I continue this blog series to break a decades-long silence in the construction industry -the nine true secrets of successful estimates.
SEVENTH SECRET
The seventh secret is the indirect costs of a project. Indirect costs are the identification of labor, material and equipment items required to support the overall project. Indirect costs associated with a project range from the overall project costs for the owner (i.e. design fees, permits, land acquisition costs, legal, administration, etc.) to the contractor and subcontractor costs (i.e. mobilization, staffing, temporary construction and utilities, equipment, small tools and consumables, etc.).
Will the indirect costs in the estimate be perfect? “No” again. However, they will be more reliable by taking these factors into consideration. No one company has a lock on this secret; all of the successful firms know one of the secrets to a successful project is having a reliable determination made of the indirect costs required to perform the work.
Don’t miss out on the remaining secrets! Check back soon!
One Comment
Don:
I enjoy what you are doing on your website. Re. “indirect costs” I take exception to the classification of general condition-type costs as indirects. They are direct costs to the project.
I agree that notionally there are indirect costs associated with a project but in the context of assembling an estimate the term “indirects” should be avoided.
Keep up the good work.
Jim