCs are split into areas so that a certain GC area
can be assigned to a certain BoQ area. The smallest possible unit in the BoQ and
GCs is the individual item.
Depending on the area definition and the assignment of the GCs, each area of the
BoQ to be submitted in the allowance behaves like a self-contained subproject.
The calculation algorithms of the area-wide allowance thus apply in each area,
without use of the areas. There is no balancing of allowance amounts between the
areas.
See also
2 Basic information on the area-wide allowance [} 54]
2 Areawise allowance with area balancing [} 20]
3.2.1.1 Editing the markups and DCMs

Each major BoQ area is now a self-contained subproject with its own GCs. In BoQ
Areas, the DJCs, GCs, markups and DCMs are shown for the major BoQ area se-
lected at the top. This also includes the Remaining area.
WARNING
In Allowance, the respective table only shows the values of the major BoQ area
Remaining. The totals visible in the upper part of the window are always based
on the entire project.
See also
2 Table of markups and DCMs in the two-step allowance [} 28]
3.2.1.2 Assignment of the GC sections to the major BoQ areas

Once the GC sections have been defined, they must be assigned in Major BoQ-
Sections. You will now see additional columns for the defined GC sections in the
Allowance sections table, where before only the GC Remaining Area was visible
for the GCs on the right-hand side. If no GC sections were defined, all you see is
the GC Remaining Area column.

Allowance method
3.2 Allowance method with allowance area
3.2.1 Areawise allowance without area balancing

In the areawise allowance without area balancing, the total allowance can be di-
even individual items. To this extent, the procedure is the same as the procedure
for "area-wide allowance with area balancing". Although the areas of the BoQ to be
submitted are prepared here in order to assign certain portions of the GCs to the
individual areas. Here, the GC portions are either determined via percentages
based on the total GCs, or the GCs are split into areas so that a certain GC area
can be assigned to a certain BoQ area. The smallest possible unit in the BoQ and
GCs is the individual item.
The calculation algorithms of the area-wide allowance thus apply in each area,
without use of the areas. There is no balancing of allowance amounts between the
areas.
See also
3.2.1.1 Editing the markups and DCMs

Each major BoQ area is now a self-contained subproject with its own GCs. In BoQ
Areas, the DJCs, GCs, markups and DCMs are shown for the major BoQ area se-
lected at the top. This also includes the Remaining area.
WARNING
In Allowance, the respective table only shows the values of the major BoQ area
Remaining. The totals visible in the upper part of the window are always based
on the entire project.
See also
3.2.1.2 Assignment of the GC sections to the major BoQ areas

Once the GC sections have been defined, they must be assigned in Major BoQ-
Sections. You will now see additional columns for the defined GC sections in the
Allowance sections table, where before only the GC Remaining Area was visible
for the GCs on the right-hand side. If no GC sections were defined, all you see is
the GC Remaining Area column.

Allowance method
3.2.2 Areawise allowance with area balancing

In the so-called area-wide allowance with area balancing, the total allowance can
be divided into desired areas for the allowance. This is done by selecting item
areas or even individual items. For individual areas, the direct cost markups can
either be set in all cost codes or only in particular cost codes. The program auto-
matically converts all other "open" direct cost markups by subtracting the partial al-
lowance amounts assigned specifically via predefined DCMs from the total allow-
ance amount, and distributing the remainder based on the costs of the cost codes
in all areas which have not yet been specifically marked up. This principle has
already been explained in connection with predefined DCMs on certain cost codes.
Whereas the determination of costs is carried out with regard to the respective
costs for the entire project, specific negotiations regarding selected BoQ areas can
be made here.
BoQ Areas in the area-wide allowance with area balancing appears largely the
same as the one in area-wide allowance without area balancing.
Only the two additional tabs are different.
See also
2 Definition of major BoQ areas and assignment of BoQ areas [} 22]
2 Define allowance section [} 23]
2 Assign BoQ sections [} 23]
3.2.2.1 Markups on GCs

The markups for GA, R+P and AM were able to be individually determined in the
major BoQ sections. If they should also be individually determined for GCs – which
is an extreme exception – this is done in Markups on GCs.
See also
3.2.2.2 Editing the markups and DCMs for major BoQ areas
The markups for GA, R+P and AM can be individually entered for each major BoQ
section in BoQ Areas of the lower table, if this makes sense. The program initially
suggests the values from the Allowance in all areas. These markups are normally
left uniform across all areas.
In terms of building construction, different markup rates for GA, R+P and AM
only make sense for areas, the turnover of which is followed separately later
and with different rates for GA.
Different rates for GA, R+P and AM are not as important as defining fixed DCMs in
individual areas, either for all cost codes or only for particular ones. In this way, for
example, you can define a major BoQ area with all services which are executed

Allowance method
3.2.2 Areawise allowance with area balancing

In the so-called area-wide allowance with area balancing, the total allowance can
be divided into desired areas for the allowance. This is done by selecting item
areas or even individual items. For individual areas, the direct cost markups can
either be set in all cost codes or only in particular cost codes. The program auto-
matically converts all other "open" direct cost markups by subtracting the partial al-
lowance amounts assigned specifically via predefined DCMs from the total allow-
ance amount, and distributing the remainder based on the costs of the cost codes
in all areas which have not yet been specifically marked up. This principle has
already been explained in connection with predefined DCMs on certain cost codes.
Whereas the determination of costs is carried out with regard to the respective
costs for the entire project, specific negotiations regarding selected BoQ areas can
be made here.
BoQ Areas in the area-wide allowance with area balancing appears largely the
same as the one in area-wide allowance without area balancing.
Only the two additional tabs are different.
See also
2 Definition of major BoQ areas and assignment of BoQ areas [} 22]
2 Define allowance section [} 23]
2 Assign BoQ sections [} 23]
3.2.2.1 Markups on GCs

The markups for GA, R+P and AM were able to be individually determined in the
major BoQ sections. If they should also be individually determined for GCs – which
is an extreme exception – this is done in Markups on GCs.
See also
3.2.2.2 Editing the markups and DCMs for major BoQ areas
The markups for GA, R+P and AM can be individually entered for each major BoQ
section in BoQ Areas of the lower table, if this makes sense. The program initially
suggests the values from the Allowance in all areas. These markups are normally
left uniform across all areas.
In terms of building construction, different markup rates for GA, R+P and AM
only make sense for areas, the turnover of which is followed separately later
and with different rates for GA.
Different rates for GA, R+P and AM are not as important as defining fixed DCMs in
individual areas, either for all cost codes or only for particular ones. In this way, for
example, you can define a major BoQ area with all services which are executed

Allowance method
early on, and assign particularly high DCMs to this area. This would have the effect
that the liquidity of the construction site would be improved at the start, without the
grand total changing.
The DCM is specified separately for GA, R+P, AM and GC. From this, the program
calculates the allowance amount, which is then fixed and assigned. The remaining
allowance amount of the entire project is now distributed to all cost codes of all
areas where no fixed DCMs have been defined. The calculation is balanced
between the major BoQ areas. The name for this variant of the allowance was de-
rived based on this.
For editing the markups for GA, R+P and AM and the DCMs, see the table of
markups and DCMs in the two-step allowance.
You are also shown the DCMs on AA in the table of allowance sections. There, you
can define fixed DCMs on AAs, which of course only makes sense in the allowance
sections where there is an amount for AA.
WARNING
In Allowance the table of DCMs only shows the values of the major BoQ
areaRemaining . The totals visible in the upper part of the window are always
based on the entire project.
See also
3.2.2.3 GC area for optional items

If you have estimated GCs specially for optional and daywork items, then the pro-
gram only recognizes this if you have defined the respective GC items as a GC
area. If they are not part of a GC area for optional items, these GCs are treated like
normal GCs allocated to standard items. To create a GC area for optional items,
activate the function Calculate GC factors for optional items under Start | Actions |
Allowance Options. If this is not the case, the program displays a message to this
effect when creating a area.
Click OK, the desired option is set. If this is not the case, the program displays a
message to this effect when creating a area.

Allowance method

a) If you delete the area again, optional and daywork items are treated like
standard items again.
b) You must activate the function Calculate GC for optional items if you want to
select a GC area as GC for optional items. In this case, the GCs for optional
items are allocated to the costs of the optional and daywork items and a cor-
responding DCM is calculated.
c) In the lower part of the window (CoC table with GC), you will always see the
values of the GC area selected in the Allowance sections table.
d) If you reset the switch Calculate GC factors for optional items, the program
will show you a message to this effect.
ð If you click OK, the GCs with the characteristic For optional items are ig-
nored(!) in the project, since they are still selected in the GC areas but
have been excluded from the calculation. If you reactivate the function,
optional GCs are allocated to the optional and daywork items again.
3.2.3 Major BoQ areas in the area-wide allowance

Optional allowance areas can be defined in the area-wide allowance.
If no areas are defined, the entire project is the allowance area. In this case, you
only work in Allowance; the DJCs in the markup table are then also the values
from the entire project.
See also
2 Markups on GCs [} 20]
2 GC area for optional items [} 21]
3.2.3.1 Definition of major BoQ areas and assignment of BoQ

areas
The following description applies to both methods of the two-step allowance:
▪ Area-wide allowance with area balancing
▪ Area-wide allowance without area balancing
Allowance sections are sections of the BoQ to be submitted in which either special
markups apply for GA, R+P and AM and/or in which specific and different DCMs
are calculated.
The definition of allowance sections consists of two steps:
1. Define allowance section
2. Assign BoQ sections
See also

Allowance method
3.2.3.1.1 Define allowance section
The sections of the BoQ which are not assigned to specially defined allowance
sections automatically belong to the Remaining allowance section, which al-
ways exists. If no special allowance sections are defined, the Remaining allow-
ance section is the entire BoQ.
Defining a section in the BoQ

1. Click on Major BoQ sections in the open allowance. At first, you will only see an
allowance area with the name Remaining here. Remaining is the allowance
area without the BoQ areas assigned to other allowance areas. If there is no
additional allowance area, the entire project is in Remaining.
2. Place the cursor in the Allowance section table.
3. Click New in the context menu. A new area is created, with the initial descrip-
tion Unnamed area.
4. Enter the name of the area, e.g. Earthworks with AQ quantity < 90%.
BoQ areas must now be assigned to this allowance section.
3.2.3.1.2 Assign BoQ sections

If you have defined an allowance area, you must now determine which reference
numbers of the BoQ should belong to this area.
Assigning BoQ areas

1. Expand the BoQ structure up to the 1st division or item which should belong to
the area, and click on this BoQ element.
2. Click >>New in Major BoQ Sections. A (first) table line is created. The selected
reference number in the BoQ structure is automatically adopted in the From
Ref. No. column.
Alternatively, you can also click New in the context menu, although in this case,
you must manually enter the reference number of the desired BoQ element in
the column From Ref. No. via the >>From Ref. No. button.
3. In the BoQ structure, click on the last BoQ element of the first closed areas
(From Ref. No / To Ref. No).
4. Click >>To Ref. No.. The Ref. No. is adopted in the To Ref. No. column by the
program.
If the first reference number is greater than the last reference number, you will
be shown a message to this effect. In this case, you must correct this, either by
selecting the correct "From Ref. No." and clicking From Ref. No., or selecting
the correct "To Ref. No." and clicking To Ref. No.. You can thus also change a
defined area at any time.
5. If further BoQ areas belong to the allowance area defined at the top, then se-
lect the first object of the next BoQ area and proceed as in steps 3 to 4. This
results in further BoQ areas which all belong to the defined allowance area.

Allowance method
If you name reference numbers in another BoQ area which are already con-
tained in another BoQ area of the same allowance area or a different allowance
area, you are shown a message to this effect ("overlapping areas"). You must
then correct this.
6. To obtain the totals for the allowance area, click Start | Actions | Calculate
totals. The recalculation message is then shown. You will then find the DJCs of
the assigned BoQ areas under the new allowance area. The same DJCs are
calculated from the Remaining area at the same time.
See also
2 Deleting major BoQ areas [} 24]
3.2.3.1.3 Deleting major BoQ areas
Deleting an BoQ area

1. Select the respective line in the BoQ sections table.
2. Click Delete in the context menu.
Deleting an entire allowance section

1. Select the allowance section in the Allowance sections table.
2. Click Delete in the context menu. A confirmation query appears for deletion.
3. If you confirm this with Yes, the program requires confirmation for the recalcu-
lating of the totals.
3.2.3.2 Notes on functions and options

a) In the lower part of the window (DJCs and DCMs), you will always see the
values of the allowance section selected in the table of allowance sections
at the top left.
b) If you use Start | Actions | Display Totals or <F7> in Major BoQ Areas, then
the window with the totals is shown for the BoQ section selected above.
c) If Main BoQ Areas is active, all other functions under the Start | Actions also
only refer to the allowance area selected there.(This is not valid for the func-
tions under Allowance Options.)
d) If Allowance is active and the functions are started there, they refer to all al-
lowance sections!
e) The Balance Difference For FP Items option has a uniform effect in the en-
tire project, regardless of where it is activated or deactivated. The same ap-
plies to all other options under Start | Actions | Options.

Allowance method
3.2.4 Function in both allowance procedures
3.2.4.1 Start | Actions | Options
A tick in front of the entry indicates that the function is activated.
3.2.4.1.1 Calculate GC Factors for Optional Items (two-step allowance

only)
Available in 2-step allowance only.
As a requirement, a GC area must be defined for optional items and this must be
selected as the deciding area for optional items. In this case, GCs for optional
items are calculated from the allowance of the optional GCs to the costs of the op-
tional and daywork items.
See also
2 Areawise allowance without area balancing [} 17]
3.2.4.1.2 Distribute GC area equally to major BoQ area
This function is only available to you in the area-wide allowance without area
balancing.
See also
3.2.4.1.3 GCs via estimate by markup

This function is only available to you in area-wide allowance.
If you activate this function, calculated DCMs for GCs are set to 0.00, i.e. the pro-
gram ignores the GCs estimated in the GC-BoQ. You must define fixed DCMs for
GCs. If you deactivate this function, the estimated GCs become active again.
3.2.4.1.4 Diff. Balance FP item
Also available in the context menu.
If you activate this function, differences in items with fixed prices in relation to the
calculated UR are offset against the amount of the direct cost markup, i.e. the cor-
rected DCM is allocated. In this case, fixed prices in standard items have no effect
on the tender total.

Allowance method
If you deactivate this function, the calculated balancing is removed again, i.e. the
original DCM is allocated again and the fixed price will change the tender total.
How this function is preset when the allowance is opened depends on the setting
under Properties (in Allowances in the properties of the estimate).
3.2.4.2 Start | Actions
3.2.4.2.1 Tender total according to BoQ
This function is only available if the allowance is activated.
Shows the tender total based on the calculation of the Tender list, i.e. calculates
from the total of the ITs. There are differences in the rounding of the unit rates of
the items between the tender total according to the allowance and the tender total
from the total of the ITs. The allowance calculates the tender total via Total costs +
direct cost markups, i.e. without intermediate rounding.
You will be asked whether the determined prices should be transferred to the BoQ.
▪ If you confirm with Yes, the currently determined prices are transferred to the
BoQ.
▪ If you answer with No, the prices are not transferred to the BoQ.
WARNING
If the prices in the BoQ are not up-to-date, this can lead to an incorrect result.
You should therefore transfer the data to ensure that the BoQ always contains
the current price.
The Tender Total According To BoQ dialog box is shown for information purposes.
3.2.4.2.1.1 Tender Total According To BoQ (dialog box)

In this dialog box, you are shown the tender totals for BoQ quantities and AQ
quantities, both with and without alternative items (A-item) and optional items (O-
item).
3.2.4.2.2 Estimated labour rates

Displays an additional window which displays the estimated labour rates.
In this window, you are shown an overview of the estimated labour rates used. You
are shown the following information:
▪ Code
▪ Description
▪ Crew Mix
▪ Est. Labour Rate
▪ Currency unit (CUR)

Allowance method
3.2.4.2.3 Display totals
You can also activate this function with <F7> or via the context menu.
The extended totals display is shown.
3.2.4.2.4 Release markups for optional items

If fixed DCMs were entered for the optional items, these are removed again. The
program shows a corresponding query and waits for your confirmation.
The DCMs of the standard items are entered in the last column of the CoC table
again.
3.2.4.2.5 Set markups for optional items to zero

If DCMs have been determined for optional items, these are set to 0.00 again. The
program shows a corresponding query and waits for your confirmation.
If you confirm with OK, both the predefined DCMs on optional items and the calcu-
lated DCMs are set to 0.00.
If the calculation of the GC-DCMs for optional items (Calculate GC Factors For
Optional Items) is activated under Options (only possible in Extended Allow-
ance), the command cannot be implemented. The program shows a corres-
ponding message.
3.2.4.2.6 Activate
Activates the allowance for the calculation of the tender prices. At the same time,
this allowance is entered as the active allowance in Allowance of the base data of
the estimate.
3.2.4.2.7 Calculate totals
Also available in the context menu.
Recalculates the allowance. Since the analysis of the cost details may take some
time, you will be shown a message to this effect. You may confirm or cancel.

