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<br />SECTION VII. - TOTAL COST OF A PROJECT <br /> <br />On new projects, before construction begins and before the Engineer has been <br />directed to proceed with detailed contract drawings and specifications, the Client <br />is concerned with the probable total cost. He will request that the Engineer make <br />an engineering report on the project, including a preliminary estimate of the <br />project cost, fully realizing that because the Engineer has no control over the cost <br />of labor and materials, or competitive bidding, he cannot guarantee the estimate. <br />Information in the hands of the Engineer after the completion of his report is <br />not sufficient to enable him to make an estimate of construction cost which is <br />equal in accuracy to the bid a contractor makes after his study of the detailed <br />contract drawings and specifications. To the Engineer's preliminary estimate, <br />therefore, must be added an allowance for contingencies. These contingencies <br />may include undisclosed conditions of foundations and construction, extra quan- <br />tities of materials, larger and heavier equipment, and other items increasing the <br />cost of construction. The item of contingencies varies with the degree of com- <br />pleteness of the Engineer's report. Usually, it should be included in preliminary <br />estimates at from 10% to 25% of the Engineer's construction cost estimate. <br />To the estimated cost of construction plus contingencies should be added <br />provision for engineering, legal, and administrative costs. When handled by <br />firms in private practice, engineering charges for the services outlined under <br />.. Services for Design Type Projects" in Section II are substantially affected by <br />the size and type of project and particularly by the Special Services required for <br />the project or furnished at the Client's request. The effect of size and type of <br />project is shown graphically by Curves A and B on pages 30 and 31. Additional <br />charges for Special Services can easily vary from 2% to 3% of the Engineer's <br />construction cost estimate for field survey work only, to 10% to 12% for prepara- <br />tion of supporting documents for governmental grants or advances for public <br />works, field survey work for design and construction, land surveys with related <br />office work and plat preparation, and full-time services of a Resident Project <br />Representative. Legal and administrative expenses, if the project is clear-cut <br />without the likelihood of infringement of private property or the probability of <br />legal entanglements, will usually fall between 2% and 3%. <br />After contingencies and engineering, legal, and administrative expenses have <br />been added to the estimated cost of construction, it may he necessary for the <br />Client and the Engineer to consider the cost of financial advice, printing of <br />bonds, discount of bonds, etc. These items might be as low as 1 %, or they might <br />add up to as much as 5% of all costs that have gone before. <br /> <br />38 <br />