CHARGING FOR CIVIL

ENGINEERING SERVICES
 CHARGES FOR ENGINEERING SERVICES ARE
USUALLY COMPUTED USING ONE OF SIX
METHODS:
1. SALARY COST TIMES MULTIPLIER PLUS DIRECT NON-SALARY
EXPENSE (“REIMBURSABLE”).
2. HOURLY BILLING RATES PLUS REIMBURSABLES.
3. PER DIEM
4. COST PLUS FIXED FEE ("CPFF’)
5. FIXED PRICE
6. PERCENTAGE OF CONSTRUCTION COST (“PERCENTAGE”).
COST PLUS FIXED FEE
• The cost plus fixed fee basis requires, as a prerequisite to equitable
negotiations, that the client and the civil engineer define and agree
upon the scope of services the civil engineer is to perform.
• The scope of services, cost estimate, and fixed fee should be
incorporated into the client-engineer agreement.
Under a cost plus fixed fee agreement, the Civil Engineer is reimbursed
for the actual costs of all services and supplies related in the project
including:
1. Salary costs, as previously defined
2. Overhead, as previously defined (The Civil Engineer should be
prepared to support the basis for overhead charges.)
3. Direct non-salary expenses, as previously defined
4. Fixed fee, an amount to compensate the Civil Engineer for
contingencies, interest on invested capital, readiness to serve, and
profit.
FIXED PRICE
• Refers to Eight-Hour Day
• The fixed price method of compensation is frequently used for
investigations and studies and for basic services on design type projects
where the scope and complexity of the assignment are clearly and fully
defined.
• The fixed price amount can be calculated as the sum total of estimated
engineering costs for salaries overhead and non salary expenses, an
allowance for contingencies, interest on invested capital, readiness to
serve, and a reasonable amount for profit.
PERCENTAGE OF CONSTRUCTION COST
• Construction Cost is defined as the estimated total cost of
constructing the facility to be covered by the proposed detailed design
or construction supervision services, excluding the fees and other costs
of such services, the cost of land and right-of-way, and legal and
administrative expenses.
The percentage fee shall consider the type, complexity, location, and
magnitude of construction cost of the project and shall not exceed the
following percentages of estimated construction cost:
a. Feasibility studies-three percent (3%)
b. Detailed engineering design-six percent (6%)
c. Detailed architectural and engineering design-eight percent (8%)
d. Construction supervision-ten percent (10%)
 SCHEDULE OF MINIMUM FEES
CERTAIN PRINCIPLES SHOULD BE OBSERVED AS FOLLOWS:
• When doing work on foreign assisted projects, or in projects where
international consultants participate, the Civil Engineer performing similar or
equivalent work, should accept compensation that approximates the
international standard rates
• Civil Engineers regularly employed in the private sector shall have minimum
compensation corresponding to 10% more than the minimum wage prevailing
in the region as basic monthly salary.
• Civil Engineers employed in the government sector shall have a minimum
basic monthly salary corresponding to appropriate entry positions provided
by the Civil Service Commission.