Allowance method

a) If you make changes in the cost estimate when the allowance is open, the
values in this open allowance are not automatically updated. To do this, you
must click Start | Actions | Calculate totals. However, the current estimate
status is always taken into consideration when an allowance is opened.
b) When the tender is printed, the active allowance is always automatically re-
calculated, i.e. the current DCMs are always calculated in the background
and included in the price calculation.
3.2.5 Table of markups and DCMs in the two-step allowance
The specified markups for a cost code apply to all subordinate cost codes, until
new markups are set for a subordinate cost code.
Amounts and/or values are shown/entered in the lower table, sorted by (major)
cost code.
You can insert a new line via Start | New or New in the context menu, and insert
any new cost code subordinate to a major cost code by directly entering the code
or via <F3>.
You can also delete lines with subordinate CoCs.
CoC
Shows the code of the cost code. Initially, all major cost codes are shown.
Description
Shows the description of the cost code.
DJC
Shows the total of the individual costs of the work items per cost code. Only the
costs which are part of the allowance base are displayed.
GC
Shows the total of the estimated general conditions per cost code.
G&A [%]
Markup rate for general and administrative costs from the tender total or from the
total job costs, depending on the internal setting of the program. You can change
the value. The amount to be allocated for general and administrative costs is calcu-
lated with this markup rate.
R+P [%]
Markup rate for risk and profit from the tender total or from the total job costs, de-
pending on the internal setting of the program. You can change the value. The
amount to be allocated for risk and profit is calculated with this markup rate.

Allowance method
AM [%]
Markup rate for additional markup from the tender total or from the total job costs,
depending on the internal setting of the program. You can change the value. The
amount to be allocated for additional markup (e.g. for technical costs) is calculated
with this markup rate.
GRA [%]
Shows the combined percentage for general and administrative costs, risk and
profit and additional markup (GA[%] + RP[%] + AM[%]) on the total job costs. The
combined percentage is calculated according to the algorithm specified in the
Properties dialog box.
Calculated markup for GRA [%]

Here, you can specify a fixed percentage per cost code for the direct cost markup
(DCM) for GC+RP+AM. In the cost code, this value is then dominant over the cal-
culated DCM in the column of the calculated DCM (M. BGK[%]) and is transferred
there. If a fixed DCM has not been entered for each cost code with costs, the pro-
gram calculates the remaining DCMs for GC in such a way that the tender total of
standard items does not change.
Consider the following:

a) If you also enter a fixed DCM for the last CoC with costs, you will receive a
message saying that all DCMs have been predefined and a deficit < > 0 has
thus resulted.
b) The value 0.00 is a fixed, predefined value.
Only an empty field re-enables calculation of the markups!
Markup for GRA [%]

Shows the DCM calculated by the program for GA + RP + AM per cost code.
Calculated markup for GC [%]

Here, you can specify a fixed percentage per cost code for the direct cost markup
(DCM) for GCs. In the cost code, this value is then dominant over the calculated
DCM in the column of the calculated DCM (allowance GC) and is transferred there.
If a fixed DCM has not been entered for each cost code with costs, the program
calculates the remaining allowance DCMs in such a way that the tender total of
standard items does not change.
Consider the following:

a) If you also enter a fixed DCM for the last CoC with costs, you will receive a
message saying that all DCMs have been predefined and a deficit < > 0 has
thus resulted.
b) The values for the estimate by markup are also entered in this column.
c) The value 0.00 is a fixed, predefined value.
Only an empty field re-enables calculation of the markups!

Allowance method
Markup for GC [%]

Shows the DCM for GC calculated by the program per cost code.
Total markup [%]

Shows the DCM calculated by the program per cost code.
DJC (O)
DJC of the optional items and the daywork items.
Calculated markup for optional items for GC [%]

Here, you can specify a fixed percentage per cost code (DCM) for GC for the op-
tional and daywork items. If you do not enter a value, the costs of the optional
items receive the DCM of the standard items.
Markup for optional items for GC [%]

Shows the DCM for GC calculated by the program per cost code for standard
items, which is also suggested for the optional items.
WARNING
All non-standard items receive the DCM for GA + RP + AM of the standard
items. Only the DCM for GC on optional and daywork items can be influenced.
See also
2 Predefined DCMs on any cost codes [} 66]
2 Evaluation of the direct job costs (DJC) [} 81]
2 DCMs for non-standard items without ITs in the single-step allowance [} 53]
2 GCs for optional items in the advanced allowance [} 52]
3.2.5.1 Create or delete cost code line

You can create or delete new lines in the CoC table.
Create cost code line

1. Position the cursor in the table.
2. Click New in the context menu. A new line is created at the end of the table.
3. Enter a subordinate cost code (to any major CoC).
4. Confirm the entry with <Enter>.
The program now shows a message and waits for confirmation before recalcu-
lating the totals:
– Yes
The DJCs are immediately calculated according to the new distribution to
marked-up cost codes.

Allowance method
– No
For the major CoC, the costs are then reduced to the costs of the new line.
In this case, you must click Start | Actions | Calculate totals after accepting
all new marked-up cost codes.
The CoC is inserted in the line after the major CoC to which it belongs. For the ma-
jor CoC, the costs are then reduced to the costs of the new line.
Delete cost code line

1. Select the cost code line to be deleted.
2. Click Delete in the context menu.
A confirmation query asks whether you want to delete the object.
Yes
The line is deleted.
Only the line is deleted, the cost code itself is not deleted.
Here too, the program requires confirmation before recalculating the totals:
– If you confirm the query with Yes, the DJCs are immediately calculated ac-
cording to the new distribution to marked-up cost codes.
No
You must always click Start | Actions | Calculate totals after deleting the
marked-up cost codes.
You cannot delete a major cost code from the table.

If you attempt to remove such a line from the markup calculation, the program
displays a message to this effect.
3.2.6 Table of markups and DCMs in the single-step

allowance
The amounts and/or values are shown/entered in the CoC table, sorted by cost
code.
You can insert a new line via Start | New or New in the context menu, and insert
any new cost code subordinate to a major cost code by directly entering the code
or via <F3>.
You can also delete lines with subordinate CoCs.
CoC
Shows the code of the cost code. Initially, all major cost codes are shown.
The specified markups for a cost code apply to all subordinate cost codes, until
new markups are set for a subordinate cost code.
Description
Shows the description of the cost code.

Direct cost markups and price calculation
2 GA + AM + R+P: 8+3+2 = 8.00+2.00+3.00 = 13.00 [} 78]

2 G&A+AM+RP: 8+3+2 = 13 / (100 - 13) = 14.94 [} 77]
5.4.4.6.2 GA + AM + R+P: 8+3+2 = 8.00+3.34+2.27 = 13.61

For this method, the following applies:
▪ The total job costs are marked up with the markup rate for GA
▪ The total TJC + GA is marked up with the markup rate for AM
▪ The markup rate for AM relates to the total TJC + GA
▪ The TJC + GA + AM is marked up with the markup rate for R+P
▪ The markup rate for R+P relates to the tender total
The DCM is then determined as follows:
DCM% = (100% + GA%) + [100% +(AM% / (100% - AM%))] x [100% + (R+P% /
(100% - R+P%))]
GA=8%, R+P=2% and AM=3% gives:
DCM% = (100% + 8%) + [100% +(3% / (100% - 3%))] x [100% + (2% / (100% -
2%))] = 13.61%
5.4.4.6.3 GA + AM + R+P: 8+3+2 = 8.00+3.24+2.27 = 13.51

▪ The TJC + GA is marked up with the markup rate for AM
DCM% = (100% + GA%) + (100% + AM%) x [100% + (R+P% / (100% - R+P%))] -
100%
GA=8%, R+P=2% and AM=3% gives
DCM% = (100% + 8%) + (100% + 3%) x [100% + (2% / (100% - 2%))] - 100% =
13.51%
5.4.4.6.4 GA + AM + R+P: 8+3+2 = 8.00+3.00+2.27 = 13.27

▪ The total job costs are marked up with the markup rates for GA and AM
DCM% =
[100% +(GA% + AM%)] x [100% + (R+P% / (100% - R+P%))] - 100%
DCM% =
[100% +(8% + 3%)] x [100% + (2% / (100% - 2%))] - 100% = 13.27%

Allowance method
Total markup [%]

Shows the DCM calculated by the program per cost code.
DJC (O)
DJC of the optional items and the daywork items.
Total calculated markup for optional items [%]

Here, you can specify a fixed percentage per cost code (DCM) for GA + RP + AM +
GC for the optional and daywork items. If you do not enter a value, the costs of the
optional items receive the DCM of the standard items.
M(Tot.) Opt Items [%]

Shows the DCM calculated by the program per cost code for standard items, which
is also suggested for the optional items.
See also
2 Create or delete cost code line [} 30]
2 Evaluation of the direct job costs (DJC) [} 81]
2 DCMs for optional items in the single-step allowance [} 53]
2 GCs for optional items in the advanced allowance [} 52]
3.2.7 Displays in both allowance methods

The display is divided into three areas:
▪ Selection of quantity base
▪ Display of totals
▪ Table of markups and DCMs in the single-step allowance
In the upper part of the window, you can see the quantity base and currency unit
being used, as well as the totals results.
The lower part of the window contains the table with the fields for entering the
markups for GA/R+P/AM and for displaying calculated DCMs (direct cost
markups).
Please consider the following:

a) When opened, the program calculates the costs of the estimate. Depending
on the size of the project, this may take some time.
b) In the table of markups and DCMs in the two-step allowance, the allowance
data is subdivided.
See also
2 Table of markups and DCMs in the single-step allowance [} 31]

Allowance method

3.2.7.1 Selection of quantity base
Options
The following setting options are available to you via drop-down lists:
▪ Allowance based on BoQ quantities
▪ Display of totals for BoQ quantities
The DCMs are calculated based on the costs with BoQ quantities. All totals are
shown with these factors and based on the BoQ quantities. The tender can be
created with the DCMs and totals of this setting.
In this setting, the Display drop-down list is hidden and cannot be modified.
▪ Allowance based on AQ quantities

▪ Display of totals for BoQ quantities
The DCMs are calculated based on the costs with AQ quantities. The DCMs
are calculated based on the costs with AQ quantities. The tender can be cre-
ated with the DCMs and totals of this setting.
When you change from BoQ to AQ in the Allowance based on the program
shows a message informing you that the cost details must be re-valuated. This
process may take quite some time.
This also applies when changing from AQ back to BoQ.
WARNING
The setting of the active allowance present at this point is always included when
calculating the tender prices. If in doubt, check again whether you have set the
quantity base you actually want to use for calculating the DCMs in the first field.
▪ Allowance based on AQ quantities

▪ Display of totals for AQ quantities
The DCMs are calculated based on the costs with AQ quantities. The tender
total is determined with these factors and based on the AQ quantities. This
tender total is only a theoretical total for internal information purposes. The
tender itself cannot be generated in this way, since the tender must be submit-
ted based on the BoQ quantities.
If you close the allowance in this setting (both window lists set to AQ quantities),
then the calculation of the tender total for BoQ quantities becomes active again.

Allowance method
Single Step
Only for area-wide allowance
Enables to switch between single-step and two-step allowance.
FM on AA
Only for area-wide allowance.
The current valid percentage value for the remaining major BoQ area is shown
here.
CUR
The currency shown is normally the estimate currency in the properties of the es-
timate, unless you have changed the currency unit via Properties in Allowances.
3.2.7.2 Display of totals
Press <F7> to display the totals in a somewhat more expanded view.
The totals display is divided into multiple groups:

▪ Hours
▪ Costs
▪ Allowance
▪ Tender
3.2.7.2.1 Costs
DJC (normal)
Costs of standard items excl. items with the fixed price flag and surcharge-free
items.
DJC (FP)
Costs of standard items with fixed price flag (incl. FP + SF).
DJC (AM)
Costs of standard items with surcharge-free feature, but without items with FP + SF
feature.
GC
Costs estimated in the GC BoQ.
TJC
Sum of DJC (normal), DJC (FP), and DJC (GC) fields.
DJC (NonStd)
Costs of all non-standard items with IT.

Allowance method
DJC TOT 2
Sum of TJC and DJC (NonStd) fields.
DJC Itm w/o IT

Costs of all non-standard items without IT, but with quantity.
3.2.7.2.2 Hours
Hrs. (normal)
Costs for standard items excl. items with the fixed price flag and surcharge-free
items.
Hrs. (FP)
Hours for standard items with fixed price flag (incl. FP + SF).
Hrs. (nM)
Hours for/costs of standard items with surcharge-free feature, but without items
with FP + SF feature.
Hrs. GC
Hours estimated in the GC BoQ.
Hrs.-TOT 1
Sum of Hrs. (normal), Hrs. (FP), and Hrs. (GC) fields.
Hrs. (NonStd)
Hours for all non-standard items with IT.
Hrs.-TOT 2
Sum of Hrs. TOT 1 and Hrs. (NonStd) fields.
Hrs. Item w/o IT

Hours for all non-standard items without IT, but with quantity.
3.2.7.2.3 Allowance
For area-wide allowance with area balancing, there is a separate tab for areas with
the area evaluations.
AA
Total advanced allowance from the items.
GC (remaining)
Calculated GC minus AA.

Allowance method
GC
Calculated GC minus AA.
G&A
Total of general and administrative costs from allowance base DJC.
R&P + AM
Total risk & profit from the DJC of the allowance base + total additional markup
from the DJC of the allowance base (see calculation of the amounts for G&A, R&P
and AM, as well as the DCM).
Est. Allw
Estimated allowance amount based on the allowance base: GC + GA + RP + AM
Def. + MM
Total from:
Deficit from the prices of surcharge items
+ items with fixed price
+ total of the manual markups for the items.
Eff. allow.
Effective contained allowance amount, not taking into account the non-standard
items:
= Est. Allow. + Deficit (S-Items) + other Def.+ MM
See also
3.2.7.2.4 Tender
For area-wide allowance with area balancing, there is a separate tab for areas with
the area evaluations.
TJC (wo.nM,Inhouse)
Total job costs without the portions of the items with no markup and the costs with
the characteristic own amounts (see "Catalogs" documentation, costs from non-
standard items).
GA + RP + AM
Total of the corresponding values from the Allowance column
Inhouse + nM-Items
Total:
Costs with the flag Inhouse but without portions from no markup items
+DJC of all no markup items incl. FP + nM (see Documentation "Catalogs").

