Electrical Estimating Methods, 4th Edition

CHAPTER 6 Direct Costs

Direct costs can be defined as those costs necessary for the completion of the project—in other words, the hard costs. Material, labor, and equipment are among the more obvious items in this category. While subcontract costs include the overhead and profit (indirect costs) of the subcontractor, they are considered to be direct costs to the prime contractor. Also included are certain project overhead costs for items that are necessary for construction. These are called project overhead costs or the general requirements of the project. Examples are a storage trailer, tools, temporary power, lighting, lifts, and so on. Sales tax and bonds are additional direct costs, since they may be contractual requirements of the project.

MATERIAL

As noted in the previous chapter, accurate material pricing for competitively bid electrical projects must be contemporaneous. Ideally, the vendor (or supplier) should have access to the plans and specifications for verification of quantities and specified products. Note: The author makes the distinction between vendor and supplier as follows: a vendor furnishes a definitive, finite scope of materials to the project, for example a lighting package or the switchgear. A supplier is defined as the entity that provides more common electrical materials such as wire, conduit, device boxes, and so on. The supplier typically will not provide a fixed price with a fixed quantity of these items, but instead will continue to supply them ...