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📝🔺ESTIMATE BID PRICE-TENDER COST OF CONSTRUCTION PROJECT🔻

✅Estimate Indirect Cost of Construction Project:
The indirect costs are also called as overheads. A construction project has many activities to be complete. Some costs are incurred in a construction project which are not associated with only one activity and they can be distributed to many activities. Thus these costs are not considered as direct costs and considered separately as indirect costs.
For example, for a material cost, the indirect cost can be purchase cost, inventory carrying cost etc.
The indirect cost includes project overheads, common workmen, common plants and equipment costs.

▶️Project Overheads Cost:
🔘Project overhead cost consists of following in a construction project:

✔️i) Salaries and benefits – This includes the salaries and benefits to staffs including engineers, supervisors and other administrative posted at construction site. The gross salaries of these are considered for this cost. Thus, salaries and benefits to staffs shall be considered in bid price estimation calculation.

✔️ii) Insurance cost – A construction project possesses many types of safety and health hazards. Thus insurance for life and health and provided to all staff and workmen involved in the construction project.

✔️iii) Financing cost – A large construction project required a large amount of money to mobilize and carryout the construction activities. For this, the loans are arranged from various banks which attracts interest. Also costs are incurred during bidding process such as bid bond, performance bond, advance bond and payment guaranty, retention guaranty, letter of credit, establishment charges, work insurance, fines and penalties etc. So, these costs are appropriately considered while estimating bid price or tender cost of a construction project.

✔️iv) Conveyance cost, Travel and transfer Cost – Many times equipments, staffs and workmen need to move from one place to another for various purposes which incurs a cost known as conveyance cost. This is also considered while estimation of bid price of a construction project.

✔️v) Temporary Site Installation Cost – Temporary site installation such as site office, workshops, stores, fencing, warehouses and storage areas, sanitary, first aid, furniture and fittings, computers and other electronics, temporary roads, car parking and even residential units and messing facilities are provided at construction site. The cost associated with these temporary site installations are also considered in bidding price calculation of construction project.

✔️vi) Clients and Consultants Requirements – Many times a contractor has to provide facilities to client and consultants such as office staffs, office space, furniture, telephone etc. The cost associated with these facilities also have to be taken into tender cost calculation of construction project.

✔️vii) Utilities Cost – The cost associated with utilities such as water, power etc. for office and residential areas are to be borne by the contractor and shall be considered for bidding price estimation calculation.

✔️viii) Taxes and Duties – Taxes such as contract tax, excise duties, custom duties, income tax, sales tax, service tax, value added tax etc. are different type of taxes which may be application for a construction project. Thus cost of these taxes are considered appropriately for bidding price calculation wherever applicable.

✔️ix) Miscellaneous Expenses – There can be other expense other than mentioned above such as administrative expenses, field expenses, stationary, documentation, communication, tools and consumables, safety and protective equipments etc. The cost associated with these miscellaneous expenses are considered for tender price estimation calculation.

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▶️Common Plant & Equipment and Common Workmen Cost:
🔘Some plants and equipments and construction workers are associated with many construction activities. They are grouped and their cost is calculated separately and included in the tender cost – bid price estimation calculation of a construction project.

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