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What is the source of the costs?
Cost items were developed by direct observation of tasks
performed on commercial building projects of 10 million dollars or
more and some heavy earthwork projects.
What do the costs represent?
The labor is based on perfect productivity using national
average rates. The average labor rates include fringes but exclude
payroll taxes and workman's compensation insurance. The equipment
is based on daily rental rates of new equipment, cost of
electricity and cost of fuel. Materials are priced by bulk
purchase and include freight to job site with and assumed delivery
of 10 miles. Material prices exclude sales tax and VAT.
How are costs maintained?
The cost data is indexed by material, equipment and labor.
The material index is based on a commodity index related to
specific construction materials. Labor rates are gained from
published indexes both public and commercial sources are used.
Equipment rates are indexed by the cost of money (borrowing rates)
and power (electric/fuel). Finally costs are compared with
inflation indexes both public and commercial sources are used.