Allowance method
Total
Total of the corresponding values from the column Allowance
Def. + MM
= Def.(S-items) + other def. + MM (from the Allowance column)
T Total 1
Tender total without non-standard items with ITs
IT (NonStd)
Tender total of the non-standard items with IT (DJC + DCM)
T Total 2
Tender total incl. non-standard items with IT
3.2.7.2.5 Margin
For non-activated Allowances, it offers the Tender Total 2 sum. For activated Al-
lowances it offers the Total sum according to the BoQ. Also Costs are shown.
The difference is shown as the margin in amount and as a percentage in relation to
the costs and the tender total.
3.2.7.3 Extended totals display

The expanded totals view appears in a separate window. This window basically
contains the totals data from the Allowance window.
The expanded view is divided into groups:
▪ Hours
▪ Costs
▪ Allowance
▪ tender
3.2.7.3.1 Costs (expanded view)
DJC (Std)
Costs of standard items excl. items with the fixed price flag and surcharge-free
items.
DJC (FP)
Costs of standard items with fixed price flag (incl. FP + SF).
DJC-TOT-0
Sum of the two above values.

Allowance method
DJC (AM)
Costs of standard items with surcharge-free feature, but without items with FP +
AM feature.
DJC (N-Item)
GC
Costs estimated in the GC BoQ.
TJC
DJC (NonStd)
Costs of all non-standard items with IT.
DJC-TOT-2
DJC Itm w/o IT

Costs of all non-standard items without IT, but with quantity antecedent.
3.2.7.3.2 Hours (expanded view)
Hrs. (normal)
Costs for standard items excl. items with the fixed price flag and surcharge-free
items.
Hrs. FP
Hours for standard items with fixed price flag (incl. FP + FS).
Hrs-TOT-0
Hrs. (nM)
Hours for standard items with surcharge-free feature, but without items with FP +
FS feature.
Hours (n-item)
Hrs. GC
Hours estimated in the GC BoQ

Allowance method
Hrs-TOT-1
Hrs. (NonStd)
Hours for all non-standard items with IT.
Hrs-TOT-2
Hrs. Item w/o IT

Hours of all non-standard items without IT, but with quantity antecedent.
3.2.7.3.3 Allowance (expanded view)
AA
Total of the advanced allowance from the items
GC (remaining)
Estimated GCs minus AA
GC
Total of the estimated GCs
G&A
Total of general and administrative costs from DJC + GC
R&P
Total risk and profit from DJC + GC
AM
Total additional markup from DJC + GC
Est. Allw
Estimated allowance amount based on the allowance base: GC + GA + RP + AM
Deficit (surcharge item)

Deficit from the prices of surcharge items
Miscellaneous deficit
Deficit from items with fixed prices
MM
Total of the amounts entered in the manual markup field of the items

Allowance method
Actual allowance
Effective contained allowance amount without consideration of non-standard items
= Estimated allowance + Deficit (surcharge items) + Miscellaneous deficit + MM
See also
3.2.7.3.4 Tender (expanded view)
TJC (wo.nM,Inhouse)
Total job costs without the portions of the items with no markup and the costs with
the characteristic own amounts (see "Catalogs" documentation, costs from non-
standard items).
GA + RP + AM
Total of the corresponding values from the Allowance column
Total 1
DJC of all nM items

DJCs of all items with no markup including FP + nM
Inhouse work (w/o nM)

Total of the costs with the characteristic Own operations but without portions from
items with no markup (see "Catalogs" documentation).
Total 2
Sum of the three above values.
Total deficit
= Def.(S-items) + other def. + MM (from the Allowance column)
T Total 1
Tender total without non-standard items with ITs
IT (NonStd)
Tender total of the non-standard items with IT (DJC + DCM)
T Total 2
Tender total incl. non-standard items with IT

Allowance method
+ Discounts / Lumpsums
+ Rounding difference
Total of discounts and lump sums + total of rounding differences.
Tender total including non-standard items with ITs

Grand total of the tender according to BoQ.
3.2.8 Allowance by cost portions

In order to use the allowance by cost portions, you must carry out the following
steps:
1. Adjust system options
It may be necessary to release the Allowance Configuration document. You
can find this setting under System Options, Estimate | Allowance | Basic Data
Allowance, in the Allowance Configuration section.
2. Define the allowance configuration
This is where you can define the cost portions to be used in the allowance. You
can find the document in the project hierarchy, under Settings.
3. Adjust the cost code catalog
This is where you assign cost portions to the cost codes.
4. Assign classifications
Below the folder Catalogs you find the Classifications. Directly in the Classifica-
tions folder, you can assign the classification catalogs to be used (Catalog 1-4)
and the catalog for the Allowance.
5. Link classification catalog with estimate details
In the estimate, you can link items, sub-items and estimate details with the ele-
ments of the classification catalogs.
3.2.8.1 Cost portions in the cost code catalog

After creation of the cost portions in the Allowance configuration, the cost codes
must be assigned to the cost portions. You make this assignment in the Cost code
catalog.
The costs portion are the columns of the Allowance by cost portions. RIB iTWO
uses a classification catalog that can be created either in the master project or in
the project. The advantage of a classification catalog created in the master project
to be available in all new projects.
This assignment is made hierarchically and for performance reasons you should
also use the hierarchy. It is best if you define the cost portions of the allowance at
the highest hierarchy level. If you want to assign another cost portion at a lower
level, you can overwrite the default entry from the hierarchy.
Remember that these settings affect all projects that use this master project. For
existing projects, this assignment must be repeated if you want to use allow-
ance by cost portions.

Allowance method
3.2.8.2 Assign classification catalog

The costs portion are the columns of the Allowance by cost portions. RIB iTWO
uses a classification catalog that can be created either in the master project or in
the current project. The advantage of a classification catalog created in the master
project to be available in all new projects.
A classification catalog created in the master project provides the advantage that it
is available in all newly-created projects. You make this assignment in the project
structure, folder Catalogs, Folder Classification (catalog 1, 2, 3 or 4). We recom-
mend that you keep this assignment the same across all projects.
In order to select the correct catalog for the allowance, it is important that the cata-
log is also entered as the catalog for the Allowance.
3.2.8.3 Linking estimate details with the allowance

classification catalog
The classification catalog to be used for the allowance must be linked with the es-
timate details. To enable this, items, sub-items and estimate details can be linked;
it is not possible to link of BoQ levels or to the entire object model.
1. Select an element in the estimate.
2. Open Properties (item) and click on the Assignment tab.
3. Select the classification elements you want to link with the estimate element.
3.2.8.4 Using allowance by cost portions

When you have defined the cost portions for the allowance and linked them with
the estimate details, you can create the Allowance by cost portions.
The lines are set up in the same way as the classification catalog. Estimate details
that are not assigned to an allowance area are summarised in the first line in the
category *Unassigned*.
By default, four columns are generated for each cost portion. The columns show
the direct job costs (DJC), a factor that can be entered manually (default: blank)
and the factor used by the program. The last column displays the overall amount (=
DJC * Factor).
The table configuration provides the option to format the table to provide a quick
and easy overview (e.g. by formatting the text in bold for the overall totals for every
cost portion). When a factor is entered manually, the unedited factors are adjusted
by the program.
The markups for G&A, R&P and AM can, as for other allowance types, be edited in
the document properties of the allowance.
3.2.9 Allowance with markup splitting

In the allowance, it is possible to split the markups for G&A, R&P and AM into indi-
vidual partial values. Thus, a differentiated analysis is possible in the evaluations.

Allowance method
In both, the allowance configuration and the actual allowance, the markup break-
down can be activated by the option With Markup Breakdown.
In addition to the percentages, the maximum possible portions (with code and de-
scription), separated into own third-party work, can be defined in the allowance
configuration.
These values apply when creating a new allowance as default for the allowance
properties.
The actual authoritative definition of the markup breakdown then takes place in the
properties of the allowance. However, entered percentages only apply as a default
for the individual allowance cost codes. If there is a subsequent change in value,
these can be transferred to the allowance cost codes on request. However, the au-
thoritative values are managed individually for each allowance row and can also be
edited via the docking window Markup Split.
Depending on the context in which row (A&G, R&P, AM) the focus is, these portion
values are displayed. Splitting is possible for all cost code levels. The total value
can always be entered.
If a splitting is already defined, the total value is distributed in proportion to the pre-
vious breakdown.
If no splitting has yet been defined, the total value will be distributed in equal parts
to all portions. The values determined are not rounded.
The different types of markup splits are defined in the allowance configuration and
are therefore deleted from the allowance and allowance targets when you delete a
markup split from the allowance configuration. The totals will be updated accord-
ingly.
If a Sub cost code is newly used in the allowance, the markup portions for this cost
code are preassigned in accordance with the allowance properties.
Adopt legacy data before RIB iTWO 2020

a) Markup breakdowns are preassigned from the Allowances Configuration.
That is, the total value is distributed according to the portions defined in the
allowance configuration, or if markup portions are defined in the configura-
tion with 0.00, the total value is distributed in equal parts to the markup por-
tions.
The values are preassigned either depending on the cost code (for break-
down according to major cost codes in legacy data) or on own/third party
(for standard breakdown).
b) The previous directory „..\Estimate\EnhancedAllocationHKOA“ has been re-
named to „..\Estimate\EnhancedAllocationMarkupBreakdown“.
Default for markup splits

Copy Markup Splits
A general possibility of pre-assigning the markup rates including breakdown con-
sists e.g. by definition of the allowance in the master or template project. The al-
lowance from the master project is copied when a new estimate is created.
In addition, a separate copy functionality for the allowance portions has been im-
plemented. This can be called up via the ribbon Copy Markup Splits.

Allowance method
The values are taken from the active allowance row and displayed in the dialog.
For copying, the corresponding value ranges (G&A, R&P, AM) can be selected. If
the call is made from a specific field (G&A, R&P, AM), this is already preselected.
When calling from other fields, all three areas are already preselected.
The destination of the copy operation can be selected for the two options, for all
sub-elements and all cost codes as well as the current and all areas. This setting of
the two options will be saved depending on the user and pre-assigned the next
time.
Evaluations
For the evaluation, a separate report type Allowance with Markup Breakdown is
available. The markup splits of the cost code rows are taken into account. A value
block is displayed for each cost code used.
When using the areawise allowance by classifications, a cost code block is output
for each area.
3.3 Allowance method with classifications
3.3.1 Create classification for allowances via catalog

classifications
1. Generate a classification catalog in the folder Catalogs | Classifications. To do
this, use the context menu command New | Classification Catalog.
2. Select the classification catalog in the project structure. On the right, the sys-
tem displays the Properties.
In the Basic Data tab, specify a code and a description for the classification
catalog.
Select the Allowance Criteria from the Type list field.
In the module table, check the boxes BoQ and Estimate. This allows the new
classification catalog to be used in these modules..
3. Double-click to open the new classification catalog.

InThe first 3 lines were automatically created in the catalog.
– 1. row: catalog description

– 2. row: Markup on GC
This row is only needed for the Allowance areawise with Area Balancing
via Classifications . It contains the markup default values for G&A, R&P
and Additional Markup.
– 3. row: not assigned
This row is needed for all Allowances via classifications. It contains the
markup default values for G&A, R&P and Additional Markup. The markup
on GC is only needed for the Estimate-by-Markup areawise via Classi-
fications.
4. In addition to these fixed rows any number of row can be generated with the
context menu command New.
Each of these rows contains the classification element (= Flag mentioned in the

Allowance method
preliminary notes) the markup default values for G&A, R&P and additional
markup. The Markup on GC is only needed for the 'Estimate-by-Markup
areawise via Classifications'.
In an allowance that has been created with this catalog the default values can
later be adjusted separately for each cost code.
To simplify work, it is recommended to create the classification in the master.
When creating a new project it can be copied into the project.
3.3.2 Using the classification catalog for allowances

1. To use the classification in the allowance, it must first be enabled. To do this,
select in the project structure the entry Catalogs | Classifications.
On the right, the Properties are displayed.
2. Click on the tab Assignment.
Select from the list field Allowance the newly created outline catalog.
3.3.3 Assigning classification elements

In the BoQ as well as in the Estimate (and here even on the level of the estimate
details) it is possible to assign a classification element to an item.
1. To do this, you must show the table columns with the assignment to the re-
quired classification catalog in the Bill of Quantities or the Estimate.
To do this, right-click in the table header and select the context menu com-
mand Customize. In the 'Visible' column, tick the desired Classification Catalog.
Close the dialog.

2. In the Estimate or BoQ table, you can assign the required classification to the
elements in the corresponding Classification column. Enter the value either dir-
ectly or select it from the catalog with <F3> or by clicking on .

Print
4 Print
You can also print the allowance, just like any other document in the program.
1. Switch to the project window.
2. Select the estimate document in the project structure.
3. In the properties, select Allowances.
4. Click on the desired allowance in the list.
5. Click Print in Allowances.
6. Expand the required folder and select the desired report type.
7. Configure the required print options for the selected report, if required.
8. Click Print.
If you have opened an allowance, you can print the open allowance via Application
Button | Print | Print.
4.1 Print options
The general print options are described in the "Settings" documentation.
Only the two print options Allowances Sheet and Cost Codes in Allowances Sheet
are described here.
4.1.1 Cost Codes in Allowances Sheet

Here, you can enter a summary of the cost codes which should be taken into con-
sideration.
You can determine which cost codes should be shown in the allowances sheet in
the table. Corresponding buttons are available for this purpose.
Append cost code

Via this button, you can create the first entry in the table and are then able to add
additional entries to the existing ones.
Insert cost code

Via this button, you can insert another cost code after the one selected in the table
Delete cost code

You can delete an entry selected in the table again with this button.
The Cost Codes dialog box appears for selection of the cost code.
4.1.2 Allowances Sheet

Here, you can enter settings on the content of the report.
Elements
The following functions are available here:

Print
▪ Print properties of allowance

If you activate this function, the properties of the allowance are also printed.
▪ Print cover sheet
If you activate this function, a cover sheet will also be printed.
▪ Print tender summary
This function allows you to control whether a tender summary is output. If you
deactivate this function, the tender summary is not printed.
▪ Print summary of hours and costs per area
This function allows you to control whether hours and costs are output. If you
deactivate this function, hours and costs per area are not output.
▪ Print crew mixes per area
This function allows you to control whether crew mixes are output. If you deac-
tivate this function, crew mixes per area are not output.
▪ Print markups and allowance factors per area
If you activate this function, markups and allowance factors per area are also
printed.
Cost codes
The following options are available here:
▪ Print CoCs which have their own allowance factors (default)
Select this option if CoCs with their own allowance factors should be printed.
▪ Print CoCs from the configuration
Select this option if CoCs from the configuration should be printed.
Lines in allowances sheet

▪ No empty Lines in Cost Code Section
If you activate this function, empty lines are disabled (total result = 0.00) in the
cost code block.
▪ No empty Lines in Totals Section
If you activate this function, empty lines are disabled (total result = 0.00) in the
totals block.
It is possible to disable empty lines for markups, advanced allowance, in-house
work, nM items, manual markup and discount. If all lines of an area are equal
to zero and are disabled, the subtotal is also disabled.
▪ Print tender total accord. to BoQ and taxes
This option enables printing of the total according to the BoQ with details of the
discounts and rounding differences. If you deactivate this function, this output is
disabled.
If you deactivate this function, this output is disabled.

Print
Page breaks
▪ Page break before crew mix table
If you activate this function, a page break occurs before the crew mix table.
▪ Page break before table with markups and factors
This function allows you to set that this table should start on a new page. If you
deactivate this function, no page break occurs before this table.

