Overhead and Contingencies 456–3 JOB OVERHEAD
(GENERAL CONDITIONS,
DIRECT OVERHEAD)
Also referred to as general conditions, direct overhead,or indirect
field costs,job overhead comprises all costs that can be readily
charged to a specific project but not to a specific item of work
on that project. The list of job overhead items is placed on the
first of the general estimate sheets under the heading of job
overhead, general conditions, direct overhead, or indirect field
costs. Most of these items are a function of the project dura-
tion; therefore, having a good estimate of the project duration
is critical in developing a good job overhead estimate.
Itemizing each cost gives the estimator a basis for deter-
mining the amount of that expense and also provides for
comparisons between projects. A percentage should not be
added to the cost simply to cover overhead. It is important
that each portion of the estimate be analyzed for accuracy to
determine whether the estimator, in the future, should bid
an item higher or lower.
Salaries. Salaries include those paid to the project super-
intendent, assistant superintendent, timekeeper, material
clerk, all foremen required, and security personnel if needed.
Some companies and some cost-plus contracts also include
the project manager and assistant project mangers in the pro-
ject overhead. These costs must also include vehicle, mobile
phone, travel, and job-related living expenses for these people.
The salaries of the various workers required are estimated
per week or per month, and that amount is multiplied by the
estimated time it is expected that each will be required on the
project. The estimator must be neither overly optimistic nor
pessimistic with regard to the time each person will be
required to spend on the job. Figure 6.2 is a good example of
how a bar chart schedule can be used to estimate the labor
costs and then used during construction to control these costs.
Temporary Office. The cost of providing a temporary
job office for use by the contractor and architect during the
construction of the project should also include office
expenses such as electricity, gas, heat, water, telephone, and
office equipment. Check the specification for special
requirements pertaining to the office. A particular size may
be required; the architect may require a temporary office, or
other requirements may be included.
If the contractor owns the temporary office, a charge is
still made against the project for depreciation and return on
investment. If the temporary office is rented, the rental cost
is charged to the project. Because the rental charges are gen-
erally based on a monthly fee, carefully estimate the number
of months required. At $250 per month, three extra months
amount to $750 from the profit of the project. Check
whether the monthly fee includes setup and return of the
office. If not, these costs must also be included.Temporary Buildings, Barricades, Enclosures. The
cost of temporary buildings includes all tool sheds, work-
shops, and material storage spaces. The cost of building and
maintaining barricades and providing signal lights in con-
junction with the barricades must also be included.
Necessary enclosures include fences, temporary doors and
windows, ramps, platforms, and protection over equipment.Temporary Utilities. The costs of temporary water,
light, power, and heat must also be included. For each of
these items, the specifications must be read carefully to
determine which contractor must arrange for the installa-
tion of the temporary utilities and who will pay for the
actual amounts of each item used (power, fuel, water).
Water may have to be supplied to all subcontractors by the
general contractor. This information is included in the project
manual and must be checked for each project. The contractor
may be able to tie into existing water mains. In this case, a
plumber will have to be hired to make the connection. Other
times, with permission of the municipality, the contractor may
obtain water from a fire hydrant. Sometimes, the people who
own the adjoining property will allow use of their water supply,
usually for a fee. Water may be drawn from a nearby creek with
a pump, or perhaps a water truck will have to be used. No mat-
ter where the water comes from, temporary water will be
required on many projects, and the contractor must include its
cost. The water source is one of the items the estimator should
investigate at the site. Many water departments charge for the
water used; the estimator will have to estimate the volume of
water that will be required and price it accordingly.
Electrical requirements may include lighting and power
for the project. These items are often covered in the electrical
specifications, and the estimator must review it to be certain
that all requirements of the project will be met. In small pro-
jects, it may be sufficient to tap existing power lines run them
to a meter and string out extension lines through the project,
from which lights will be added and power will be taken off.
On large complexes, it may be necessary to install poles, trans-
formers, and extensive wiring so that all power equipment
being used to construct the project will be supplied. If the esti-
mator finds that the temporary electricity required will notFIGURE 6.2.Field Staff Plan and Estimate.