Construction Cost Factors
Definition of Construction
Construction provides a complete and useable facility capable of serving the purposes for which it was designed.
Construction costs include pilings, foundations, all interior and exterior walls and doors, the roof, utilities up to the
5-foot line, all built-in plumbing and lighting fixtures, security and fire protection systems, electrical distribution,
wall and floor coverings, heating and air conditioning systems, and elevators. Not included are items generally
termed personal property such as computer systems, telephone instruments, and furniture. Also not included are
project costs such as design, supporting facility costs, equipment acquired with other funding sources (e.g. mission-
funded range targets), contingency costs, and supervision, inspection, and overhead (SIOH).
Use of Construction Cost Factors
Construction cost factors form the basis of calculating plant replacement value. The standard DoD algorithm for calculating
plant replacement value is:
Plant Replacement Value = Facility Quantity7 x Construction Cost Factor x Area Cost Factor8 x
Historical Records Adjustment9 x Planning and Design Factor10 x
Supervision Inspection and Overhead Factor11 x Contingency Factor12
While this methodology is generally accepted, there has been significant divergence on the cost factors used in these
calculations. Adoption of the standardized cost factors presented here will greatly increase the accuracy and consistency of
plant replacement value calculations across DoD.
The application of cost factors to existing real property records could lead to large errors if the inventory and units of measure are not first screened and
validated, as is done in the DoD Facilities Sustainment Model. These errors and conversions primarily involve facility categories that are measured in terms of
capacity (miles, feet, kilovolts, kilowatts, gallons, thousands of gallons per day, millions of BTU per hour, etc.)
A geographic location adjustment for costs of labor, material, and equipment, published in Part 2 of this pricing guide.
An adjustment to account for increased costs for replacement of historical facilities or for construction in a historic district; the current value of the factor is
1.05 (a 5% increase).
A factor to account for the planning and design of a facility; the current value of this factor is 1.09 (a 9% increase) for all but medical facilities and 1.13 (a 13%
increase) for medical facilities.
A factor to account for the supervision, inspection, and overhead activities associated with the management of a construction project; the current value of the
factor is 1.06 (a 6% increase) for facilities in the continental US (CONUS) and 1.065 (a 6.5% increase) for facilities outside of the continental US (OCONUS).
A factor to account for construction contingencies; the current value of the factor is 1.05 (a 5% increase).
DOD FACILITIES PRICING G UIDE Version 5.0