5 Direct cost markups and price calculation
Knowledge of the connections and effects of the direct cost markups is an im-
portant requirement for successful work.
Here, the subjects of direct cost markups (DCM) and price calculation are handled,
since the scope of the program extends well beyond the "standard" instructions.
The program offers a variety of working options based on technical concepts which
must first be explained. The respective working options can only be correctly and
successfully used in the software if you are familiar with these concepts.
The general explanations here allows the actual descriptions on how to use the
program to be kept deliberately clear and concise. For a complete understanding,
these descriptions should be read in conjunction with the instructions on how to
use the program. The theory is supported with numerical examples so that the for-
mulae can be better understood.
We recommend that you create a small project with the same numbers and
work though all steps shown in the program. You will see that the results in the
program exactly match the examples shown here.
A project with the following items and estimate details is sufficient:
tender BoQ GC BoQ

Item 1 Item 2 = Sample item Item 1
BoQ Quantity = 1.000 BoQ Quantity = 10.000 BoQ Quantity = 1.000
AQ Quantity = 1.100 AQ Quantity = 11.000 AQ Quantity = 1.000
Cost code DJC DJC/UoM DJC GC
1 – Hours/Labour 9,500.00 50.00 500.00 1,200.00
2 – Materials 8,650.00 35.00 350.00 200.00
3 – Plant 950.00 5.00 50
4 – Auxiliary Labour/ 500.00
Transport
5 – Subcontractor Ser- 2,900.00 10.00 100
vices
6 – Misc 500.00 1,000.00
Total 23,000.00 1000.00 2,400.00
At this point, two different methods have been mentioned, with which the direct
cost markups can either be calculated or in which they can be entered as fixed
markups. These methods are simple allowance and area-wide allowance.
5.1 Allowance method (general)

There are two basic methods available in the program for determining direct cost
markups.

Single-step allowance
In this method, the direct cost markups (DJC) for GC and GA/R+P are combined
into a single value. Therefore, only a markup amount is output as the FM (final
markup) in the item.
This method is contained in the user licence for the Tender Estimate module.
Two-step allowance
In this method, the direct cost markups (DJC) for GC and GA/R+P are handled
separately and applied successively (two-step) to the items. Both an allocated
amount for GC and an allocated amount for GA/R+P (= FM) are therefore output in
the items. Areawise allowance can also be switched to simple allowance.
This method is part of a separate user licence (Enhanced Allowance) which can
be purchased in addition to the licence for the Tender Estimate module.
Both methods can be used for both the estimate using the grand total and for the
estimate by markup.
5.2 Any number of allowance variants

In the project, any number of allowance variants can be calculated and stored with
each allowance method. Each variant provides a detailed statement on costs, es-
timated allowance amounts, effective allocated amounts and tender totals. Each of
these variants can be used for the calculation of the prices of the items, by activat-
ing it for this purpose.
5.3 Additional revenues from DCMs on non-

standard items
DCMs on the costs of non-standard item types lead to amounts for GC, GA and
R+P which are not determined as allowance amounts and have been distributed to
the costs of the allowance base. There are additional allowance amounts in the
tender total which initially constitute an increased margin.
These additional allocation amounts are actually required once the non-standard
items are executed, at least as far as their contribution to GA, R+P, FM is con-
cerned. GA, R+P, FM are estimated in dependence of the total costs or the total
revenue, and are as such charged to the construction site. The construction site
must therefore generate them.
GCs for optional items were able to be estimated as required. Only GCs on non-
standard items without ITs were not able to be considered as required. However,
since non-standard items without ITs generally occur in place of a split quantity of a
standard item, approximately the same allowance portion is paid, rather than a
higher one.

5.4 Determining the direct cost markups (DCM)

The so-called direct cost markups are required for calculation of the prices. Direct
cost markups are factors used to include additional amounts in the items to be sub-
mitted.
Amounts from the allowance are still missing in the items
▪ GC (General Conditions)
▪ GC (General and Administrative costs)
▪ R+P (corporate Risk and Profit)
▪ AM (Additional Markup)
You must now decide how to include the amounts for the above entries in the
items.
5.4.1 Handling the non-standard item types

In principle, the costs of all non-standard items (optional items, price request items,
alternative items, daywork items) are surcharged with the DCMs of the standard
items as long as you do not deliberately interfere in the program.
5.4.1.1 DCM for GA/R+P/AM of the non-standard items in the

extended allowance
In the 2-step allowance, the costs of all non-standard item types marked up with
the DCM for GCs are marked up with the DCM for GA/R+P/AM of the standard
items. It is only possible to change this method if you enter a fixed price for such
items or make the item markup-free.
5.4.1.2 GCs for non-standard items without ITs in the

extended allowance
The costs of non-standard items without ITs are generally marked up with the DCM
for GCs of the standard items. It is only possible to change this method if you enter
a fixed price for such items or make the item markup-free.
The advanced allowance (AA) can not be used in non standard items without
IT.
5.4.1.3 GCs for optional items in the advanced allowance

In the extended allowance, you can influence the DCMs for optional items in the
following ways:
▪ Entry of a special DCM for GCs per marked-up cost code and BoQ area.
▪ Estimate of GCs for optional items only and calculation of the DCM for GCs.
The advanced allowance (AA) can not be used in optional items.

5.4.1.4 DCMs for non-standard items without ITs in the single-

step allowance
The costs of non-standard items without ITs are generally marked up with the DCM
of the standard items. It is only possible to change this method if you enter a fixed
price for such items or make the item markup-free.
5.4.1.5 DCMs for optional items in the single-step allowance

You can set the DCM for optional items by entering a special DCM, which differs
from the standard items and only affects optional items, in a separate column per
marked-up cost code. There are no other options for influencing the optional items
in the single-step allowance.
5.4.1.6 DCMs for daywork items

Here you can select how the costs of the daywork items are included in the allow-
ance and with which DCMs (direct cost markups) the prices of the daywork items
are calculated.
Daywork items can be treated like
▪ Standard items
▪ Optional items
▪ Non-standard items without IT
Depending on the selection, the daywork items fall under one of the categories ac-
cording to the following chapters.
5.4.2 Estimate-by-markup
If you specify fixed DCMs in all marked-up cost codes, a so-called estimate by
markup is performed. This applies for both the simple (single-step) and advanced
(two-step) allowance. Any GCs calculated in the GC-BoQ are then no longer part
of the calculation. Likewise, the introduced markups for GA, R+P or AM are no
longer relevant. Only the fixed DCMs determine the markup on the costs of the
items. The total of these item markups is a different allowance amount from the
one which would have been given via estimated GCs and entered markups for GA,
R+P, AM.
WARNING
Deficits from fixed DCMs on all marked-up cost codes cannot be balanced.

There are companies which generally work with the estimate by markup. A pro-
ject can also be started with an initial estimate by markup via the estimate using
the grand total, in order to be able to predict preliminary prices before pro-
cessing the details of the GCs and markups in the estimate of the items. In such
a case, preliminary DCMs are first entered in the allowance as fixed DCMs.
These predefined DCMs are deleted again later and replaced with calculated
DCMs by the program.
5.4.3 Basic information on the area-wide allowance

One aim of the estimate work is to arrange the tender prices so as to give as low a
tender total as possible whilst simultaneously covering all costs. To survive
successfully in the market, you must also be able to adjust the prices to market
factors or also set prices according to tactical aims. The so-called Enhanced
Allowance is the ideal tool for this, which offers support when optimising the
tender prices according to the specified aims.
After "normal" work with the cost estimate, an experienced estimator knows that he
can considerably improve the chances of a successful submission by focusing on
the weaknesses of the enquiry and using this insight to optimize the price calcu-
lation.
An experienced estimator also knows that "price politics" are required in order to
satisfy the current market factors and to prepare for opportunities during construc-
tion. It may be that the prices of certain work items must be based on constraints
which are justified: from the client's representative, of the project itself, of compar-
able projects, of the competition, of the market of subcontractors, etc. However, a
certain price tactic for particular work items can also be important, in order to fur-
ther improve the chances of improvement of the revenue situation in the case of
later interventions of the client in the scope and the construction process.
For all of these tasks, the Enhanced Allowance has been created, which is an im-
portant tool for company success. This program module is based on wide-ran-
ging experience in estimating and contract negotiations. The procedure is ex-
tremely flexible, i.e. it allows the user to deal with each desired area of the enquiry
individually. You still have complete security thanks to the check of the cost defi-
cit, despite the unusual relocations of the amounts to be allocated for general con-
ditions and risk and profit.
Only the Enhanced Allowance offers the often crucial option of taking areas of the
enquiry and of the amounts to be allocated "into your own hands“. The procedure
offers two different methods:
▪ Allowance with area balancing
▪ Allowance without area balancing
5.4.3.1 Allowance without area balancing

In the Area-wide allowance without area balancing, the total allowance can be di-
even individual items. To this extent, the procedure is the same as area-wide al-
lowance with area balancing, but the areas of the BoQ to be submitted are (only)

prepared here in order to assign certain portions of the GCs to the individual areas.
Here, the GC portions are either determined via percentages based on the total
GCs, or the GCs are split into areas so that a certain GC area can be assigned to a
certain BoQ area. The smallest possible unit in the BoQ and GCs is the individual
item.
The calculation algorithms described earlier apply in each individual area. There is
no balancing of allowance amounts between the areas.
▪ There is a certain area in BoQ which determined specific GCs. These GCs
should be assigned to the correct area.
▪ Only a partial award is to be expected. The GCs required for the partial award
must be determined and assigned to the actual work items under considera-
tion. A tender may need to be submitted for both the total award and the partial
award.
5.4.3.2 Allowance with area balancing

In the Area-wide allowance with area balancing, the total allowance can be divided
into desired areas for the allowance. This is done by selecting item areas or even
individual items. For individual areas, the direct cost markups can either be set in
all cost codes or only in particular cost codes. The program automatically converts
all other "open" direct cost markups by subtracting the partial allowance amounts
assigned specifically via predefined DCMs from the total allowance amount, and
then distributing the remainder based on the costs of the cost codes of all areas
which have not yet been specifically marked up. You are already familiar with this
principle in connection with predefined DCMs on certain cost codes. Whereas the
determination of costs is carried out with regard to the respective costs for the en-
tire project, specific negotiations regarding selected BoQ areas can be made here.
▪ The costs in a certain area of the BoQ should not be marked up, although the
resultant deficit must be distributed to the other areas either generally or in part
specifically.
▪ Items with predicted additional quantities should receive a higher portion of
general conditions (GC and GA) to be allocated, although the resultant deficit
must be balanced in other areas either generally or in part specifically.
▪ Items which are worked on early on should receive a higher portion of general
conditions (GC and GA) to be allocated, in order to improve the liquidity in the
first phase of construction.
An explanation of the calculation algorithms using examples is avoided, since the
principle Remaining allowance amount based on remaining allowance base has
already been shown.
5.4.4 Estimate using the grand total (tender total)

For an estimate using the grand total, the tender total is determined before the unit
rates of the items to be submitted are known. The starting point for this calculation
is the project analysis of the DJCs, i.e. the analysis of the DJCs over all items.

5.4.4.1 Interventions in the unit rates and balancing of the

deficits
Advanced Allowances (AA) represent a targeted intervention in the price calcula-
tion for an item. The relocations of GCs BGK caused by AAs are automatically
taken into consideration in the allowance; they generally do not change the tender
totals.
However, there are further intervention options in order to influence the prices pro-
cessed in the allowance.
5.4.4.1.1 Items without markup with fixed prices

The nM flag can be combined with entering a fixed price. In this case, DJC < > UP.
The difference is seen as part of the allowance amounts of the project. The follow-
ing applies:
▪ No GA/R+P/AM is calculated for the item. This means that the item does not
contribute to the amount of the FM contained in the project.
▪ The costs of the item are part of the allowance base for calculating the DCM.
The costs of the item are surcharged with DCM. The fixed price causes a defi-
cit that can be compensated for by the allowance. See chapter Fixed prices of
the items [} 59].
The item with both flags thus behaves like an item with a fixed price, and does not
contribute to the FM (GA/R+P/AM).
Neither an advanced allowance (AA) nor a manual markup (MM) can be entered in
items without markup.
5.4.4.1.2 Items with no markup

The "no markup" flag of an item has two effects:
▪ The costs of the item are not included in the basis for the calculation of the
amounts of G&A/R+P/AM. This means that the item does not contribute to the
amount of the FM contained in the project. The item is not part of the allowance
base for calculating the DCM.
▪ The costs of the item are not surcharged with DCM.
Hence: UR = DJC
Neither an advanced allowance (AA) nor a manual markup (MM) can be entered
for items with no markup, since UR ≠ DJC would be in this case.
An example of items with no markup are daywork services, where cost details are
used that already contain all of the markups. Neither further FM are to be created
nor shall the UR differ from this type of cost detail in such a case.
5.4.4.1.3 Surcharge Item

Surcharge items are standard items, the item totals of which are not given by the
cost estimate, but only from the total of the ITs of the reference items and the per-
centage for the surcharge item. Here, it may only be possible to take partial quant-
ities of the reference items into consideration.

Stoneware pipes are listed in several items. In a surcharge item, the bidder
wants to know the costs of all fittings and requests that the bidder specify a per-
centage based on the sum of the ITs of all straight pipes. The items for the
straight pipes should be named as reference items. The IT of the surcharge
item is then: (Sum of ITs of the base items) x percentage.
The costs of surcharge items can be estimated but do not have do be. However, if
the user does not calculate DJCs, this results in an excess in the calculation, i.e. a
positive deficit which does not correspond to reality, since costs will occur. In addi-
tion, the item then does not generate an allowance amount from GA, R+P, AM and
GC, since it does not provide a contribution to the DJC total as a base variable for
calculating the FM.
There is no AA in surcharge items.
WARNING
A deficit from surcharge items cannot be balanced in the allowance.
5.4.4.1.4 Predefined DCMs on all cost codes

If the DCMs are defined for all cost codes, DCMs can no longer be calculated by
the program based on the estimate. In this case, estimate by markup is performed.
The allowance amounts generated in this way deviate from the estimated amounts.
(see chapter on estimate by markup)
If DCMs are predefined for all cost codes, they then generate an increased or de-
creased margin which cannot be balanced.
5.4.4.1.5 Allowance via AQ quantities

The calculated allowance amounts for GC and FM can be allocated to the DJCs
based on the AQ quantities. If the DJCs based on the AQ quantities should be
higher, this step is recommended if you would like to have a lower but still sufficient
tender total. The initially lower allowance amount is resolved by the billing of higher
AQ quantities.
In our project example, we will assume that the DJCs of the standard items based
on AQ quantities are 10% higher. The estimated GCs then lead to a lower DCM:
Cost code DJCs GC Total job costs

of the standard = DJCs + GCs
items
1 – Hours/Labour 11,000 1,200 12,200
2 – Materials 9,900 200 10,100
3 – Plant 1,100 1,100
4 – Auxiliary Labour/ 550 550
Transport
5 – Subcontractor Ser- 3,300 3,300
vices

6 – Misc 550 1,000 1,550

Total 26,400 2,400 28,800
DJCs for GCs = 100 x (2400 / 26400) = 9.09%

Nothing changes in the DCM for FM.
If we calculate our project with this DCM, this results in a lower tender total (always
with BoQ quantities):
Cost code DJC DCM Amount DJCs + GC DJC for FM

Standard GC from Markup FM in % Amount
Items in % DCM + AA on TJCs
GC
1 – Labour 10,000.00 9.09 909.09 10,909.09 11.11 1,212.12
2 – Materials 9,000.00 9.09 818.18 9,818.18 11.11 1,090.91
3 – Plant 1,000.00 9.09 90.91 1,090.91 11.11 121.21
4 – Auxiliary 500.00 9.09 45.45 545.45 11.11 60.61
labour/Trans-
port
5 – Subcon- 3,000.00 9.09 272.73 3,272.73 11.11 363.64
tractor Ser-
vices
6 – Misc 500.00 9.09 45.45 545.45 11.11 60.61
Total 24,000.00 2,181.81 26,181.81 2,909.10
The tender total is:

