IN CONSTRUCTION

CLAIMS
Indirect
Costs CONSTRUCTION CONTRACTS MANGEMENT
BY

arithi
lamp
I
 Indirect costs, also known as overhead
costs, are expenses that cannot be traced
directly to a specific project or cost center
but are necessary to support overall
business operations. These costs are
typically incurred by the contractor
regardless of the specific projects they
undertake. Indirect costs are essential for
INTRO determining the contractor's overall
financial burden and the allocation of those
costs across various projects. Here are

arithi
p
some common examples of indirect costs in

lam
I
construction claims
 The cost of maintaining the contractor's
1. administrative offices, including rent,
OFFICE utilities, office staff salaries, and office
OVERHEAD supplies. Office overhead also includes
expenses related to communication,
software, and general office operations.

arithi
lamp
I
SLIDE #1
 Expenses related to corporate
management, such as executive
2. salaries, legal and accounting fees,
ADMINISTRATIVE and insurance. These costs encompass
COSTS the administrative aspects of running
the construction company.

arithi
lamp
I
SLIDE #2
 The gradual reduction in the value of
3. owned construction equipment over
time. Equipment depreciation is a non-
EQUIPMENT
cash expense but is vital for accurately
DEPRECIATION
assessing a company's financial health.

arithi
lamp
I
SLIDE #3
 Premiums paid for general liability
insurance, workers' compensation
4. insurance, and other types of coverage.
INSURANCE Insurance costs can vary based on the
construction company's risk profile and
project types.

arithi
lamp
I
SLIDE #4
 Corporate taxes and property taxes
that are not directly tied to a specific
5. project. Tax expenses can significantly
TAXES impact a company's overall financial
performance

arithi
lamp
I
SLIDE #5
 Interest expenses incurred on loans or
6.
lines of credit used to finance the
INTEREST ON contractor's operations. Managing
LOANS interest costs is crucial for maintaining
financial stability.

arithi
lamp
I
SLIDE #6
 Costs associated with marketing
7. efforts and business development
MARKETING & activities to secure new projects. These
BUSINESS costs may include advertising, travel
DEVELOPMENT expenses, and client entertainment.

arithi
lamp
I
SLIDE #7
8. Expenses related to employee training
and development programs, including
TRAINING AND
safety training, skills improvement,
DEVELOPMENT
and professional certifications.

arithi
lamp
I
SLIDE #8
9. Payments for renting or leasing
RENT AND facilities, equipment, or vehicles. Rent
LEASING and leasing costs can fluctuate
depending on location and market
COSTS
conditions.

arithi
lamp
I
SLIDE #9
 Expenses for utilities used at corporate
10. offices, such as electricity, water, and
UTILITIES internet services.

arithi
lamp
I
SLIDE #10
THANKS FOR
READING
CONSTRUCTION CONTRACTS MANGEMENT
BY
FOLLOW ME FOR MORE

arithi
lamp
I
Ilamparithi BoologaSundaraVijayan