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26 CONSULTING ENGINEERING These expenses, which seldom can be determined in advance with any degree of accuracy, are reimbursed by the Client at actual invoice cost, plus a service charge of 10% to 15%. The Consulting Engineer's overhead, which comprises a major portion of the compensation generated by the multiplier on salary cost, includes the following "indirect" costs, which are not directly allocable to specific engagements:* a. Provisions for office, light, heat, and similar items for working space, depreciation allowances or rental for furniiure, drafting equipment and engineering instrume,nts, automobile expenses, and office and drafting supplies not identifiable to specific projects. b. Taxes and insurance other than those included as salary cost, but excluding state and federal income taxes. c. Library and periodical expense, and other means of keeping abreast of advances in engineering, such as attendance at technical and professional meetings. d. Executive, administrative, accounting, legal, stenographic, and clerical salaries and expenses, other than identifiable salaries included in salary costs and expenses included in reimbursable non-salary expenses, plus salaries or imputed salaries of partners and principals, to the extent that tbey perform general executive and administrative services as disting- uished from technical or advisory services directly applicable to particular projects. These services and expenses, essential to the conduct of the business, include preliminary arrangements for new projects or assign- ments, and interest on borrowed capital. e. Business development expenses, including salaries of principals and salary costs of employees so engaged. f. Provision for loss of productive time of technical employees between assignments, and for time of principals and employees on public interest assignments. The client's budgeting requirements often lead him to propose an upset limit (a dollar maximum) to be written into the agreement. This requirement is illogical. It is illogical because the method is usually chosen initially because of the uncertainty of scope of services. A more reasonable approach, which serves the same purpose, is to require the Engineer to advise the client when his costs are approaching 75% of an agreed budget figure and forecast the probable total cost. This provision gives the client an opportunity to examine the progress at the 75% point and, if need be, to approve a figure larger than the original budget amount. The Consulting Engineer who performs services under a salary cost-times-a- multiplier contract must make provision for the accounting work necessary to segregate and record the expenditures thereon. He must maintain adequately detailed time records for all principals, partners, and technical employees who devote time to the work, and any part of whose salaries is included in direct cost. *For a general treatment of overhead refer to ASCE Manual No. 33 "Cost Control and Account- ing for Civil Engineers" (1971).