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Indirect Expense Job Allocation for General Contractors

  • 1.  Indirect Expense Job Allocation for General Contractors

    Posted 03-13-2019 10:38
    From a general contractor's perspective, how do you all charge your jobs for indirect expenses, particularly usage of small tools and project manager/engineer time?  Being new to the GC world (previously worked for a subcontractor), I'm learning that some owners allow us to include project management/engineer time in our general conditions and others do not.  Also, I'm trying to develop a consistent way to charge small tool usage to our jobs.  I have ideas on how to do this but I want to see if they are consistent within the industry.

    To-date, small tool purchases have been charged directly to the job in most cases.  PM and PE salaries have been charged to overhead, but at the end of 2018 I did an allocation to job cost a % of their salaries.  Our PMs and PEs also do some estimating, so 100% of their time is not billable to jobs and we do not require them to keep time cards.  Our estimators currently do not have a solid way to come up with budgeted amounts for these general condition items.

    We are a newer GC company with young professionals, so forgive me if the answer to these questions may seem like a no brainer.

    Thank you in advance for any input you can provide regarding indirect expense job allocations and compilation of general condition budgets!

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    Krystal Sund, CCIFP
    Controller
    Perry Reid Construction, Lincoln, NE
    (402) 488-1666
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