total project cost

Alcanar, Nehemias
De La Cruz, Airiz Faye
Navarra, John Andrei
Nicdao, Paula Isabelle
Ortiz, Nino Anton
Zacarias, Sharvin
What is total project cost?
● Includes all expenses related to the project, such as materials, labor, and
design services.
 01
components of the
total project cost
● Professional Engineering Costs
● Construction costs
● Legal and Land Costs
● Owners Costs, such as Project Administration, Staffing,
Financing, and Overhead
● Contingency Allowance for Unknowns
 02 Professional engineering costs
What exactly is it?

● Fees paid to Engineers

● Estimate of probable cost intended for professional engineers responsible

● Must be approved by client

 03
construction
Cost
● Expenses related to the actual project
processes or materials

● Includes cost of materials, labor, and

equipment
 04 legal and land costs
What exactly are these?

● related to acquiring permits

● usually outside the control of engineers

● Must be estimated with client

 05
owner
Cost
● Related to administration, staffing,
financing, and overhead.
 06 Contingency allowance
What exactly are these?

● for unknown expenses

● added to estimated probable cost at the start of the project

● reduction of this cost is possible

The total project cost for a construction project includes
several components: Professional Engineering Costs,
Construction Costs, Legal and Land Costs, Owners
Costs, and a Contingency Allowance.

a little summary of the concepts

02
professional
engineering cost
professional engineering cost

It is a part of the total project cost which

are costs based on the engineering
services. This may involve alternative or
phase implementation schemes which
add flexibility to the project.

Furthermore, Civil engineering services

are required for each of six typical phases
of construction projects. All services are
preferably performed by the same Civil
Engineer for consistency and efficiency.
 Six (6) Construction Project Phases:
1 study and report 4 bidding / negotiating

2 preliminary design 5 construction

3 final design 6 operation

professional engineering cost
● In the study and report phase, the costs included based on Civil Engineering
services are as follows: field or traffic surveys, planning analyses,
geotechnical explorations, and analyses.
● The estimated probable total cost of the project based on the study and
report phase must be understood to be preliminary in nature.
● Study and report phase is important as it determines the scope and
development of the entire project that includes the project’s overall capital
and lifecycle cost.
● During the final and construction phase, additional surveying and
geotechnical engineering services may be needed.
● Costs for additional or special engineering services may be required by
the client or recommended by the Civil Engineer
03
Construction
Cost
What is construction COSTs ?

● The total cost of the entire construction

project.

● Sometimes called “hard costs”

Contract sum

● is the price agreed with the contractor and

entered into the contract.

● Contract Sum can be adjusted

Cost PLANNING

● Used to analyzed the estimated cost during the pre and post

construction phases of the project.

Cost planning includes:

● Initial Cost Appraisal ● Pretender Estimates

● Elemental Cost Plans ● Contract Sum

● Approximate Quantities Cost Plans ● Approximate Quantities Cost Plans

Cost estimates

● Is the process of predicting the overall cost of a new building

project

● The method used to estimate actual cost will vary with the increase

in the amount of detail available.

1. Initial Cost Appraisal 4. Pre-Tender Estimates

2. Elemental Cost Plans 5. Contract Sum

3. Approximate Quantities 6. Final Account

Construction price
the cost of the entire construction of
the Project, including all supervision,
materials, supplies, labor, tools,
equipment, transportation and/or other
facilities furnished, used or consumed,
without deduction on account of
penalties, liquidated damages or other
amounts withheld from payment to the
contractor or contractors,
 Cost Index
Construction Cost Index is an
indicator of the average cost movement
over time of a fixed basket of
representative goods and services
related to Construction Industry.
Cost Indexes for different locations

● Cost and availability of labor.

● Cost of transportation of equipment and labor.

● Import duties and local taxes.

● Currency exchange rates.