24,000.00 + 2,181.81 + 2,909.10 = 29,090.91
For the allowance to DJCs for BoQ quantities, the tender total would have been:
24,000.00 + 2,400.00 + 2,933.33 = 29,333.33
In this situation, there is a deficit in the GCs
GC deficit = 2,400.00 – 2,181.81 = 218.19
If the services are performed with AQ quantities, the deficit is balanced:
Cost code DJC DCM Amount DJCs + GC DJC for FM

Standard GC from Markup FM in % Amount
Items in % DCM + AA on TJCs
GC
1 – Labour 11,000.00 9.09 1,000.00 12,000.00 11.11 1,333.33
2 – Materials 9,900.00 9.09 900.00 10,800.00 11.11 1,200.00
3 – Plant 1,100.00 9.09 100.00 1,200.00 11.11 133.33
4 – Auxiliary 550.00 9.09 50.00 600.00 11.11 66.67
labour/Trans-
port

5 – Subcon- 3,300.00 9.09 300.00 3,600.00 11.11 400.00

tractor Ser-
vices
6 – Misc 550.00 9.09 50.00 600.00 11.11 66.67
Total 26,400.00 2,400.00 28,800.00 3,200.00
In this case, the following is billed:

26,400.00 + 2,400.00 + 3,200.00 = 32,000.00.
The allowance methods are able to carry out the calculations shown:
▪ Calculation of the allowance factors for AQ quantities and display of the results
based on BoQ quantities.
▪ Calculation of the allowance factors for AQ quantities and display of the results
based on AQ quantities.
As the user, you can decide the allowance factors with which the tender should be
calculated.
5.4.4.1.6 Manual Markup (MM)

For items, an amount can be entered as Manual Markup (MM) in a separate field.
The tender total changes accordingly. The MM cannot be balanced in the allow-
ance, but the allowance shows the total of the MM.
MM leads to a "deficit" compared to normal calculation.
This markup is not possible for items with fixed prices, since this would be contra-
dictory.
5.4.4.1.7 Fixed prices of the items

You can set any fixed price for the items. This overwrites the calculated UR and
thus also changes the tender total.
Fixed prices lead to a deficit compared to the normal calculation.
The allowance allows you to balance the difference of the fixed prices and the cal-
culated prices.
We will assume that for equal DCMs, our sample item receives a fixed price of
112.22, which is 10.00 less than calculated. AA is not included.
Cost code DJC DCM Amou DJCs + DCM FM UR FP

Item GC nt GC for Amou
per in % from Markup FM in nt
UoM DCM + AA %
GC on
TJCs
1 – Labour 50.00 10.00 5.00 55.00 11.11 6.11
2 – Materi- 35.00 10.00 3.50 38.50 11.11 4.28
als

3 – Plant 5.00 10.00 0.50 5.50 11.11 0.61

4 – Auxili- 10.00 11.11
ary labour/
Transport
5 – Sub- 10.00 10.00 1.00 11.00 11.11 1.22
contractor
Services
6 – Misc 10.00 11.11
Total 100.00 10.00 110.00 12.22 122.22 112.22
For an item quantity of 10.00, the tender total decreases to 100.00 due to the fixed
price. The allowance shows this difference amount if the function Balance the dif-
ference of fixed price items is not active.
If the function Balance the difference of fixed price items is activated in the allow-
ance, then the difference is interpreted as FM (GA/R+P/AM), which is included in
items in advance as a positive or negative value via the fixed prices.
Actual FM in FP item = FP - DJC - AA - (DJC x DCM for GC)
Remaining FM = (Total FM) - (Actual FM in FP item)
Actual FM = 10.00 x (112.22 - 100.00 - 0.00 x 10.00%)= 22.22
Remaining FM = 2933.33 - 22.22 = 2911.11
This amount should be allocated to the TJCs of the standard items without FPs.
Remaining TJCs = 26400.00 - 1100.00 = 25300.00
DCM for FM for remaining item = 100 x (2,911.11 / 2,5300.00) = 11.51%
Once the deficit of the fixed price items has been balanced, there is no longer an
amount in the respective field.
The tender total changes depending on whether the balancing is activated or deac-
tivated.
After the balancing, the sample item with the fixed price appears as follows (shown
using the two-step allowance):
Cost code DJC DCM Amou DJCs + DCM FM UR FP

Item GC nt GC for Amou
UoM DCM + AA %
GC on
TJCs
1 – Labour 50.00 10.00 5.00 55.00 11.51 6.33
2 – Materi- 35.00 10.00 3.50 38.50 11.51 4.43
als
3 – Plant 5.00 10.00 0.50 5.50 11.51 0.63
4 – Auxili- 10.00 11.51
ary labour/
Transport

5 – Sub- 10.00 10.00 1.00 11.00 11.51 1.27

contractor
Services
6 – Misc 10.00 11.51
Total 100.00 10.00 110.00 12.66 122.66 112.22
The item has a unit rate difference:

URD = Fixed price - Calculated price = 112.22 - 122.66 = -10.44
5.4.4.2 Unequal markups for GA/R+P in the two-step

allowance
If you are working with markup rates for GA/R+P/AM in the two-step allowance
which are different for each cost code, this results in another anomaly in the DCMs
for GA/R+P/AM which are effectively processed further in the items.
If we assume the situation according to the last example in the previous chapter:
Cost code DJC GCs TJC DCM for DCM for GA/R+P
Standard Estim- GCs in GA/R+P Amount
Items ated % in % of
on TJCs TJCs
1 – Hours/La- 10,000 1,200 11,200 10.00 20.00 2,240.00
bour
2 – Materials 9,000 200 9,200 10.00 5.00 460.00
3 – Plant 1,000 1,000 10.00 5.00 50.00
4 – Auxiliary 500 500 10.00 5.00 25.00
Labour/Trans-
port
5 – Subcon- 3,000 3,000 10.00 5.00 150.00
tractor Services
6 – Misc 500 1,000 1,500 10.00 5.00 75.00
Total 24,000 2,400 26,400 3,000.00
In this case, the GCs are included with an amount of 10% in the items per DCM for
GCs, regardless of the cost code. This way, for example, parts of the GC labour
are distributed to the other cost codes. Labour from the GCs must receive a DCM
of 20%; however, the portions in the items per DCM for GCs which are assigned to
the other CoCs only receive a DCM of 5% there, since the following formula ap-
plies for the items:
UR = [DJC + (DJC x DJC for GC)] x (100% + DCM for FM)
If the items were analysed with the above unchanged DCM after allowance of the
GCs per DCM of 10%, this would give the following project total:

Cost code DJC Amount DJC + DCM for GA/R+P

Standard from GC GA/R+P Amount
Items GC Markup in % of
Markup TJCs
1 – Hours/Labour 10,000 1,000 11,000 20.00 2,200.00
2 – Materials 9,000 900 9,900 5.00 495.00
3 – Plant 1,000 100 1,100 5.00 55.00
4 – Auxiliary La- 500 50 550 5.00 27.50
bour/Transport
5 – Subcon- 3,000 300 3,300 5.00 165.00
tractor Services
6 – Misc 500 50 550 5.00 27.50
Total 24,000 2,400 26,400 2,970.00
A total of 3,000.00 would thus no longer result. The cause of this is that an amount
of 1,200.00 is entered in the GCs for labour which should receive a DCM of 20%,
but after the allowance, only GCs with an amount of 1,000.00 per DCM for GCs are
applied to the labour. The difference amount of 200.00 is distributed to CoCs with a
DCM of only 5%. The following is thus missing:
(1200.00 - 1000.00) x (20% - 5%) = 30.00
For this error to be balanced, the DCM for GA/R+P/AM must be converted so as to
give a tender total of 3,000.00 again.
The solution is given by the following condition:
The amount for GA/R+P/AM which results when using the entered markup rates on
DJCs and GCs according to their original cost code assignment must be identical
to the amount which results when using a converted DCM on DJCs and GCs in the
items.
If we label the DCMs before correction of the error as FM1 (20% and 5% in the ex-
ample) and the corrected value as FM2 and set FM2 = (factor) x FM1, then the
above condition can be expressed as a formula as follows, taking the AA and the
average DCM for AA into consideration according to the previous chapter:
(DJC + GCK) x FM1 = Factor [ (DJC x FM1) + (DJC x DJCGC x FM1 ) + (AA x
Average DCMGC)]
Factor = [ (DJC + GC) x FM1] / [ (DJC x FM1) + (DJC x DJCGC x FM1 ) + (AA x
Average DJCGC)]
Factor = [(10000 + 2000) x 20% + (14000 + 1200) x 5%] / [10000 x (100% + 10%)
x 20% + 14000 x (100% + 10%) x 5%)]
Factor = (2240 + 760) / (2200 + 770) = 3000 / 2970 = 1.010101
This factor should be applied to the FM1 of 20% and 5%, which will cause the pro-
ject result to be displayed correctly again:

Cost code DJC Amount DJC + DJCs for Corrected GA/R+P

Stand- from GC GA/R+P DCM for Amount
ard GC Markup in % of GA/R+P
Items Markup TJCs in % on
= FM1 TJC
= FM2
1 – Hours/La- 10,000 1,000 11,000 20.00 20.2020 2,222.22
bour
2 – Materials 9,000 900 9,900 5.00 5.0505 500.00
3 – Plant 1,000 100 1,100 5.00 5.0505 55.56
4 – Auxiliary 500 50 550 5.00 5.0505 27.78
Labour/Trans-
port
5 – Subcon- 3,000 300 3,300 5.00 5.0505 165.67
tractor Ser-
vices
6 – Misc 500 50 550 5.00 5.0505 27.77
Total 24,000 2,400 26,400 3,000.00
None of this is relevant in the single-step allowance, since a uniform DCM for all
cost codes is immediately determined there by immediate allowance of the total al-
lowance amount (GC + GA/R+P/AM) to the total of all cost codes.
In the two-step allowance, this also ceases to be relevant wherever a fixed DCM is
specified. In this case too, the remaining amount of GA/R+P/AM is allocated to the
costs of all remaining cost codes, which causes the calculation to be automatically
balanced in the average remaining DCM. The same also applies if the deficit is bal-
anced by fixed prices, which also results in an average DCM for all cost codes.
See also
5.4.4.3 Targeted reallowance of GCs using advanced

allowance (AA)
If the GCs have been estimated, then partial amounts from them can be specific-
ally assigned to certain items. This is done using advanced allowance (AA). In the
items, there is a special field for this in which an amount for AA can be entered.
The amount can also have a negative sign, with which GCs are calculated from
this item, equal to the number actually incurred per allowance.
The allowance methods calculate the total of the amounts that have entered the
items in this way and subtract the total AA from the calculated GC. Only the re-
maining amount for GC is included in the allowance then. Items with AA receive
additional GCs per DCM for GCs from the allowance.

WARNING
Advanced allowance is part of the GC amount!
In our project example, we will assume that an amount of 400.00 per AA has been
assigned to our sample item. At the same time, we will assume the original state of
the DCMs, i.e. an equal DCM on all cost codes.
The estimated GCs had an amount of 2,400.00. This means
Remaining GCs = GCs – AA = 2,400.00 – 400.00 = 2,000.00.
This gives an equal DCM for GC as follows:
DCM for remaining GCs = 100 x (remaining GCs)/(DJCs)
DCM for remaining GCs = 100 x (2,000.00) / (24,000.00) = 8.33 %
Our project now appears as follows:
Cost code DJC AA DCM Amount DJCs + DJC for FM

Stand- GC from GC FM in Amount
ard in % DCM Markup %
Items GC + AA on
TJCs
1 – Labour 10,000.0 8.33 833.33 10,833.33 11.11 1,203.70
0
2 – Materi- 9,000.00 8.33 750.00 9,750.00 11.11 1,083.33
als
3 – Plant 1,000.00 8.33 83.33 1083.33 11.11 120.37
4 – Auxili- 500.00 8.33 41.67 541.67 11.11 60.19
ary labour/
Transport
5 – Sub- 3,000.00 8.33 250.00 3,250.00 11.11 361.11
contractor
Services
6 – Misc 500.00 8.33 41.67 541.67 11.11 60.19
400.00 400.00 11.11 44.44
Total 24,000.0 400.00 2,000.0 26,400.00 2,933.33
0 0
Since the AA is equal to GC, the DCM for FM also effects the AA.
Our sample item, which contains the amount for AA of 40.00/UoM, appears as fol-
lows:
Cost code DJC AA DCM Amoun DJCs + DJC FM UR

Item GC t GC for Amou
UoM DCM + AA %
GC on
TJCs

1 – Labour 50.00 8.33 4.17 54.17 11.11 6.02

2 – Materi- 35.00 8.33 2.92 37.92 11.11 4.21
als
3 – Plant 5.00 8.33 0.42 5.42 11.11 0.60
4 – Auxili- 8.33 11.11
ary labour/
Transport
5 – Sub- 10.00 8.33 0.83 10.83 11.11 1.20
contractor
Services
6 – Misc 8.33 11.11
40.00 40.00 11.11 4.44
Total 100.00 40.00 8.33 148.33 16.47 164.80
WARNING
Since the AA is part of the GCs, the AA in the item receives the same DCM as
the GCs do.
Given this connection, an anomaly occurs in the two-step allowance if the DCMs
per cost code are not identical, as is the case in the above example. As long as the
DCM for FM is identical in all cost codes, the AA also receives the same DCM. Let
us assume that the DCMs in our project appear as follows.
Cost code DJC GCs TJC DCM for GA/R+P

Standard Estim- GA/R+P Amount
Items ated in % of
TJCs
1 – Hours/Labour 10,000 1,200 11,200 20.00 2,240.00
2 – Materials 9,000 200 9,200 5.00 460.00
3 – Plant 1,000 1,000 5.00 50.00
4 – Auxiliary La- 500 500 5.00 25.00
bour/Transport
5 – Subcontractor 3,000 3,000 5.00 150.00
Services
6 – Misc 500 1,000 1,500 5.00 75.00
Total 24,000 2,400 26,400 3,000.00
In this case, it is no longer clear which DCM should be used for the AA. If a GC
portion is moved per AA, it can no longer be determined which cost code portion of
the GC is meant. It is a portion from each CoC used in the GCs. The amount of the
DCM on the GCs must always be identical before and after applying the AA, or
else the tender total would change.

