Charging for Civil

Engineering Services
 4.1 General
Charging for Engineering Services are
usually computed by 6 Methods

1. Salary Cost Times Multiplier Plus Direct plus Direct Non-Salary

Expense (Reimbursable )
2. Hourly Billing Rates plus Reimbursable
3. Per diem
4. Cost Plus Fixed Fee (CPFF)
5. Fixed price
6. Percentage of Construction Cost (“Percentage”)
4.2 Salary Cost Times Multiplier Plus
Direct Plus Direct Non-Salary Expense

 Compensation on the basis of the salary cost times an

agreed multiplier is a frequently used method of
determining charges for engineering services.
 May be utilized as either a multiplier times salary cost or a
multiplier times direct salary cost
 The direct salary times multiplier is very similar to the
salary cost times multiplier with the exception that it
applies a single multiplier to unburdened direct labor cost,
i.e., direct salaries without employee benefits
 The following Factor are
Pertinent to the Salary Cost
Times Multiplier Version of
this Method:
 1. Salary cost
 2. Multiplier
 The average multiplier should be between 2.5 and 3 times the average
salary cost.
 3. Direct Non-Salary Expenses usually incurred in
engineering engagements may include the ff:
 A. Living and traveling expenses of principals and
employees when away from the home office on business
connected with the project.
 B. Identifiable, communications, expenses, such as long-
distance telephone, facsimile, telegraph, shipping
charges, and special postage charges
 C. Expenses for services and equipment directly
applicable to the project such as for specialized
technical equipment, special legal and accounting
services, special computer rental and programming
services, computer run time and file storage, CADD
charges, sub consultants and subcontractors
commercial printing and binding and similar services
that are not applicable for inclusion in general
overhead.
 D. Identifiable drafting supplies, stenographic supplies and
reproduction work (blueprinting, photocopying and
printing ) as distinguished from such supplies and expenses
applicable to several projects
 E. Expenses for unusual insurance and specialized health
and safety programs and for special clothing for projects
with extraordinary risks such as toxic and hazardous waste
conditions.
 4. Civil Engineers overhead –which comprises a major portion of
compensation generated by the multiplier on salary cost includes
the ff. indirect costs:
 A. Provisions for office expenses
 B. Taxes and insurance other than those included as salary cost
 C. Library and periodical expenses and other costs of keeping
abreast of advances in engineering, such as attendance at technical
and professional meetings and continuing education courses.
 D. Executive, administrative, accounting legal, stenographic, and
clerical salaries and expenses (other than identifiable salaries
included in salary costs and expenses) plus salaries or imputed
salaries of partners and principals to the extent that they perform
general executive and administrative services as distinguished
from technical or advisory services directly applicable to
particular projects
 E. Business development expenses, including salaries of
principals and employees so engaged
 F. Provision for loss of productive time of technical
employees between assignments, and for time of principals
and employee on public service assignments
 G. Costs of acquiring and maintaining computers,
development of software and training staff when not billed
as a direct cost
4.3 Hourly Billing Rates plus
Reimbursable

 Is very similar to the salary cost times multiplier method in

that the hourly billing rate includes all direct personnel
expense, overhead and profit
 Are used on projects where the scope of service is not well
defined or to simplify-accounting and record keeping.
4.4 Per Diem

 Per Diem normally refers to an eight-hour day

 Is particularly suited to expert witness or other type legal-
type services and to other short-term engagements
involving intermittent personal services
 Per diem rates can vary widely, depending on employee
classification, regional location and period of service.
 Rates for consultation in connection with litigation and
appearances before commissions and courts are normally
higher than the standard rates
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