% of construction

[kmart30]

Somewhat of a "rookie" question here....I've been doing mostly small lump sum fee jobs for a while now but have some opportunities to move into larger projects. I know from other engineers the fee based on construction costs can be anywhere from 1% to 4% depending on the project. Starting out in the construction industry I know costs can be all over the board depending on different types of variables from project to project. How do you estimate the cost of construction so you can apply your % for a fee? I know there are standard costs/sqft that building departments use to charge for the building permits but this is typically less than what it actually comes out too. Is this something the architect is suppose to tell you on every project? If so, how are they coming up with their estimates especially with construction prices fluctuating on a daily basis? Thanks!

 

[P205]

Good question. I look forward to hearing what the more experienced people on here have to say.

The places I've worked, it's not usually done on a % of construction cost per say, but a comparison of your estimate to the construction cost can be done retroactively to see if you're totally off base. (i.e. if you estimate your fees to be 50,000, and you divide it by what you figure the construction cost will be and you're way too high above a certain percentage, it gives you an idea of where your fee estimate might be).

In my limited experience of writing fee proposals, I usually make a list of the design items and give an estimated number of hours it might take to design each element. Typically, the drafting hours are in the same neighborhood of hours. Then you multiply your design charge-out rate by the hours, and the drafting charge-out rate by the drafting hours and adding the two numbers gives you the total design phase services portion.

You then add the construction phase services portion on the total which includes shop drawing review, construction coordination (RFIs, COs and SIs), and site visits. Site visits are usually a fixed price per visit (depends on distance to site and such).

After tallying the design phase and construction phase estimates, you have your final number. Of course, each job is different, and different rules apply to different job types. This is just a general overview and is not intended to be all encompassing.

Edit: Spelling

 

[EngineeringEric]

There is always RS Means. I usually apply a cost for construction of structure, the job isn't more complicated because it has more expensive finishes and a crazy complicated mechanical system. Or at least it doesn't have a huge impact on me.

So i will use something like 130$/sq.ft or what RS Means says for construction costs. If you can, find the RS Means that doesn't list out every nail but actually has a gross cost for different types of buildings as a whole. These guides will usually give me a fee far exceeding what the market can bear. I then go back and do it based on # sheets and effort required.

 

[WARose]

I usually take about 3 passes (for engineering costs):

1. The percentage based approach you are talking. (Sometimes that can give numbers really out of whack though...which is why I am focusing on engineering costs in this post.)

2. Number of drawings. And X amount of hours per drawing (and that includes drafting and engineering). The X variable can really vary based on the project type. (X*hourly rate to get fee.)

3. Just a raw guess based on past experience.

The highest of the 3 I will run with as my bid. (Unless I really need the work, then I might take a lower one.)

All that being said it can really vary.....especially on a modification job. I did one recently where I was modifying a roof. No new equipment. And the engineering cost wound up being about 20% of the project. Reason being that I had to do a lot of field work to find out about the existing steel and generate new drawings. The owner had no drawings for the existing. Obviously for a new building, that number will be quite different.

 

[DETstru]

It varies greatly by area but you really have to use whatever you can find online until you do a few projects and get a better feel for it. Try to request that info from your client or contractor if you can.

In my area things like small wood apartments can be $150/SF, tall concrete condo buildings can be $300/SF, and hospitals can be $500/SF.
It really varies based on use, location, size, complications, finishes, building type, etc, etc.

Most of the time I get 0.5% to 1% of construction cost or $0.80 to $1.20 per square foot.
A small/complex project is on the high end of that range and a large/simple project is on the low end.

I only do a takeoff of hours for very small stuff.