Thus the following applies:

AA is marked up in the items with the average DCM on the GCs.
In the above example, this average DCM is
DCM on AA = [(1200 x 20%) + (1200 x 5%)] / 2400 = 12.5% = average DCMGC
5.4.4.4 Predefined DCMs on any cost codes

The DCMs cannot only be predefined for certain major cost codes, but also for any
cost codes of the cost code structure, both in the single-step and in the two-step al-
lowance. The function itself is described in the chapter on using the allowance -
only the calculation principle is explained here. For clarification purposes, we will
take our small example again, this time from the single-step allowance.
Initial situation with equal DCMs for all cost codes:
Cost code DJCs of DCM DCM Tender

the standard in % Amount total from
items standard
items
1 – Hours/Labour 10,000.00 22.22 2,222.22
2 – Materials 9,000.00 22.22 2,000.00
3 – Plant 1,000.00 22.22 222.22
4 – Auxiliary Labour/ 500.00 22.22 111.11
Transport
5 – Subcontractor Ser- 3,000.00 22.22 666.67
vices
6 – Misc 500.00 22.22 111.11
Total 24,000.00 5,333.33 29,333.33
We will now assume that the cost code for reinforced concrete, which is a subor-
dinate cost code of the major material cost code, should receive a higher DCM
than the remaining materials. The costs under the cost code Reinforced concrete
are 2,000.00.
Cost code DJCs of the DCM DCM Tender

standard in % Amount total from
items standard
items
1 – Hours/Labour 10,000.00 20.40 2,039.68
2 – Materials (remain- 6,000.00 20.40 1,223.81
ing)
24 – Reinforced con- 3,000.00 35.00 1,050.00
crete
3 – Plant 1,000.00 20.40 203.97
4 – Auxiliary Labour/ 500.00 20.40 101.98
Transport

5 – Subcontractor Ser- 3,000.00 20.40 611.90

vices
6 – Misc 500.00 20.40 101.98
Total 24,000.00 5,333.33 29,333.33
Create a new line in the allowances sheet and select the desired cost code;
here, this is the cost code 24.
By specifying a DCM on reinforced concrete to the amount of 35 %, the following

partial amount is allocated:
Determined allowance amount = 3,000.00 x 35% = 1,050.00
Remaining allowance amount = 5,333.33 – 1,050.00 = 4,283.33
This remaining allowance amount should be distributed to the remaining allowance
base:
Remaining allowance base = 24,000.00 – 3,000.00 = 21,000.00
This gives a DCM for the remaining cost codes
Remaining DCM = 4,283.33/21,000.00 = 20.40 %
All cost codes receive a DCM of 20.40% apart from reinforced concrete, for which
a DCM of 35% has been determined.
5.4.4.5 Combined or separate post-processing of the DCMs

DCMs for the GCs have resulted from the estimate of the GCs in the GC-BoQ.
DCMs for GA/R+P/AM have resulted from the estimate of GA/R+P/AM via markup
rates. Further processing depends on the selected allowance method:
▪ Single-step allowance: only combined post-processing possible.
▪ Two-step allowance: either separate or combined post-processing possible.
5.4.4.5.1 Separate post-processing of the DCMs
The separate post-processing of the DCMs for GCs and GA/R+P/AM is only
possible with the two-step allowance.
The DCMs are managed separately and used separately in the calculation of the
item price, so that the allowance amounts there can also be output separately:
DJC: 100.00
GC: 10.00
FM: 12.22
UR: 122.22
For separate post-processing of the DJCs, the following applies to the items:
UR = (DJC + DJC x DJC for GC) x (100% + DCM for FM)

In the example:
UR = (100.00 + 100.00 x 10%) x (100% + 11.11%) = (122.22)
If the DCMs of the allowance are deliberately changed, this occurs separately for
the GCs and for GA/R+P/AM.
This is first shown in the example for the GCs. The labour costs should be marked
up with a fixed rate of 20% for GCs.
This determination assigns a fixed portion of the total GCs to the labour costs. The
size of the amount is calculated from the labour costs of the items (10,000.00) and
the selected DCM (20%):
DCM for GC on labour = 20% of 10,000.– = 2,000.–
From the total GCs in the amount of 2,400.–, 2,000.– have therefore already been
distributed to the labour costs. The remaining GCs should be distributed among the
remaining costs:
Remaining GCs = GCs – (GC on labour)
= 2,400.00 – 2,000.00 = 400.00
Remaining DJCs = Total DJCs–Labour DJCs
= 24,000.00 - 10,000.00 = 14,000.00
Remaining DCMs - GCs = 100 x (400 / 14000) = 2.86%
For the total of the standard items, the project now appears as follows:
Cost code DJCs of the GC Amount from

standard markup GC Markup
items in %
1 – Hours/Labour 10,000 20.00 2,000
2 – Materials 9,000 2.86 257
3 – Plant 1,000 2.86 29
4 – Auxiliary Labour/ 500 2.86 14
Transport
5 – Subcontractor Ser- 3,000 2.86 86
vices
6 – Misc 500 2.86 14
Total 24,000 2,400
In this state, all items with a high labour portion become more expensive, other
items become cheaper.
If you were to fix the direct cost markup for GCs in all cost codes, you would no
longer be in the estimate method using the grand total, but in the markup estimate
for GCs. The amount from GC markups generated via fixed DCMs can then be dif-
ferent than the amount of the estimated GC (forced excess or deficit).

The deliberate intervention per fixed DCM for GA/R+P/AM is now shown for a cost
code, where we have determined a DCM of 20% on the labour costs. At the same
time, we will again use the project state with a DCM for GCs of 10.00% equally
across all cost codes.
We thus have the following initial state:
Cost code DJCs of the GC Amount DJC +

standard markup from GC Markup
items in % GC
Markup
1 – Hours/Labour 10,000 10.00 1,000 11,000
2 – Materials 9,000 10.00 900 9,900
3 – Plant 1,000 10.00 100 1,100
4 – Auxiliary Labour/ 500 10.00 50 550
Transport
5 – Subcontractor 3,000 10.00 300 3,300
Services
6 – Misc 500 10.00 50 550
Total 24,000 2,400 26,400
The total amount for GA/R+P/AM on standard items has an amount of 2,933.33 in
our project example. Since the DCM for GA/R+P/AM relates to the DJCs marked
up with GCs, the labour costs from DJC + GC markup should be used as a basis!
DCM for GA/R+P/AM on labour = 20 % x 11,000.00 = 2,200.00
There thus remains
Remaining allowance for GA/R+P/AM = 2,933.33 – 2,200.00 = 733.33
This amount is split across the remaining TJCs
Remaining TJCs = 26,400.00 – 11,000.00 = 15,400.00
This gives a DCM for the remaining cost codes of
DCM for remaining GA/R+P/AM = 100 x(733.33) / (15,400.00)= 4.76 %
Cost code DJC Amount DJC + DCM for GA/R+P

Standard from GC Markup GA/R+P Amount
Items GC in % of
Markup TJCs
1 – Hours/La- 10,000 1,000 11,000 20.00 2,200.00
bour
2 – Materials 9,000 900 9,900 4.76 471.43
3 – Plant 1,000 100 1,100 4.76 52.38
4 – Auxiliary La- 500 50 550 4.76 26.19
bour/Transport
5 – Subcon- 3,000 300 3,300 4.76 157.14
tractor Services

6 – Misc 500 50 550 4.76 26.19

Total 24,000 2,400 26,400 2,933.33
In this state, all items with a high labour portion become more expensive, other
items become cheaper.
If you were to fix the direct cost markup for GA/R+P in all cost codes, you would no
longer be in the estimate method using the grand total, but in the markup estimate,
i.e. the output values of 8% + 2% would no longer have any effect.
The following example shows the effects of manipulating both final markups; 20%
is set as the DCM on labour, both for GCs and DJCs
Cost code DJC DCM Amount DJC DCM for GA/R+P

Standard GC from + GC GA/R+P Amount
Items in % DCM Markup in % of
GC TJCs
1 – Hours/La- 10,000.0 20.00 2,000.00 12,000.0 20.00 2,400.00
bour 0 0
2 – Materials 9,000.00 2.86 257.14 9,257.14 3.70 342.85
3 – Plant 1,000.00 2.86 28.57 1,028.57 3.70 38.09
4 – Auxiliary 500.00 2.86 14.29 514.29 3.70 19.05
Labour/Trans-
port
5 – Subcon- 3,000.00 2.86 85.71 3,085.71 3.70 114.28
tractor Services
6 – Misc 500.00 2.86 14.29 514.29 3.70 19.05
Total 24,000.0 2,400.00 26,400.0 2,933.33
0 0
DCM for GA/R+P/AM = 20 % x 12,000.00 = 2,400.00

There thus remains
Remaining allowance for GA/R+P/AM = 2,933.33 – 2,400.00 = 533.33
This amount is split across the remaining TJCs
Remaining TJCs = 26,400.00 – 12,000.00 = 14,400.00
This gives a DCM for the remaining cost codes of
DCM for remaining GA/R+P/AM = 100 x (533.33) / (14,400.00) = 3.70 %
In this state, our sample item appears as follows:
Cost code DJC DCM Amount DJC + DCM for FM UR

Item GC from GC GA/R+P in Amoun
per in % DCM Markup % of TJCs t
UoM GC
1 – Labour 50.00 20.00 10.00 60.00 20.00 12.00
2 – Materi- 35.00 2.86 1.00 36.00 3.70 1.33
als

3 – Plant 5.00 2.86 0.14 5.14 3.70 0.19

4 – Auxiliary 2.86 3.70
labour/
Transport
5 – Subcon- 10.00 2.86 0.29 10.29 3.70 0.38
tractor Ser-
vices
6 – Misc 2.86 3.70
Total 100.00 11.43 111.43 13.90 125.33
5.4.4.5.2 Combined post-processing of the DCMs

Returning to the example with the calculated amounts for DJCs, GCs and FM (=
GA/R+P/AM):
Cost code DJCs GCs G&A/R&P/ Allowance Tender

of the Estim- AM amount Total
standard ated to standard from
items items Standard
Items
1 – Hours/La- 10,000.00 1,200.00 1,244.44 2,444.44
bour
2 – Materials 9,000.00 200.00 1,022.22 1,222.22
3 – Plant 1,000.00 111.11 111.11
4 – Auxiliary La- 500.00 55.55 55.55
bour/Transport
5 – Subcon- 3,000.00 333.33 333.33
tractor Services
6 – Misc 500.00 1,000.00 166.67 1,166.67
Total 24,000.00 2,400.00 2,933.33 5,333.33 29,333.33
The combined DCM should be applied equally to all cost components.

DCM = 100 x (5333.33 / 24000.00) = 22.22%
In our sample item, the price is then calculated as follows:
Cost code DJC DCM in % Markup UR

item on costs
per UoM per UoM
1 – Hours/Labour 50.00 22.22 11.11
2 – Materials 35.00 22.22 7.78
3 – Plant 5.00 22.22 1.11
Transport

5 – Subcontractor Ser- 10.00 22.22 2.22

vices
6 – Misc 22.22
Total 100.00 22.22 122.22
However, you can also predefine DCMs for particular cost codes in the allowance
procedure and let the program calculate the DCMs for the other cost codes. Let us
assume that the labour costs should receive a fixed DCM of 30%. This task as-
signs a certain partial amount of the total allowance amount specifically to the la-
bour costs.
Determined partial amount of the allowance = (Labour costs) x 30%
= 10,000.00 x 30%
= 3,000.00
Remaining allowance amount = 5,333.33 – 3,000.00 = 2,333.33
The remaining DCMs result from the remaining allowance amount.
Remaining DJCs = 24,000.00 – 10,000.00 = 14,000.00
Remaining DCMs = 100 x (2,333.33) / (14,000.00) = 16.67 %
For the total of the standard items, the project appears as follows:
Cost code DJCs DCM Amount Tender total

of the standard in % from DCM from
items standard items
1 – Hours/Labour 10,000 30.00 3,000.00
2 – Materials 9,000 16.67 1,500.00
3 – Plant 1,000 16.67 166.67
4 – Auxiliary Labour/ 500 16.67 83.33
Transport
5 – Subcontractor 3,000 16.67 500.00
Services
6 – Misc 500 16.67 83.33
Total 24,000 5,333.33 29,333.33
The tender total from standard items thus has not changed, the allowance amount
is just split differently across the cost portions. Services with a high labour portion
now become more expensive, other services become cheaper.
A different price is now given in the sample item:
Cost code DJC DCM Markup UR

item in % on costs
per UoM per UoM
1 – Hours/Labour 50.00 30.00 15.00
2 – Materials 35.00 16.67 5.83
3 – Plant 5.00 16.67 0.83


Transport
5 – Subcontractor Ser- 10.00 16.67 1.67
vices
6 – Misc 16.67
Total 100.00 23.33 123.33
If you were to fix the direct cost markup for GA/R+P in all cost codes, you would no
longer be in the estimate method using the grand total, but in the markup estimate,
i.e. the output values of 8% + 2% would no longer affect the DCMs.
5.4.4.6 Calculation of the amounts for GAs, R+P and AM, as

well as the DCM
After calculation of the DJCs and GCs, the following amounts, which are also part
of the allowance amount, must still be determined:
▪ GC (General and Administrative costs)
▪ R+P (corporate Risk and Profit)
▪ AM (additional markup, e.g. for technical costs in additional to the GAs)
These amounts are calculated using markups which are usually defined by man-
agement. These markups can either relate to the total job costs (= TJC + GC) or to
the allowance (= tender total).
Things are simpler if the markup rates (not to be confused with the DCMs) relate to
the total job costs, since the values can be directly applied to the existing TJCs.
However, if the values relate to the tender total, then the specified markup rates
must first be converted by the program so that they can be related to the total job
costs.
The method for the algorithm can be fixed in advance. You can use:
▪ GA + AM + R+P: 8+3+2 = 8.00+2.00+3.00 = 13.00
▪ G&A+AM+RP: 8+3+2 = 8.00+3.00+ 2.22 = 13.22
▪ G&A+AM+RP: 8+3+2 = 13 / (100 - 13) = 14.94
▪ GA + AM + R+P: 8+3+2 = 8.70+3.09+2.04 = 13.83
▪ G&A+RP+AM: 8+2+3 = 11.11+3.00+0.33 = 14.44
▪ GA + AM + R+P: 8+3+2 = 8.00+3.00+2.27 = 13.27
▪ GA + AM + R+P: 8+3+2 = 8.00+3.24+2.27 = 13.51
▪ GA + AM + R+P: 8+3+2 = 8.00+3.34+2.27 = 13.61
▪ GA + AM + R+P: 8+3+2 = 8.00+3.24+2.22 = 13.46
5.4.4.6.1 GA + AM + R+P: 8+3+2 = 8.00+3.24+2.22 = 13.46



DCM% = (100% + GA%) x (100% + AM%) x (100% + R+P%) - 100%
DCM% = (100% + 8%) x (100% + 3%) x (100% + 2%) - 100% = 13.46%
Enter the desired markup rates in the allowance as estimated details. Depending
on the method selected, the program always converts these rates to DCMs which
relate to the total job costs. The total of the entered markup rates is only identical
to the result relating to the TJCs if "GA+AM+RP: 8+3+2 = 8.00+2.00+3.00 =
13.00". If different markup rates are specified per cost code, these formulae are ap-
plied per cost code.
The total allowance amount for these portions is calculated using the DCM for GA/
R+P/AM (relating to the TJCs). Here, not just the DJCs of the standard items are
considered, but also the GCs.
Remaining with our numerical example, we can assume that the specified markups
for GA (8 %) and R+P (2 %) relate to turnover and the method "GA+AM+RP:
8+3+2 = 13 / (100 - 13) = 14.94" has been selected. An AM of 0.00% is assumed.
Then:
DCM for GA/R+P = [100 x (8% + 2%)] / [100% - (8% + 2%)} = 11.11%
This DCM is applied to both the DJC and the GC.
The following overview is then given in relation to the DJCs of the standard items
and the estimated GCs:
Cost code DJC GCs TJC DCM for GA/R+P

Standard Estimated GA/R+P Amount
Items in % of
TJCs
1 – Hours/Labour 10,000 1,200 11,200 11.11 1,244.44
2 – Materials 9,000 200 9,200 11.11 1,022.22
3 – Plant 1,000 1,000 11.11 111.11
4 – Auxiliary La- 500 500 11.11 55.55
bour/Transport
5 – Subcontractor 3,000 3,000 11.11 333.33
Services
6 – Misc 500 1,000 1,500 11.11 166.67
Total 24,000 2,400 26,400 2,933.33
In the above example, the markup rates for GA and R+P have been set as 8% and
2% (not visible in the table) for all cost codes, to give a value of 11.11% converted
to TJCs in each line.
The conversion to TJC is carried out individually for each cost code (line). If the
company has defined different markup rates per cost code, this therefore also
results in different converted values per line.

