APP3 (ppt)
22. THE FINANCIAL SIDE I. ESTIMATING COSTS AND Study the process of cost
OF ARCHITECTURE MANAGING PROJECT estimation and budgeting for
BUDGETS architectural projects.
sarah PRESENTATION: Prepare a
budget for a hypothetical
project, considering material
costs, labor, and other
overheads, and present the
budgeting process.
II. ARCHITECTURE AS A Research how architects set
BUSINESS: SETTING FEES fees for services and manage
AND MANAGING FINANCES their finances.
(leyzel) PRESENTATION: Create a
pricing structure for
architectural services that
balances business needs
with market rates in the
Philippines.
III. FINANCIAL RISKS AND Investigate financial risks
OPPORTUNITIES IN (e.g., client default, cost
ARCHITECTURAL overrun) and opportunities
PRACTICE (e.g., new markets) for
architectural firms.
Risk - sarah PRESENTATION: Present a
Opportunities - risk management plan for a
growing architecture firm,
detailing strategies to
minimize financial risks.
I. ESTIMATING COSTS AND MANAGING PROJECT BUDGETS
BOQ / BOM
Bill of Quantities (client’s eyes during tendering/bidding, for result) – kg/sq.m
Bill of Materials (for construction eyes) – commercial measure (by pieces, pano bibilhin
sa market ung raw materials)
BOQ: Laying of 150 mm CHB sqm. – BOM: 150 mm CHB; rebar by length and grade =
per pieces (cu.m)
A. Process of cost estimation
1. DIRECT COSTS/VARIABLE
- Variable kc nagbabago bago. BOM part ng Direct cost kc nagbabago bago ang
market
(amount na nagagastos mo directly para sa project) - Direct costs are expenses directly
tied to a specific construction project. Direct cost examples include materials, labor, and
equipment. Direct costs also include project overhead that is specific to that project. Job
supervision, surveys, and special insurance are examples of project overhead.
Usually includes:
● Materials
● Labor
● Equipment
2. INDIRECT COSTS/FIXED COST (Costs that makes the project operating, behind
the scenes) – (barracks, printing, wages ni engineers, contractor etc, surveyors,
accountants, pre-construction)
- Indirect costs are not directly attributable to a single construction task or project.
Instead, they support the overall project environment, playing a critical role in its
successful execution. Indirect costs are often referred to as overhead costs or
operating expenses.
The Estimated Indirect Cost shall consist of the following items based on accepted
construction industry practices:
(1) ○ Overhead Expenses not exceeding eight percent (8%) of the
EDC (Estimated Direct Cost), which include the following as
included;
(a) Engineering and Administrative Supervision, including
expenses for the office equipment's and supplies, power and
water consumption, communication and maintenance;
(b) Transportation allowance;
(c) Premium on Contractor's ALL RISK insurance, where
necessary; and
(d) Financing cost, e.g., premium on bonds.
(2) ● Contingencies and Miscellaneous not exceeding four percent
(4.0%) of the EDC. These include expenses for unforeseen
events and other activities.
(3) ● Contractor's Profit Margin not exceeding eight percent (8%) of
the EDC for projects with an EDC of more than PhP 5 million
and ten percent (10%) for projects with an EDC of PhP 5 million
and below.
(4) ● Value Added Tax (VAT) Component in accordance with law, five
percent (5%) in the case of a property owned by a government
agency, or twelve percent (12%) in the case of a property
owned by a private party, of the sum of the EDC, Overhead,
Contingencies, Miscellaneous, and Profit.
In all cases, the Indirect Costs shall not exceed the following limits.
ESTIMATED DIRECT Overhead, Contingencies Profit
COST and Miscellaneous (OCM) As % of EDC
(EDC) As % of EDC
Up to PhP5M 12 10
Above PhP5M to 9 8
PhP50M
Above PhP50M to 7 8
Php150M
Above PhP150M 6 8
Reference: As per COA.gov.ph
B. budgeting for architectural projects
(Shall provide a specific budget and show estimate kung magkano magagastos
base sa interview kay architect mark)
C. Prepare a budget for a hypothetical project, considering material costs, labor, and
other overheads, and present the budgeting process.
(table form presentation of budgeting containing the costs in/for construction)
Sample for road construction but using DETAILED UNIT PRICE ANALYSIS: (SIMPLIFIED
AND ONE BY ONE COMPUTATION)
SUMMARY OF ESTIMATES:
II. (Reference: UAP-IAPOA DOCUMENT 210: ARCHITECT’S GUIDELINES FOR
STANDARDS FOR PROFESSIONAL PRACTICE (SPP) COMPLIANCES – METHODS
OF COMPENSATION) leyzel https://www.studocu.com/ph/document/university-of-the-
cordilleras/architectural-design-8/standard-of-professional-practice-210/90543875 dont
worry Sarah na-doublecheck ko na yung infos dito and legit naman, mas organized din
I hope ito na yung pricing structure na tinutukoy 🥺
Rule I – Title and Rationale
Rule II – Method of Compensation
RULE III – Schedule of Fees on All Types of Architectural Services
RULE IV – General Conditions
EXAMPLE: (aside from these worksheets, meron ding mga situation problem and solutions na
pwedeng isama to compute the architects fee, using the provided tables)
May nagtanong pala sakin hahahaha ano daw pakulo natin sa report 🥺 pwede din gawing quiz
yung 6 na problem pa na nahanap ko then diretso lecture yung solution. Then, ito na diretso
gamitin ulit natin sa 15? questions na needed for quiz.
45mins reporting so 15 per subtopic, hoping kayanin kasi medyo mahaba explanation nito.
https://www.academia.edu/38325970/Architects_Guidelines_Official_Gazette_
III. (Sarah, wala po akong mahanap na sample mismo ng risk management plan, ito lang
https://www.scribd.com/document/508284581/RSW-03?
fbclid=IwY2xjawIdvkJleHRuA2FlbQIxMAABHZmDO9CX_lCxFoQpTbfGvZhX4UH7xr9fO
M_VoUiFF2HcMqI4GLy2ACtHdQ_aem_NyoiqHIwDmkFhwmOb-i-fw )
RISK – SARAH
The architect doesn’t consider the indirect cost in cost estimation