 Capital Cost and operational cost
Capital Cost
Capital Cost are associated with one-off expenditure on the acquisition,
construction or enhancement of built assets and might include:

● Land or Property acquisition

● Commissions
● Statutory fees
● Consultant fees directly associated with the development
● Materials, plant and equipment
● Labour
● Fixtures and Fittings
● Project Insurance, Inflation, taxation and financing
● Internal costs directly associated with the development
 Capital Cost and operational cost
operational Cost
Operational cost incurred in a day-to-day operations might
include:

● Wages
● Utilities
● Maintenance and repairs
● Rent
● Sales
● General and administrative expenses
 Whole-life cost
It is also known as the lifetime cost, “cradle to grave,” or womb
to tomb.” Whole-life cost consider all costs associated with the
life of a building, from inception to construction, occupation and
operation and even ultimate disposal.

Whole-life cost also takes into account certain costs that are
usually overlooked, such as those related to environmental and
social impact factors.
 Hard cost and soft cost
HArd Cost
Hard costs are costs that are directly related to your construction project.
Some refer to these as brick-and-mortar costs, because these costs include
the structure, construction site and landscape. Hard costs might include:

● Labour, equipment and materials required to complete the built

structure.
● Site costs, such as utilities, drainage and so on.
● Landscape costs.
 Hard cost and soft cost
soft Cost
Soft costs are the indirect expenses involved in construction and
development that are not directly attributed to the physical construction.
Soft costs might include:

● Fees
● Land costs
● Off-site costs
● Loans accounting fees and interests
● Insurances and taxes
● Public relations and advertising costs
 04
LEGAL, LAND,
ADMINISTRATION, STAFFING
AND FINANCIAL COST
LEGAL, LAND, ADMINISTRATION,
STAFFING AND FINANCIAL COST
These are part of the probable total
costs and are estimated in coordination
with the client since they are usually
outside the knowledge and control of
the Civil Engineer. It includes audits,
land costs, the cost of issuing bonds,
interest for borrowed money during
construction, legal administrative
expenses and other services.
LEGAL, LAND, ADMINISTRATION,
STAFFING AND FINANCIAL COST
EXAMPLES:
■ Legal fees

■ Real estate and land acquisition fees

■ Building permit review fees

■ Printing (construction documents and spec books)

■ Builder’s Risk Insurance

■ Construction bond

■ Construction interest expense

05
contingency
allowance
what is contingency allowance?
A contingency allowance is an amount of money that
is set aside in a project budget or plan to cover
unexpected events or costs that may occur during the
project. This allowance is intended to help account for
the inherent uncertainty and risks that are associated
with any project or undertaking.
purpose of contingency allowance
● mitigate the risk of unexpected costs and to
provide a safety net in case of unforeseen events
such as bad weather, unexpected site conditions,
or cost overruns on materials and labor.

● Help ensure that your project is completed

successfully, without incurring any major delays or
budget overruns.
how is contingency allowance calculated?
Contingency allowances can be calculated in different ways, but a
common method is to allocate a percentage of the total budget or
estimated costs. The percentage chosen may depend on the level
of uncertainty and risk associated with the project, and can vary
from project to project. For example, a contingency allowance of
5-10% may be sufficient for a low-risk project, while a higher-risk
project may require a contingency allowance of 20% or more.
Estimated Project Cost Contingency allowance

P100,000 x 10% = P10,000

P100,000 + P10,000 = P110,000 (Total budget for the project)

Example of how a contingency allowance might be used in a
construction project:

Suppose a construction company is contracted to build a new office

building. The total cost of the project is estimated to be P200 million, and
the company decides to allocate a contingency allowance of 10% to
account for unforeseen events.

During the course of the project, unforeseen issues arise that require
additional work and expense, such as unexpected site conditions or
delays in receiving materials. These issues lead to an additional
P5,000,000 in costs. However, because the contingency allowance was
established, the construction company is able to cover these extra costs
without exceeding the budget or requiring additional funding.
It's important to keep track of the contingency allowance, and make sure
that we're not spending more than we need to. If we don't use all of the
contingency money, we can use it for other parts of the project or give it
back to the project owner.

In conclusion, contingency allowance is a vital part of construction

project planning and budgeting. It helps us manage the risk of
unexpected costs and keep the project moving forward, even when
things don't go exactly as planned."
Thank you!