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inside man
45 Posts |
 Posted - 02/12/2003 : 10:09:05
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Many times I see on the last page of a contractor's estimate a charge for "general conditions"
How do you address this with the contractor?
What does this charge represent?
Do you ask the contractor for a breakdown of this charge which is usually listed as a lump sum item?
Are general conditions included in the contractor's overhead & profit? |
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rugg
Canada
14 Posts |
Posted - 02/12/2003 : 10:47:55
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inside man, I have seen quite often the area of General - which would include things like final cleanups, and smaller misc items, although most contractors will include this in there breakdowns. If you are unsure of the reason for the item, a quick call to the contractor will usually clear things up. If it appears to you that all items have been covered in your scope, then of course you ask the contractor what these charge represent. I would say that the overhead and profit are simply that (Overhead and Profit)
Remember that it is part of your job to make sure that all items are accounted for and that a fair price is paid for repairs. Don't assume if your not sure ask.
Hope this is of some help
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CCarr
Canada
1200 Posts |
Posted - 02/12/2003 : 11:23:50
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Hey 'Inside', I see a fellow Canuck got in ahead of me.
Anyway, to your last question in your post, I suggest; 'General Conditions' ARE the contractor's OH&P.
Generally, because it does vary of the type of project and its size, 'General Conditions' are a general contractor's OH&P and his mark up on subcontractors, plus field office expense and mobilization items, if applicable.
'Mark Up' - is normally based on the Boeckh (or equivalent) Index and location; and can include contingencies such as - escalation costs, construction contingencies and technical services; again, if any required.
The 'Boeckh Index' is a 'historical' relative construction cost index relating different cities at different times. The Index looks at labor, material, and equipment costs in a wide range of cities. It is normally used to establish (normally for an architect or engineer) the starting point for all future allowable escalation costs.
'Construction contingency costs' - if incorporated in mark up, are normally a maximum of 7.5% for other than new construction, and a maximum of 5.0% for new construction.
'Technical services costs' - if incorporated in mark up, is normally 10.0% maximum for new construction, to cover contract prep, surveys, etc; on other than new construction, it is hard to envision this at more than 2.0%.
Now, all of the above percentages and most items, generally relates to pretty serious construction projects; and I have not seen the depth of this application much outside of commercial construction.
Therefore, generally consider 'contractor's general conditions' as their OH&P (unless they break 'profit' out separately), as it relates to costs associated with materials and handling (labor), scaffolding and the likes, supervision, clean up, mark up on any subs, and the general contractor's profit (if not broken out separately).
By the way, I found an interesting site to consider for construction material costs as follows; www.construction-cost.com
They claim that, "this site has a link to every site on the web that lists construction material costs". It may be worth a bookmark. |
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Newt
USA
657 Posts |
Posted - 02/12/2003 : 16:01:07
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Construction Contingency cost sounds reasonable. Conditions, is really the costs above the normal.
The same statement I used when writing up Industrial or commercial contracts. I usually decribed these charges. These charges are brought about by problems we may have charged for and only if there was one. Like a rock clause, getting in and out of the site and material availability. (In case we had a two or three hundred mile trip to make because of non availability). In a bad storm area this is some of the mud you go through to get the job done.
I would ask the contractor for an explaination of conditions, then judge for yourself, he may or may not be padding the estimate.
If there is a change clause, beware this is a shell game some use. Study it carefully. |
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inside man
45 Posts |
Posted - 02/12/2003 : 20:28:14
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I have been told these charges are for supervision of the project.
The estimate is over $185,000 with multiple trades.
The IA advises this is the norm when dealing with contractor's in his area (NYC). We are still working on this one boys and girls.
I won't get to see this one all the way thru though as your "inside man" will be packing his bags to go home on Friday.
I sort of like the monicker though...maybe I'll keep it! |
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General Conditons on Contractor's Estimate
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