School of Engineering and Architecture

Civil Engineering Department

General Civil Engineering

Chapter 6: Total Project Cost

CE Laws, Ethics and Contracts

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Objective After this chapter, the student should be able to:

 determine the total cost of the construction project

Content This chapter focuses on

 Total Project Cost
 Schedule of Minimum Basic Fee

Related These are supplemental content necessary for this chapter

 PICE (2003), Manual of Professional Practice for Civil
Readings Engineers, 2nd Edition. Manila: Philippine Institute of
Civil Engineers, Inc.
 HAU BOOKs 24x7
 https://www.bbc.co.uk/ethics/introduction/intro_1.shtml

TOTAL PROJECT COST

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Chapter 6- Total Project Cost

The probable total capital cost, often used to establish budgets for a typical project, made up of:
1. Professional engineering costs.
2. Construction costs.
3. Legal and land costs.
4. Owner’s costs, including project administration, staffing, financing, and other overheard.
5. Contingency allowance for unknowns.

Professional Engineering Costs

A Civil Engineer is often engaged to make a study and to render a planning report on the
contemplated project, including alternative solutions, layouts, and locations along with initial
estimates of the probable project cost. These may involve alternative or phased implementation
schemes which add flexibility to the project.

The study and report phase may include the cost for field or traffic surveys, planning analyses,
geotechnical explorations and analyses, in addition to the direct engineering costs.
The costs of coordination, evaluation implementation and compliance have increased
correspondingly. The extent of these concerns may not be identified during the study and report
phase, and sometimes not even after final plans and specifications have been prepared. As a result,
the estimated probable total cost of the project based on the study and report phase must be
understood to be preliminary in nature.

Construction Cost

The study and report phase of the project usually includes a preliminary estimate of the
construction cost for the contemplated project and for alternative project configurations. Such cost
estimates are approximate, since the final design drawings and specifications have not yet been
prepared. In addition, timing of the construction work must be considered because inflation will
affect the construction cost.

Construction Cost is 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 administrative expenses of the agency.

Legal, Land, Administration, Staffing and Financial Costs

These costs, which include audits, the cost of issuing bonds, land costs, and interest for borrowed
money during construction, are part of the probable total project cost and can best be estimated
in cooperation with the client because they are usually outside the knowledge and control of the
Civil Engineer.

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Chapter 6- Total Project Cost

Contingency Allowance

To provide for intangible costs, contingencies should routinely be added to the basic cost estimate.
It is common practice to add 20% or more to the estimated probable total project cost at the
completion of the study end report phase, reducing this to perhaps 10% at the completion of final
design and perhaps to 5% when the construction bids become known. Larger or more complex
projects may require higher contingencies.

SCHEDULE OF MINIMUM BASIC FEE

Part A – Minimum Compensation for Civil Engineer as Prime Professional.

a. Group 1 - Simple structures such as lofts, warehouses, garages, sheds, market buildings, and
comparable projects of one but not more than two stories.

Project Construction Cost Minimum Basic Fees

P10 Million and less 6%
Over P10 million to P20 million P 600,000 plus 5.5%
P1,150,000 plus 4.5% of excess
Over P20 million to P30 million of P20 million
P1.600,000 plus 3.5% of excess
Over P30 million of P30 million
b. Group 2 – Buildings of 3 stories up to 14 stories, towers, tanks, exhibition buildings,
memorials, industrial buildings, simple bridges, low dams, piers, wharves, bins and slios and
comparable projects.

Project Construction Cost Minimum Basic Fees

P10 Million and less 7%
P 200,000 plus 6.5% of excess
Over P10 million to P20 million of P10 million
P1,350,000 plus 5.5% of excess
Over P20 million to P30 million of P20 million
P1.900,000 plus 4.5% of excess
Over P30 million of P30 million
c. Group 3 – Buildings with fifteen (15) or more floors, long span and complex bridges, high
dams, major portworks power plants and other complex structures not covered in Group 1
and 2.

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Chapter 6- Total Project Cost

Project Construction Cost Minimum Basic Fees

P10 Million and less 8%
P 800,000 plus 7.5% of excess
Over P10 million to P20 million of P10 million
P1,550,000 plus 6.5% of excess
Over P20 million to P30 million of P20 million
P2.200,000 plus 5.5% of excess
Over P30 million of P30 million

If the Civil Engineer is not the prime professional but renders basic civil engineering services only,
his fee shall be a minimum of 25% of the prime professional fee.

Part B – Minimum Compensation for Civil Engineer as Professional not Prime.

a. Group 4 – Hotels, large apartment building, office building, shopping centers, store
buildings, resorts, hospitals, and comparable projects.

Project Construction Cost Engineer's Fee

P10 million and less 1.05%
P105,000 plus 0.975% in excess
Over P10 million up to P20 million of P10 million
P202,500 plus 0.825% in excess
Over P20 million of P10 million
P285,000 plus 0.675% in excess
Over P30 million of P30 million
b. Structures not failing in any group shall be classified into Group 3.
Minimum Compensation for Civil Engineer’s for rendering the following services.

Professional Fees
25% of Professional Fee + 25%
1. Value Engineering of saving
2. Expert Witness P2,000 / appearance

Minimum Compensation for Civil Engineering rendering Academic Services.

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Chapter 6- Total Project Cost

Teaching part time or full time basis

a. BS Degree Holder P75/hr – P150/hr
b. Master Degree Holder P150/hr – P250/hr
c. Doctorate Degree Holder P250/hr – P400/hr
d. Lecturer (PICE-CPD) P500/hr
e. Conducting Tutorial / Refresher
Courses P500/hr
f. Resource-Speaker P500/hr
g. Writer / Author P3,000/article
Source: PICE, Manual of Professional Practice for Civil Engineers 2nd Edition October
2003

 According to Economic Research Institute the average hourly salary of Civil Engineer is PHP
279/hr.

https://www.academia.edu/7380400/CHARGING_FOR_CIVIL_ENGINEERING_SERVICES#:~:text=Wi
th%20this%20method%2C%20charges%20for%20civil%20engineering%20services,labor%20cost
%2C%20i.e.%2C%20direct%20salaries%20without%20employees%20benefits.

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