COST PLUS FIXED FEE

CHARGES OF CIVIL  Under this agreement, the Civil

ENGINEERING Engineer is reimbursed for the actual
costs of all services and supplies
SERVICES related to the project including: salary
cost, Overhead, Direct non salary
CHARGES FOR CIVIL ENGINEERING expense, Fixed
SERVICES ARE USUALLY COMPUTED  The cost plus fixed fee basis requires
USING ONE OF THE SIX METHODS; that the client and the Civil engineer
 Salary cost times multiplier plus direct define and agree upon the scope of
salary expense (Reimbursable) services the Civil Engineer to
 Hourly Billing rates plus reimbursable perform.
 Per Diem  Such definition of the scope of
 Cost plus fixed fee. (CPFF) service is essential to enable the Civil
 Fixed price engineer to estimate costs and
 Percentage of construction cost propose an equitable fixed fee
amount. This must be incorporated
SALARY COST TIMES MULTIPLIER into the client- engineer agreement.
PLUS DIRECT SALARY EXPENSE
(REIMBURSABLE) FIXED PRICE
 Are frequently used method of  The fixed price method of
determining charges for engineering compensation is frequently used for
services. With this method, charges investigations and studies and for
for engineering services are based basic services on design type
mainly on direct salaries. projects where the scope and
 Salary cost defined as direct complexity of the assignment are
salary plus employee benefits, clearly and fully defined. The fixed
 Multiplier is a factor that price amount can be calculated as
compensates the civil engineer the sum total of estimated
for overhead plus a reasonable engineering costs for the salaries,
margin for contingencies, interest overhead and nonsalary expenses,
or invested capital readiness to an allowance for contingencies
serve and profit. interest on invested ( capital,
 Direct non-salary expenses readiness to serve, and a reasonable
amount for profit.
HOURLY BILLING RATE  A fixed price agreement should
 The hourly billing rate method of contain a clearly stated time period
compensation is very similar to the during which the services will be
salary cost times multiplier in that performed and a provision for
hourly billing rate includes all direct adjustment of compensation if the
personnel expense, overhead and project is delayed for reasons beyond
profit. the Civil Engineers control.

PER DIEM PERCENTAGE OF CONSTRUCTION

 the term per diem normally refers to  The percentage of construction cost
an eight hour day. method is seldom used raw. Because
 The per diem charge should be of increasing complexity and large
based on the complexity, risk and variation in tasks for projects, the
important of the services and on the percentage of construction cost fee
Civil Engineers professional standing, curves no longer have a direct
expertise and breadth of experience. correlation to the required
The Civil Engineer is also reimbursed engineering fees for specific projects.
for travel and subsistence cost and  This Method may be used to
for other out of pocket expenses determined the compensation of the
incurred when away from the home engineer for services where the
office. principal responsibility is the detailed
 design or construction supervision of positions provided by the Civil
facilities to be constructed. Service Commission.

 Construction Cost is defined as the  A Civil Engineer employed in the

estimated total cost of constructing private sector who signs and seals
the facility to be covered by the the Civil Engineering plans,
proposed detailed design or specifications and other related
construction supervision services, documents of a certain project for
excluding the fees and other costs of and in behalf of his employers shall
such services, the cost of land and be compensated with a minimum
right of way, and legal and 10% of the professional fee for the
administrative expenses. project, over and above the basic
 The percentage fee shall consider the monthly salary-
type, complexity, location, and
magnitude of construction cost of the
project and shall not exceed the
following percentage of estimated
construction cost:
 Feasibility studies - 3%
 Detailed engineering design - 6%
 Detailed architectural and
engineering design - 8%
 Construction supervision - 10%

 These percentages include only

those works normally undertaken in
arriving at the expected outputs and
do not include special studies or
investigations.
 It is further emphasized that the
above percentages are only ceilings
and it does not necessarily mean that
the said percentages shall always be
adopted for each project. The actual
percentage for a particular project will
depend on the factors - the type,
complexity, location, and magnitude
of construction cost.

SCHEDULE OF MINIMUM BASIC FEES

 When doing work on foreign assisted
projects or in projects where
international consultants participate,
the Civil Engineer performing similar
or equivalent work, should accept
compensation that approximates the
international standard rates.
 Civil Engineers regularly employed in
the private sector shall have
minimum compensation
corresponding to 10% more than the
minimum wage prevailing in the
region as basic monthly salary. Civil
Engineers employed in the
government sector shall have
minimum basic monthly salary
corresponding to appropriate entry