GENG8020 Engineering Project Management Assignment:

Engineering Fees

Submitted By:

Farshad Lalgani

ID No 110109718

Submission Date: 06 February 2024

Submitted To:

Dr. Peter Bziuk

Question:
A client plans to construct a manufacturing plant that involves multiple engineering
disciplines.

Calculate the total engineering fees including taxes based on the following payment to the
Contractor:

Mechanical Works, $1,600,000

Electrical Works, $1,800,000

Earth Works, $900,000

Civil Works, $1,800,000

Environmental Works, $1,950,000

Basis B fees = 10%

There are no office fees.

The Contractor will receive a separate payment. Therefore, do not include the Contractor
payment in the engineering fees.

Taxes = 13%

Manufacturing Plant Cost

Environmental Works Mechanical Works

20% 20%

Civil Works Electrical Works

20% 20%

Earth Work
20%
Mechanical Works Electrical Works Earth Work Civil Works Environmental Works

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Solution:
The total engineering fees including taxes is determined by the below steps:

1. By adding all costs for works, we can get the total construction cost.

Given that,

Engineering Discipline Estimated Cost

Mechanical $1,600,000

Electrical $1,800,000

Earth Works $900,000

Civil Works $1,800,000

Environmental $1,950,000

Total $8,050,000

2. By multiplying the agreed engineering fees percentage by the total construction cost,
the engineering fees before taxes can be determined.

• Total construction cost= $8,050,000

• Engineering fees percentage (Basis B) = 10% (Given)

So, the Engineering fees before taxes is =10% * $8,050,000= $805,000

3. By multiplying the engineering fee (before taxes) by the tax rate, the taxes on the
engineering fees can be calculated.

• Tax= 13%

So now, taxes on Engineering fees=13%*$805,000=$104,650

4. By adding the taxes on the engineering fees to the engineering fee (before taxes), the
Total Engineering Fees (including taxes) can be found.

Therefore, the Total Engineering Fees, including taxes, for the construction of the
manufacturing plant amount is, $805,000+$104,650= $909,650

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 Construction fees Vs Engineering

Totl Engineering Fees

Tax On Engineering Fees

Engineering Fees(without tax)

Consttruction Cost

$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000