Total Project Cost:

Legal, Land, Administration,

Staffing, Financial Costs and
Contingency Allowance

GROUP 9:

ISMAEL V. MANDEOYA
VERGIE C. GALVE
COMPONENTS OF TOTAL PROJECT COST

1. Professional engineering costs

2. Construction costs
3. Legal and land costs
4. Owners costs, such as project administration,
staffing, financing, and overhead
5. Contingency allowance for unknown
 TOTAL PROJECT COST

 Includes all expenses related to the

project, such as materials, labor and
design services.
 LEGAL AND LAND COSTS

Construction projects are something that needs to be

covered legally, as they are a legal transaction. The parties
that are involved, the procurement, the contracts, and
insurance, as well as legislation and regulations. The
parties are the people like the employer, who has
requested the construction work, as well as the contractor
who will undertake the build. There can also be other
parties involved like architects, project managers, or
engineers, depending on the kind of project that you have,
as well as what comes with the contractors.
 LEGAL AND LAND COSTS

 Related to acquiring permits

 Legal fees
 Real estate and land acquisition fees
 Building permit review fees
 Printing ( construction documents and spec
books)
 Builder’s risk insurance
 LEGAL AND LAND COSTS

 Buying property is generally considered one of the

biggest steps typically due to the large amount
involved. Along with the property’s price and other
expenses that comes as part of the purchase. In
this respect, the most important is the cost to
transfer the land title.
 ADMINISTRATION

An engineer administrator is a professional who

combines their engineering and administrative skills to
oversee operations in an establishment. They handle
tasks such as coordinating with fellow engineers,
identifying and meeting project requirements, and
creating strategies to optimize daily project
operations.
 STAFFING

 Defined as the management function that

determines human resources needs, recruits,
selects, trains, and develop human resources
for job created by the organization.
STAFFING PROCEDURE

1. Human resource planning

2. Recruitment
3. Selection
4. Induction and orientation
5. Training and development
6. Performance appraisal
7. Employment decisions (rewards and
promotion)
 STAFFING PROCEDURE

1. Human resource planning – assessment of future

human resource needs
2. Recruitment – attracting qualified persons o apply
for vacant positions
3. Selection – act of choosing individuals for the job
4. Induction and orientation – new employee is
provided with the necessary information about the
company
 STAFFING PROCEDURE

4. Training and development – assess the skills

required for the job
5. Performance appraisal – measurement of
employee’s performance
6. Employment decisions (rewards and promotion)
– given to employees whose performance if above
standard requirement
 CONTINGENCY ALLOWANCE

 A contingency allowance is an amount of money

that is set aside in a project budget or plan to cover
unexpected events or costs that may occur during
the project. This allowance is intended to help
account for the uncertainty and risks that are
associated with any project or undertaking.
 PURPOSE OF CONTINGENCY ALLOWANCE

 Mitigate the risk of unexpected costs and to

provide a safety net in case of unforeseen
events such as bad weather, unexpected site
conditions, or cost overruns on materials and
labor.

 Help ensure that your project is completed

successfully, without incurring any major delays
 HOW IS CONTINGENCY ALLOWANCE CALCULATED?

Contingency allowance can be calculated in different ways, but a

common method is to allocate a percentage of the total budget
or estimated costs. The percentage chosen may depend on the
level of uncertainty and risk associated with the project, and can
vary from project to project. For example, a contingency
allowance of 5-10% may be sufficient for a low risk project,
while a higher risk project may require a contingency allowance
of 20% or more.

P 100,000 x 0.10% = P 10,000

P 100,000 + P 10,000 = P 110,000 (total budget for the project)
 There are two types of contingencies:

1. Owner reserve – an amount set aside for

additions to the project’s scope
2. Contractor contingency – an amount built into
the contractor’s anticipated price for the project
to account for various risk factors that cannot
otherwise be accounted for in a schedule of
values.
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