CONSULTATION, RESEARCH,

INVESTIGATIONS, AND REPORTS

Charging of Civil Engineering Services

Reported By: Pabona, Jhamel

Pagaduan, John Benedict
Paglingayen, Kristine
Engineering consultants may provide inclusive engineering services but
there are consultants which are specialized in specific engineering areas
for instance structural, geotechnical, and environmental.
Generally, the necessity for engineering services is based on the nature
of the project and capability of the owner.
Engineering services provided by consultant add value to the project and
improve its quality. Added to that, it is considerably significant that the
owner clearly understands type of services that may be provided to be
able to develop scope of services that serve the project properly.
So, scope of engineering services should be communicated between the
owner and consultant to have a successful project. That is why various
engineering services that may be provided by consultants is discussed in
detail in the following sections.
SERVICES PROVIDED BY ENGINEERING CONSULTANTS IN
CONSTRUCTION

Engineering services provided by consultants may be

categorized into three classes:
• Consultation, investigations and studies
• Design and construction
• Special services
METHODS FOR CALCULATING COST OF
ENGINEERING CONSULTANT SERVICES
There are several methods by which calculation of engineering consultant
services cost can be carried out in construction. It is possible to employ various
charging approach at different phase of the consultant services.
The application of each method or combination of methods is dependent on
nature, scope and complexity of the required engineering services. In this article,
these charging consulting services are discussed.
Following are the topics discussed for calculating cost of engineering services or
consulting services in construction:
• What are the factors that affect the engineering service cost?
• Methods for charging engineering services
WHAT ARE THE FACTORS THAT AFFECT THE ENGINEERING
SERVICE COST IN CONSTRUCTION?

There are various factors that control the cost of engineering

services required for a specific project. These factors are outlined
below:
• The conditions at project site.
• Degree of danger that may be encountered and exposure
possibility.
• System of project delivery namely: design-bid-build, design-
build, design-build-operate-maintain.
• Type of developer or contractor or client owner.
WHAT ARE THE FACTORS THAT AFFECT THE ENGINEERING
SERVICE COST IN CONSTRUCTION?

• The owner skill and experience in similar projects and the

process of decision making.
• Submittal and review numbers required by the owner and
regulatory commissions.
• The number of meetings held for communities based on the
owner requirements.
• Types of schedule namely: conventional, delayed or
accelerated.
• Project complexity and number of involved specialties and
subcontractors.
• Finally, other contract restrictions.
METHODS FOR CHARGING ENGINEERING CONSULTANT
SERVICES

There are five different methods which are used for charging
engineering consultant services:
• Salary cost times multiplier, plus direct non-salary expense
(multiplier)
• Hourly billing rate plus reimbursable expenses and a “not to
exceed” amount for specified services (hourly)
• Per diem (fixed charge per day)
• Cost plus fixed fee
• Lump sum or fixed price
SALARY COST TIMES MULTIPLIER PLUS DIRECT NON-
SALARY EXPENSE (MULTIPLIER)

It is dependent on the cost of consultants who carry out the service and it
is specifically suitable tasks in which the extent or range of the
engineering services is not clearly outlined.
Disregard of the charging method utilized, it is more convenient to outline
the project scope adequately because it will lead to achieve satisfactory
result and the end of the service and reduced possible disputes between
the owner and engineering consultants.
There are specific project conditions for which multiplier method for
charging consultant services is suitable. For example, if the scope of
project is not outlined properly, the extend of the project is defined
adequately, or substantially complex project.
HOURLY BILLING RATE PLUS REIMBURSABLE EXPENSES
AND A “NOT TO EXCEED” AMOUNT FOR SPECIFIED
SERVICES (HOURLY)

Similar to the multiplier approach, hourly billing rate plus reimbursable is

based on the consultant cost that performs the service. It can be used for
cases where the extent of the project is not certain.
Moreover, the consultant and the owner should agree on specifying the
expected range of the project and the methods for adjusting not to
exceed amount. In the case the cost closes to not to exceed amount,
then the owner should be informed and provide modified cost estimate for
the completion of project.
This approach may be specified and employed in the case where the
project range is not defined properly, simplified accounting, considerably
short project assignment, the extent of the project is defined adequately
and on-site construction management services
PER DIEM (FIXED CHARGE PER DAY)

The per diem term is referred to an eight hour per day. The cost of
consultants who conduct the engineering service is the base for the
per diem approach as it is the case in the previous two methods.

It is convenient to choose for charging engineering consultation

services if the project scope is not outlined properly and in the case
where it is outlined adequately, very short assignment and on-site
construction management services.
COST PLUS FIXED FEE

Similar to the per diem, hourly and multiplier method, cost plus
fixed fee is dependent on the cost of consultants.

It can be used whether the extent of the project is outlined properly

or not, very complex project and suitable for on-site construction
management services.
LUMP SUM OR FIXED PRICE

Unlike other four methods discussed above, lump sum or fixed price
approach is based on completion of the project and the extent or range of
the project need to be defined adequately. So, the scope of the project
should be accepted and agreed upon by both consultants and project
owner.

This method is recommended to be employed if the scope of the project

is defined adequately, simplified accounting, crucially complex jobs and
very short tasks. However, it should be ruled out if the extent and the
range of the project is not described and outlined sufficiently.
FINALLY, IT IS DISCUSSED THAT THE SELECTION OF AFOREMENTIONED ME THODS FOR
CHARGING ENGINEERING CONSULTANT SERVICES IS BASED ON THE CERTAIN PROJECT
CONDITIONS. THOSE CONDITIONS AND SUITABILITY OF EACH METHOD ARE
SUMMARIZED IN THE FOLLOWING TABLE.

A - The method of charging engineering services is applicable for that specific

condition
NA - The method of charging engineering services is not applicable for that
specific condition