Republic of the Philippines

University of Rizal System

Morong, Rizal

COLLEGE OF ENGINEERING

LEGAL, LAND, ADMINISTRATION,

STAFFING AND FINANCIAL COSTS

Prepared and Submitted by:

ARRIOLA, JULIANNE
CELONES, LOUIS ANDREI B.
LIRIO, DIONNE S.
4CE-B

Submitted to:

JOHN CARLO L. RAMOS, RCE

Instructor

05 September 2023
Table of Contents

 LEGAL, LAND, ADMINISTRATIVE, STAFFING AND FINANCIAL COSTS

 CONTINGENCY ALLOWANCE

 SUMMARY

Slide 1: Title and Presenters

Slide 2: Table of Contents

Slide 3: Legal, Land, Administration, Staffing and Financial Costs

Explanation:

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

In a legal cost, this refers to the expenses associated with legal services, such as hiring
lawyers, filing legal documents, and obtaining legal advice.

By land cost it means the expenses related to the acquisition, ownership, and
maintenance of land. These costs can include the purchase price of land, property
taxes, land surveys, land development, and on-going land management expenses.

Administration costs refer to the overhead expenses incurred by an organization to

manage its day-to-day operations. These costs can include salaries of administrative
staff, office rent, utilities, office supplies, and any other expenses necessary to support
the organization's administrative functions.

While financial costs represent the expenses associated with financing activities, such
as loans, interest payments, and other financial obligations.

They can also include fees related to financial transactions, like bank charges and
brokerage fees.
Slide 4 and 5: Contingency Allowance
Explanation:

As the project moves forward from the study and report phase through the final design
phase and finally to construction award, more becomes known about project details and
costs until at the completion of the project, the final project becomes a known quantity.

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 be estimated probable total
project cost at the completion of the study end report phase, reducing these to perhaps
10% at the completion of the final design and perhaps to 5%, when the construction bid
becomes known. Larger or more complex projects may require higher contingencies.

Contingencies are extra funds set aside to cover unexpected costs or uncertainties.
They act as a safety net in case things don't go exactly as planned.

A project typically goes through several phases, starting with the study and report
phase, progressing through design, and finally to construction. As the project advances
through these phases, more information becomes available about project details and
costs. In the initial stages, there's often a lot of uncertainty.

It's common practice to add a percentage of the estimated probable total project cost as
contingencies. At the study and report phase, this percentage is often higher, typically
around 20% or more, because there are many unknowns. As the project progresses
and more details are known, these percentages are reduced to mitigate risk. For
example, at the final design phase, it might be reduced to around 10%, and further
reduced to 5% when the construction bid is known. Larger or more complex projects
may require higher contingency percentages because they tend to have more variables
and potential risks.

In summary, adding contingencies to project cost estimates is a prudent practice to

account for uncertainties and ensure that the project has a financial buffer to handle
unexpected issues. As the project advances and more information becomes available,
these contingencies are reduced to reflect the decreasing level of uncertainty. This
helps in effective project budgeting and risk management.
Slide 6: Summary

Explanation:

Estimates of probable total project cost should be periodically revised by the engineers
as the design moves forward and more information becomes known. The client is
usually responsible for providing estimates of those costs which may lie outside the civil
engineer's knowledge or expertise, such as those in the legal, land, administrative and
financial areas.

The client, who is often the project owner, is typically responsible for estimating these
costs because they have a deeper understanding of their specific needs, financial
capabilities, and any legal or administrative requirements that may apply to their project.
Collaborating with the client on these estimates ensures that the project budget is
comprehensive and realistic. The statement emphasizes the importance of regularly
updating project cost estimates as a project progresses and highlights that clients
should take responsibility for estimating certain costs that are outside the direct
expertise of civil engineers. This collaborative approach helps ensure that the project
remains within budget and complies with all legal and administrative requirements.