1 September 1997
c. Indirect costs are those costs which cannot be
attributed to a single task of construction work.
d. Parametric data base. A parametric data
These costs include overhead, profit, and bond.
base of predefined assemblies for buildings and site
Indirect costs are also referred to as distributed costs.
work; and HTRW work using UPB pricing, has been
developed and is discussed in appendix E.
d. Estimates based on detailed design will be
developed from separate direct cost pricing of labor,
e. Development of specific tasks. When
material, construction equipment, and supplies.
standard tasks do not meet project needs, specific
Applicable indirect costs will be added later to reflect
new tasks need to be developed. Such development
the total construction cost. Other costs, including
requires experience. Descriptions developed must
lands and damages, escalation, design contingencies,
adequately define the scope and material
construction contingencies, construction supervision
requirement for each task. Unit cost for each task is
and administration (S&A), Engineering During
developed as a direct cost with separate costing for
Construction (EDC), As-built, and Operation and
the labor, equipment, and material components.
Maintenance (O&M) Manuals, will be added to the
Notes which explain key factors in the pricing and
construction costs to determine the total project cost
methodology should accompany the task
as required by program specific requirements.
development. Comparison with existing pricing
guides is recommended.
3-5. Price Sources
(1) Labor unit cost. This cost is based on a
defined crew from the UPB or on a newly developed
a. Various pricing sources should be obtained
crew which performs the tasks at an assigned
and be available to the cost engineer. In pricing
production rate. Hourly rates for each craft are
from any source, experience and ability to relate data
applied to the crew labor to arrive at the hourly crew
in hand to a specific circumstance is important. The
labor cost. The total crew labor cost/hour is divided
following discussion is provided on commonly used
by the expected production rate (units/hour) to derive
sources and source development.
the labor cost/unit.
b. Unit Price Book (UPB). The unit price book
(2) Equipment unit cost. This cost is derived
is the common name for the U. S. Army Corps of
similar to labor unit cost. Hourly equipment rates are
Engineers construction direct costs data base. This
obtained from the appropriate regional manual,
UPB is printed in hard copy and is part of MCACES.
entitled, "Construction Equipment Ownership and
It contains repetitive construction tasks with direct
Operating Expense Schedule" (herein referenced as,
cost pricing (labor, equipment, material) based on a
Equipment Ownership Schedule), Engineer
typical crew and production rate for new construc-
Pamphlet (EP) 1110-1-8, or developed according to
tion. Some UPB line items may include quotes for
the methodology as described in this pamphlet.
work that is fully provided and installed by sub-
contractor. All quotes for work fully priced by
(3) Material unit cost. This cost is developed
subcontractor are shown in the UPB, column iden-
using vendor quotes, historical costs, commercial
tified as "Unit Cost." Each office is encouraged to
pricing sources, or component calculations. The
use this pricing source and to refine the data base to
price should include delivery to the project site.
more accurately reflect local costs at the project site.
f. Commercial unit cost books. These common
c. Historical data. Historical costs from past
sources are typically available through subscription
similar work are excellent pricing sources when
or purchase. Basis of costs shown are typically
adequate details have been saved and adjustment to
explained along with adjustment methodology. Such
project specifics can be defined. Portions of other
publications are valuable "second-opinion"
estimates having similar work can be retrieved and
verification and appropriate for minor commercial
re-priced to the current project rates. Automated
type work item pricing.
historical data bases are discussed in appendix E.