CCEC Lec06 Overhead Ch. 6

7/31/2019 CCEC Lec06 Overhead Ch. 6

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Estimating in BuildingConstruction

Chapter 6 Overhead and Contingencies

Dr. Rafiq Muhammad ChoudhryHead, Department of Construction Engineering and Management-NIT

School of Civil and Environmental Engineering (SCEE)

National University of Sciences and Technology (NUST)Sector H-12, Islamabad


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Dr. Rafiq Muhammad ChoudhryHead, Department of Construction Engineering and Management, NIT SCEE, NUST 2

Overhead

Home Office Overhead

Items that cannot be readily charged to

any one project, but represent the cost ofoperating the construction company

Job Overhead Cost

Overhead expenses resulting in executing aspecific project


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Home Office OverheadAlso known as:

General overhead

Indirect overhead cost


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Home Office Overhead Rent

Office utilities

Office supplies

Postage

Insurance on office

Taxes on office Office equipment

Salaries

Executives

Accountants Estimators

Purchasing dept.

Store keepers

Secretaries


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Home Office Overhead

Advertizing

Books & magazines

Legal fees

Design costs

Donations

Travel

Vehicles for officestaff

Club and associationdues

Depreciation

Office equipment

See Fig 6.1 Home

office overhead andcost allocation


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Example 6.1

Home Office Cost Allocation:

Anticipated home office costs for fiscal year= $690,580

Anticipated sales volume for fiscal year

= $9,500,000

Home office cost allocation

= 690,580/9,500,00 = 7.3%


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Job OverheadAlso known as:

Project overhead

Direct overhead

Indirect field costs


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Job Overhead Includes

Salaries Superintendent

Assistantsuperintendent

Timekeeper

Foremen

Security

See Fig 6.2 Fieldstaff plan andestimate

Temporary office Rent

Utilities

Temporary Buildings

Barricades (& lights)

Enclosures (fence,

temporarydoors/windows,protection forequipment)


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Job Overhead Includes Temporary utilities

Power

Lights Heat

Phone

Water

Sanitary facilities

Toilets

Photographs

Surveys

Cleanup

Winter conditions

Protection of

property


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Schedule Needed to determine job overhead See Fig 6.3 Office Building

Process

List all activities

Assign durations

Sequence the activities

Calculate start and finish dates See Fig. 6.4 Activity Lest


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Precedence DiagramFigure 6.5


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Contingencies

For items overlooked or left outA sum of money or percentage

Often used as an excuse for poor

estimating practices Rational use for contingencies is for

price escalation


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Checklist

Estimate of Labor Number of weeks on the project x Weekly

rate

Persons to be relocated x cost per person Quantity required x productivity rate

Estimate of Material

Quantity required x unit cost Estimate of Equipment

Duration required x Monthly cost


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Read Chapter 1, 9 Book

Aggarwal, A. and Upadhyay, A.K. (2008).

Civil Estimating, Costing and Valuation.S.K.Kataria & Sons. New Delhi.


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Documents

CCEC Lec06 Overhead Ch. 6