Cost code GA R&P AM DCM for

of turnover of turnover of turnover GA/R+P
in % in % in % in % of TJCs
1 – Hours/Labour 12.00 3.00 0.00 17.65
2 – Materials 8.00 3.00 0.00 12.36
3 – Plant 8.00 3.00 0.00 12.36
4 – Auxiliary Labour/ 8.00 3.00 0.00 12.36
Transport
5 – Subcontractor 4.00 2.00 0.00 6.38
Services
6 – Misc 8.00 3.00 0.00 12.36
The values of the first three columns can be compared with estimate details,
and the values in the fourth column are DCMs calculated from these (common
DCMs for GA/R+P/AM). The calculation of the URs of the items works with the
values of the 4th column! The amount to be allocated is calculated using the
values from the first three columns, and the values of the 4th column are results
for post-processing in the items. At the latest, this statement will become import-
ant if there is a manual adjustment of the values of the 4th column, which is also
explained in a later chapter.
To begin with, we will remain with the project state as currently shown, in which all
cost components of the DJCs and GCs (!) receive a DCM for GA/R+P/AM of 11.11
%. This applies both for standard items and all non-standard item types, as long as
the user (you) has not deliberately adjusted in individual items. The types of inter-
vention that can be made are explained further below.
The calculated item total for GA/R+P/AM is split across the individual components
as follows, shown using the project example with markups of 8 % for GA, 2 % for
R+P and 0 % for AM:
Cost code GA/R+P GA R&P AM

1 – Hours/Labour 1,244.44 995.55 248.89 0.00
2 – Materials 1,022.22 817.78 204.44 0.00
3 – Plant 111.11 88.89 22.22 0.00
4 – Auxiliary Labour/Trans- 55.55 44.44 11.11 0.00
port
5 – Subcontractor Services 333.33 266.67 66.66 0.00
6 – Misc 166.67 133.33 33.33 0.00
Total 2,933.33 2,346.66 586.67 0.00
GA = [(1244.44 x 8) / (8 + 2)] + [(1022.22 x 8) / (8 + 2)] + etc.
See also

2 GA + AM + R+P: 8+3+2 = 8.00+2.00+3.00 = 13.00 [} 78]

2 G&A+AM+RP: 8+3+2 = 13 / (100 - 13) = 14.94 [} 77]
5.4.4.6.2 GA + AM + R+P: 8+3+2 = 8.00+3.34+2.27 = 13.61

▪ The total TJC + GA is marked up with the markup rate for AM
▪ The markup rate for AM relates to the total TJC + GA
DCM% = (100% + GA%) + [100% +(AM% / (100% - AM%))] x [100% + (R+P% /
(100% - R+P%))]
DCM% = (100% + 8%) + [100% +(3% / (100% - 3%))] x [100% + (2% / (100% -
2%))] = 13.61%
5.4.4.6.3 GA + AM + R+P: 8+3+2 = 8.00+3.24+2.27 = 13.51

DCM% = (100% + GA%) + (100% + AM%) x [100% + (R+P% / (100% - R+P%))] -
100%
DCM% = (100% + 8%) + (100% + 3%) x [100% + (2% / (100% - 2%))] - 100% =
13.51%
5.4.4.6.4 GA + AM + R+P: 8+3+2 = 8.00+3.00+2.27 = 13.27

DCM% =
[100% +(GA% + AM%)] x [100% + (R+P% / (100% - R+P%))] - 100%
DCM% =
[100% +(8% + 3%)] x [100% + (2% / (100% - 2%))] - 100% = 13.27%

5.4.4.6.5 G&A+RP+AM: 8+2+3 = 11.11+3.00+0.33 = 14.44

▪ The total job costs are marked up with the markup rates for GA, AM and R+P
▪ The markup rates for GA, AM and R+P relate to the tender total
▪ The markup rates should mutually influence each other
DCM% =
100% + [100% + (GA% + R+P%) / (100% - (GA% + R+P%))]
x (100% + AM%) - 100%
DCM% =
100% + [100% + (8% + 2%) / (100% - (8% + 2%))]
x (100% + 3%) - 100% = 14.44%
5.4.4.6.6 GA + AM + R+P: 8+3+2 = 8.70+3.09+2.04 = 13.83

DCM% =
[(100 x GA%) / (100% - GA%)]
+ [(100 x R+P%) / (100% - R+P%)]
+ [(100 x AM%) / (100% - AM%)]
DCM% =
[(100 x 8%) / (100% - 8%)]
+ [(100 x 2%) / (100% - 2%)]
+ [(100 x 3%) / (100% - F%)] =
13.83%
5.4.4.6.7 G&A+AM+RP: 8+3+2 = 13 / (100 - 13) = 14.94

▪ The markup rates for GA, AM and R+P relate to the tender total
▪ The markup rates should mutually influence each other
Tender total = 100 %
TJC% = 100% - GA% - R+P% - FZ% - AM%
Markup rate on TJC = x %
(100% - p%) x x% = 100 x p%
DCM% = (100 x p%) / (100% - p%)

DCM% = [100 x (8% + 2% + 3%)] / [100% -(8% + 2% + 3%)] = 14.94%
5.4.4.6.8 G&A+AM+RP: 8+3+2 = 8.00+3.00+ 2.22 = 13.22

DCM for GA/R+P/AM = (100 % + GA % + AM %) (100 % + R+P %) – 100 %
DCM for GA/R+P/AM
=(100 % + 8 % + 3 %) x (100% + 2 %) – 100 %
=(111 %) x (102 %) – 100 % = 13.22 %
AM is therefore included in the allowance costs to be marked up with R+P.
5.4.4.6.9 GA + AM + R+P: 8+3+2 = 8.00+2.00+3.00 = 13.00

= GA % + R+P % +AM %
DCM for GA/R+P/AM= 8% + 2% + 3% = 13.00 %
5.4.4.7 Calculation of the GCs and the DJCs for GCs

After the DJCs, the GCs are then determined, since the total job costs are required
as a basis for calculation in further steps.
TJC(Total job costs) = (DJC + GC)
The general conditions (GC) are estimated in the items of the GC-BoQ (there can
also be several GC-BoQs) in the same way as the submitted items with cost codes.
The GCs can then also be analysed by cost code.
Together with the DJCs of the standard items, the above project example then has
the following analysis:
Cost code DJCs of the standard GC Total job costs =

items DJCs + GCs
1 – Hours/Labour 10,000 1,200 11,200
2 – Materials 9,000 200 9,200
3 – Plant 1,000 1,000
Transport
5 – Subcontractor Ser- 3,000 3,000
vices

6 – Misc 500 1,000 1,500

Total 24,000 2,400 26,400
The amount of the GCs is then converted to a direct job cost by allocating the total
of the GCs to the total of the DJCs of the standard items:
DJCs for GCs = 100 x (2400 / 24000) = 10.00%
If nothing is changed, a markup of 10% of the costs is applied to each cost portion
in the price calculation of the items in order to take the GCs into consideration. In
the above case, the GCs are equally distributed across all cost portions. The entire
project is then represented as follows in the total of the standard items:
Cost code DJCs of the GC Amount

standard markup from GC
items in % markup
1 – Hours/Labour 10,000 10.00 1,000
2 – Materials 9,000 10.00 900
3 – Plant 1,000 10.00 100
4 – Auxiliary Labour/Transport 500 10.00 50
5 – Subcontractor Services 3,000 10.00 300
6 – Misc 500 10.00 50
Total 24,000 2,400 2,400
The above individual amounts from the GC markup no longer have anything to do
with the costs in the individual cost codes. For example, the amount 1,000.00 is a
markup amount on the labour costs of the items, without 1,000.00 being the
amount for labour costs in GCs; this would be 1,200.00. GCs allocated per DCM at
the destination only represent "money".
As the user, you can replace the calculated DCMs with fixed DCMs for individual
cost codes, which will make the program recalculate the other remaining DCMs.
This is explained further below. To begin with, we will remain with the equally cal-
culated DCMs for GCs, as shown above.
In this case, the DJCs of all standard items receive a DCM for GCs to the amount
of 10.00 %. As long as the user (you) does not intervene, all non-standard items
also receive the same markup.
5.4.4.8 Working principle of the method

The tender total is calculated according to the following principle:
DJC (Direct job costs of the items to be submitted)

+ GC (General conditions, estimated in the GC-BoQ)
= TJC (Total job costs)
+ G&A (General and administrative costs, estimated via a surcharge
rate based on the TJCs)
+ AM (Additional markup, e.g. technical GCs, estimated via a sur-
charge rate based on the TJCs)

= Cost price
+ R+P (Risk and profit, estimated via a surcharge rate based on the
TJCs)
= Tender Total
When estimating the GCs to be applied, you must orient yourself as closely as pos-
sible to the actual scope. This is usually just the standard items of the enquiry. It is
not normally known whether the non-standard item types that are included are
used. The partial analysis of the DJCs is thus only important for standard items.
The precise scope of the standard items may be uncertain. In cases of doubt, at
least perform a check of the submitted quantities (= BoQ quantities) for the most
important items. The results of this quantity check are the adjusted quantities or
billing quantities (=AQ quantities), which are entered separately from the BoQ
quantities. The GCs to be estimated will thus be oriented on the scope of the
standard items for AQ quantities.
If non-standard item types are used later, the expenses in the GCs will generally
only become larger than estimated if the output volume from non-standard items
takes on a larger scope or if specific technical requirements must be created for
this. You can attempt to estimate certain GC costs for non-standard items in the
Tender Estimate module. The program enables this sort of separate consideration
and processing.
In the course of the calculation of the DCM, the estimated GC will be allocated to
the DJC. The "standard" GCs are allocated to the DJCs of the standard items, and
special GCs for optional items can be determined and allocated to the DJCs of the
optional items (the latter is only possible in the Enhanced Allowance). It is up to
you, the user, whether to select the DJCs with BoQ quantities or with AQ quantities
as the allowance base. In any case, this allowance of the GCs to the DJCs is the
reason that the DJCs of the standard items must be assessed separately from the
DJCs of the non-standard items.
For the estimate using the grand total, you will therefore know the tender total be-
fore the unit rates of the items have been determined. The direct job costs with
which the unit rates of the items can then be calculated from their DJCs are only
calculated or partially predefined afterwards. All of this preparatory work for calcu-
lating the unit rates is carried out in the Allowance.
Direct job costs are calculated according to the following principle, that amounts to
be allocated are allocated to the DJCs of the standard items.
DJCs of the standard items
= Basis for estimating the required allowance amounts
DJCs of the standard items
= Basis for allowance of the allowance amounts
= Allowance base
A direct job cost (DJC) is generally calculated as follows:
DJC in % = 100 x (Allowance amount / Allowance base)
DJC for BoQ quantity = 100 x (Allowance amount / DJC of the standard item for
BoQ quantity)
DJC for AQ quantity = 100 x (Allowance amount / DJC of the standard item for AQ
quantity)

Further options for allowance are described later.

In the items, the direct job costs determined in this way are applied to the costs to
give the unit rate.
Very simplified, the following thus initially applies:
UR = DJC(100% + DJC%)
The calculated direct job costs are also applied to the DJCs of the non-standard
item types. If this should be done, then additional revenues to cover the GCs and
GA are obtained with the prices calculated in this way. Further options for handling
non-standard items are also described later.
In the above example, the calculations of the allowance amounts always required
are based on the cost base of the standard items to the amount of 24,000.00. The
calculated allowance amounts are allocated to this amount to give percentage dir-
ect job costs.
5.4.5 Evaluation of the direct job costs (DJC)

The estimate starts with determination of the costs of the submitted services and
services to be submitted. These costs are referred to as the "direct job costs" or
"direct costs". This cost total is subdivided according to cost code, where the detail
depends on the cost code structure or the use of the cost codes in the estimate.
The cost analysis is based on the cost code structure, with corresponding calcula-
tion of totals up to the item, division and BoQ totals.
The DJC totals per cost code are also analysed separately based on the type of
item, since not all item types play the same role in the calculation of the direct cost
markups (= allowance factors). It is important to differentiate the DJCs according to
the following item types:
▪ Standard items including base items
▪ Optional items
▪ Alternative items
▪ DW/T+M items
The tender total is only calculated from items which are output with an item total
(IT) in the tender.
Example of the DJC totals of all items (with deliberately small numbers)
DJC
Cost code Standard Optional Alternative DW/T+M
items items items items
1 – Hours/Labour 10,000 500 100 200
2 – Materials 9,000 300 80 100
3 – Plant 1,000 50 20 100


Transport
5 – Subcontractor Ser- 3,000 100
vices
6 – Misc 500
Total 24,000 1,000 200 400
Example of the DJCs in a standard item
Cost code DJC DJC

Item per UoM Item for quantity = 10.00
1 – Hours/Labour 50.00 500.00
2 – Materials 35.00 350.00
3 – Plant 5.00 50.00
4 – Auxiliary Labour/
Transport
5 – Subcontractor Ser- 10.00 100.00
vices
6 – Misc
Total 100.00 1000.00
The above examples are used further in the following descriptions.
5.4.6 Estimate method

You can select between two options for the estimate:
estimate using the grand total

After the DJC for all items have been estimated, the contributions for the named
variables are determined separately. The sum of this determination is named the
"allowance amount" and added to the sum of the estimated DJCs. This gives the
grand total of the tender. It is initially independent of the splitting by item. The
amounts to be allocated to the items are then applied to the allowance base of the
DJCs, to give the calculated direct cost markups (factors and percentages). In the
items, these direct cost markups are applied to the DJCs per unit of measure es-
timated there, to give the unit rate.
This method is also referred to as the estimate using the grand total (tender
total), since the grand total is known before the unit rates of the items have been
determined.

Estimate by markups (general)

The direct cost markups have been determined independently of the current pro-
ject estimate. These are used in the project estimate as predefined markups, which
immediately gives the unit rate for each item once the DJCs are calculated. Here,
the GC, GA, R+P and AM (where applicable) are mostoften combined into a single
factor or percentage.
This method is referred to as Estimate-by-Markup, since predetermined markups
are used instead of calculated direct cost markups.

International Allowance
6 International Allowance
6.1 Preliminary remarks

The project for the international allowance must be created in the project mode
With Local / Foreign Currency.
In the international estimate only one single allowance method is offered. It is the
two-step allowance without area balancing.
Each cost code has a currency unit. Therefore, all DJC (per item, per group, per
Bill of Quantities, for the entire project) can be split into a loLocal and Foreign por-
tion. This is done as follows:
▪ In the currency unit catalog, a currency is designated as the national currency.
▪ The detail line has a CoC with CUR = national currency;
the DJC of the detail line is included in the Local Portion.
▪ The detail line has a CoC with CUR <> national currency;
the DJC of the detail line is included in the Foreign Portion.
6.2 Calculate allowance amount for G+A, R+P and

additional markup
The following percentages can be entered for each cost code in the Allowance and
for each major BoQ allowance area (short: MBoQ area):
▪ G+A Markup Local
▪ G+A Markup Foreign
▪ R+P Markup Local
▪ R+P Markup Foreign
▪ Additional Markup Local
▪ Additional Markup Foreign
In this way, it is possible to split the markup amount for G+A, R+P and Additional
Markup (short: GRPAM) into a local portion GRPAM (Local) and a foreign Portion
GRPAM (Foreign), so that:
GRPAM = GRPAM(Local) + GRPAM(Foreign)
If the percentages are based on revenues, they are distributed on the DJC in the
usual way. This explains the following example:
▪ based on revenue
– G+A Markup Local = 5 %
– R+P Markup Local = 2 %
– Additional Markup Local = 0 %
– G+A Markup Foreign = 10 %
– R+P Markup Foreign = 3 %
– Additional Markup Local = 0 %
▪ based on DJC
– Total = (20 * 100) / (100 - 20) = 25 %

– G+A Markup Local = 5 % * (25 / 20) = 6.25 %

– R+P Markup Local = 2 % * (25 / 20) = 2.50 %
– Additional Markup Local = 0 % * (25 / 20) = 0 %
– G+A Markup Foreign = 10 % * (25 / 20) = 12.50 %
– R+P Markup Foreign = 3 % * (25 / 20) = 3.75 %
– Additional Markup Local = 0 % * (25 / 20) = 0 %
The following table explains how to calculate the GRPAM using an example. How-
ever, for the markup percentages, "smooth values" are chosen to make it easier to
reconstruct the invoice. In addition, it is assumed for reasons of space that the ad-
ditional markup = 0.
CoC DJC Local GC Local DJC + GC G+A R+P GRPAM G+A R+P GRPAM
+ DJC For- +GC For- Local Local Local Foreign Foreign Foreign
eign eign
1 2 3 4=2+3 5 6 7=4*(5+ 8 9 10=4*(8+
6) 9)
1 4000 2000 6000 8% 2% 600 13% 2% 900
2 6000 3000 9000 5% 5% 900 8% 2% 900
3 10000 5000 15000 4% 6% 1500 9% 1% 1500
Total 20000 10000 30000 3000 3300
GRPAM = GRPAM(Local) + GRPAM(Foreign) = 3000 + 3300 = 6300
6.3 Calculate Allowance for GC

With the two-step allowance without area balancing, the GC BoQ can be distrib-
uted to the major BoQ areas as a percentage. In this way, an GC amount results
for each major BoQ area.
Since each CoC has a currency unit, this GC amount can be distributed by the pro-
gram into a local portion GC (local) and a foreign currency portion GC (foreign),
so that the following applies:
▪ GC = GC(Local) + GC(Foreign)
However, you may want to split the GC amount differently into local and foreign
currency. In this case, you can enter the following value:
PERC(Foreign) = desired percentage of foreign currency in GC amount
In this case, the program calculates the GC portions as follows:
▪ GC(Foreign) = (PERC(Foreign) / 100) * GC
▪ GC(Local) = ((100 - PERC(Foreign)) / 100) * GC
When calculating GC factors and GRPAM factors (see Calculate GC and GRPAM
factors [} 86]) then this splitting up of the CG is used.
Example:
GC(Local) GC(Foreign) GC

the splitting calculated by the pro- 7000 3000 10000

gram
user-requested splitting PERC(For- 4000 6000 10000
eign) = 60 %
significant splitting in determining 4000 6000 10000
the allowance factors
6.4 Calculate GC and GRPAM factors

This allowance is carried out in two steps:
1. 1. Step: GC Allowance
The amounts GC(Local) and GC(Foreign) are allocated to the entire DJC:
DJC(Total) =DJC(Local) + DJC(Foreign)
this results in two GC Factors per cost code:
– GC Factor(CoC, Local) = GC Factor Local for CoC
– GC Factor(CoC, Foreign) = GC Factor Foreign for CoC
▪ 2. Step: GRPAM Allowance
The amounts AWF(Local) and AWF(Foreign) are allocated to the entire DJC +
GC:
DJC(Total) + GC(Total) = DJC(Local) + DJC(Foreign) + GC(Local) +
GC(Foreign)
This results in two GRPAM Factors per cost code:
– GRPAM Factor(CoC, Local) = GRPAM Factor Local for CoC
– GRPAM Factor(CoC, Foreign) = GRPAM Factor Foreign for CoC
The following example explains how to calculate the factors.
6.4.1 GC Allowance
At the request of the user (see Calculate Allowance for GC [} 85]) the following ap-
plies:
▪ GC(Local) = 4000
▪ GC(Foreign) = 6000
1. Calculating GC Factors Local
Cost code DJC(Total) Default GC- GC Portionl

GC-Factor Factor(Local) (Local)
(Local)
1 2 3 4 5=2*4
1 4 000 35 % (calculated) 1 400
2 6 000 10 % 10 % 600
3 10 000 20 % 20 % 2 000
Total 20 000 4 000
1. Calculating GC Factors Foreign

Cost code DJC(Total) Default GC GC Factors GC Portion (For-

Factor (Foreign) (Foreign) eign)
1 2 3 4 5=2*4
1 4 000 20 % (calculated) 800
2 6 000 20 % 20 % 1 200
3 10 000 40 % 40 % 4 000
Total 20 000 6 000
6.4.2 GRPAM Allowance

According to the example (see 2), the following applies:
▪ GRPAM(Local) = 3000
▪ GRPAM(Foreign) = 3300
1. Calculating GRPAM Factors Local
Cost DJC GC Por- DJC(Total) + Default GRPAM Factor GRPAM Factor

code Total tion(Local) GC Portion GRPAM Factor (Local) (Local)
GC Por- (Total) Local
tion(Foreign)
1 2 3 4=2+3 5 6 7=4*6
1 4000 1400+800=220 6200 22.90 % 1420
0 (calculated)
2 6000 600+1200=180 7800 10 % 10 % 780
0
3 10000 2000+4000=60 16000 5% 5% 800
00
Total 20000 10000 30000 3000
1. Calculating GRPAM Factors Foreign
Cost DJC GC Por- DJC(Total) + Default GRPAM Factor GRPAM Por-

code Total tion(Local) + GC Por- GRPAM Factor (Foreign) tion (Foreign)
GC Por- tion(Total) (Foreign)
tion(Foreign)
1 2 3 4=2+3 5 6 7=4*6
1 4000 1400+800=220 6200 27.41 % 1700
0 (calculated)
2 6000 600+1200=180 7800 0% 0% 0
0
3 10000 2000+4000=60 16000 10 % 10 % 1600
00
Total 20000 10000 30000 3300

6.5 Calculate UR
6.5.1 Formula for unit price calculation

The unit price of a standard item without allowance and manual markup is calcu-
lated as follows:
For i = 1, ..... n :
DJC(i) : Total DJC of the item in CoCi
GC-Fac(i, L) = GC Factor Local of CoCi
GC-Fac(i, F) = GC Factor Foreign of CoC KOAi
GRPAM Fac(i, L) = GRPAM Factor Local of CoCi
GRP Fac(i, F) = GRPAM Factor Foreign of CoCi
Then:
UR = DJC(1) * (1 + DJC-Fac(1, L) + GC-Fac(1, F)) * (1 + GRPAM Fac(1, L) +
GRPAM Fac(1, F))
+ ...........................
+ ...........................
+ DJC(n) * (1 + GC-Fac(n, L) + GC Fact(n, F)) * (1 + GRPAM Fac(n, L) + GRPAM
Fact(n, F))
6.5.2 Example for unit price calculation

The major BoQ area consists of two items, both of which have the BoQ quantity =
1. You can find the DJC in the following table:
Cost Item 1 Item 2 DJC Total

code
DJC Local DJC For- DJC Local DJC Foreign
eign
1 1500 500 1000 1000 4000
2 0 3000 3000 6000
3 4000 2 000 0 4000 10000
Total 5500 5500 4000 5000 20000
Calculating the GC portions

Cost DJC GC Factor GC Portion GC Factors GC Portion DJC (Total) +
code (Total) (Local) (Local) (Foreign) (Foreign) GC (Portion)
1 2 3 4=2*3 5 6=2*5 7=2+4+6
Calculation for item 1
1 2000 35 % 700 20 % 400 3100
2 3000 10 % 300 20 % 600 3900
3 6000 20 % 1200 40 % 2400 9600

Total 11000 2200 3400 16600

Itm 1

1 2000 35 % 700 20 % 400 3100
2 3000 10 % 300 20 % 600 3900
3 4000 20 % 800 40 % 1600 6400
Total 9000 1800 2600 13400
Itm 2
Total 20000 4000 6000 30000
Calculating the GRPAM portions

Cost DJC(Total GRPAM GRPAM GRPAM GRPAM Por- UR
code )+GC(Por- Factor (Local) Factor (Local) Factor (For- tion (Foreign)
tion) eign)
1 2 3 4=2*3 5 6=2*5 7=2+4+6
1 3100 22.90% 709.90 27.41 % 849.71 4659.61
2 3900 10.00 % 390.00 0.00 % 0.00 4290.00
3 9600 5.00 % 480.00 10.00 % 960.00 11040.00
Total 16600 1579.90 1809.71 19989.61
Itm 1

1 3100 22.90 % 709.90 27.41 % 849.71 4659.61
2 3900 10.00 % 390.00 0.00 % 0.00 4290.00
3 6400 5.00 % 320.00 10.00 % 640.00 7360.00
Total 13400 1419.90 1489.71 16309.61
Itm 2
T Total
30000 2999.80 3299.42 36299.22

The calculated tender total is:

TT_1=DJC(Total)+GC(Total)+GRPAM(Total)=20000+10000+6300=36300
But IT is:
TT_2=BoQ-Quantity(Item 1)*UR(Item 1)+BoQ-Quantity(Item 2)*UR(Item 2)
= 1*19989.61+1*16 309.61
= 36299.22
The difference between TT_1 and TT_2 is due to the fact that in the example
the factors were only calculated with 2 digits after the decimal point.
6.6 Allowances Sheet

The following allowance sheets can be printed for each major BoQ area and the
entire project:
▪ Allowance sheet with amounts for Local
▪ Allowance sheet with amounts for Foreign
▪ Allowance sheet with item totals (Item Total = Amount Local + Amount Foreign)
All three allowance sheets are essentially structured in the same way as the allow-
ance sheet of the Two-step allowance without without area balancing for a cur-
rency.
The following are the allowance sheets for the example. In this example, we as-
sume that the GCs that are part of our major BoQ area are divided into local and
foreign currency as follows.
Cost code GC Local GC Foreign Total

1 2000 0 2000
2 3000 0 3000
3 2000 3000 5000
Total 7000 3000 10000
6.6.1 Allowances Sheet Local

Cost Description Standard IT (Non- GC Total TJC % % TT
code Itm Std) with
IT
1 HRS/WAGE 2500 2000 4500
2 MATERIALS 3000 3000 6000
3 PLANTS 4000 2000 6000
Total TJC (without nM and 9500 7000 16500
Corporate)
GC on Non Standard
Items

GA 1020 510 1530

R+P 980 490 1470
AM
Advanced Allocation
FM on Advanced Al-
lowance
Total Tender Total 1 11500 8000 19500
Corporate Work
DJC of nM-Items
Total Est. Tender Total 11500 8000 19500
Manual markup
Deficit - 3000
Total Tender Total Net 16500
Calculation of line GC
GC on standard item = (GC Total in CoC 1) * (GC Markup Local in CoC 1)
+ (DJC Total in CoC 2) * (GC Markup Local in CoC 2)
+ (DJC Total in CoC 3) * (GC Markup Local in CoC 3)
= 4000 * 0.08 + 6000 * 0.05 + 10 000 * 0.04 = 1020
GC on GA + (GC Total in CoC 1) * (GC Markup Local in CoC 1)

+ (G+A Total in CoC 2) * (G+A Markup Local in CoC 2)
+ (G+A Total in CoC 3) * (G+A Markup Local in CoC 3)
= 2000 * 0.08 + 3000 * 0.05 + 5 000 * 0.04 = 510
▪ The lines R+P and AM are calculated in the same way
▪ The tender total net is calculated as follows:
TT(Net) = DJC(Local) + GC Portion(Local) + GRPAM Portion(Local)

= 9500 + 4000 + ROUNDED(2999.80)
= 9500 + 4000 + 3000 = 16500
The deficit of -3000 arises from the fact that the GC was split by specifying a
percentage factor of 60% for foreign exchange.
GC(Local) GC(Foreign) GC
the splitting calculated by the program 7000 3000 10000
user-requested splitting 4000 6000 10000
PERC(Foreign) = 60 %
Difference - 3000 + 3000

6.6.2 Allowance Sheet Foreign

Cost Description Stand- IT (Non- GC Total TJC % % TT
code ard Itm Std)
with IT
1 HRS/WAGE 1500 0 1500
2 MATERIALS 3000 0 3000
3 PLANTS 6000 3000 9000
Total TJC (without nM and Corpor- 10500 3000 13500
ate)
GC on Non Standard Items
GA 1900 950 2850
R+P 300 150 450
AM
Advanced Allocation
FM on Advanced Allowance
Corporate Work
DJC of nM-Items
Manual markup
Deficit + 3000
All values on the Allowance Sheet Foreign are determined in the same way as the
Allowance Sheet Local.
6.6.3 Allowance Sheet Total
Cost Description Stand- IT GC Total TJC % TT

code ard (Non- %
Itm Std)
with
IT
1 HRS/WAGE 4000 2000 6000
2 MATERIALS 6000 3000 9000
3 PLANTS 10000 5000 15000
Total TJC (without nM and 20000 10000 30000
Corporate)
GC on Non Standard
Items

GA 2920 1460
R+P 1280 640
AM
Advanced Allocation
FM on Advanced Allow-
ance
Corporate Work
DJC of nM-Items
Manual markup
Deficit

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Integrated Software Solution for model based Design and Construction

RIB Software GmbH

RIB Software GmbH

, RIB iTWO, ARRIBA, STRATIS, DIGIMASS, RIBTEC, TRIMAS,

2 Allowance 03/05/2022 © RIB Software GmbH

1 The allowance in the estimate document............................................. 6

5 Direct cost markups and price calculation ........................................ 50

© RIB Software GmbH 03/05/2022 Allowance 3

5.4.4 Estimate using the grand total (tender total)........................................... 55

6 International Allowance ....................................................................... 84

4 Allowance 03/05/2022 © RIB Software GmbH

Before you begin...

Instructions for using the documents

Target(only in training documents and introductions)

Exercise(only in training documents and introductions)

Conclusion(only in training documents and introductions)

© RIB Software GmbH 03/05/2022 Allowance 5

1 The allowance in the estimate document

1.1 Adopt default values

Only if value = old default value (default)

Overwrite changed values only

6 Allowance 03/05/2022 © RIB Software GmbH

1.2 Allowances (property)

Template for price calculation

© RIB Software GmbH 03/05/2022 Allowance 7

1.2.1 Creating an allowance

8 Allowance 03/05/2022 © RIB Software GmbH

1.3 Select multiple cost codes

Insert new cost codes (select multiple individual entries)

Insert new cost codes (select multiple entries in a section)

1.4 Hierarchical cost codes table

© RIB Software GmbH 03/05/2022 Allowance 9

Delete cost code lines in cost codes table

10 Allowance 03/05/2022 © RIB Software GmbH

Structure view of allowance configuration procedure

2.1 Basic data (configuration/properties).

© RIB Software GmbH 03/05/2022 Allowance 11

With Markup Breakdown

Allowance method Tender Execution

Properties of the allowance

12 Allowance 03/05/2022 © RIB Software GmbH

© RIB Software GmbH 03/05/2022 Allowance 13

(Allowances Configuration dialog box)

Please note the following:

(Properties dialog box of the allowance)

14 Allowance 03/05/2022 © RIB Software GmbH

2.2 Cost Portions

© RIB Software GmbH 03/05/2022 Allowance 15

3.1 Calculation of the unit prices

16 Allowance 03/05/2022 © RIB Software GmbH

3.2 Allowance method with allowance area

3.2.1 Areawise allowance without area balancing

3.2.1.1 Editing the markups and DCMs

3.2.1.2 Assignment of the GC sections to the major BoQ areas

© RIB Software GmbH 03/05/2022 Allowance 17

3.2 Allowance method with allowance area

3.2.1 Areawise allowance without area balancing

3.2.1.1 Editing the markups and DCMs

3.2.1.2 Assignment of the GC sections to the major BoQ areas

© RIB Software GmbH 03/05/2022 Allowance 17

3.2.2 Areawise allowance with area balancing

3.2.2.1 Markups on GCs

20 Allowance 03/05/2022 © RIB Software GmbH

3.2.2 Areawise allowance with area balancing