A SYSTEMATIC STUDY ON SITE OVERHEAD COSTS IN CONSTRUCTION INDUSTRY

R.Janani, P.T.Rangarajan, S.Yazhini

Abstract: Construction sector is the one of the largest employer in the country. It has become a highly competitive field with a minimum profit. Construction costs are two types; one is direct cost (labors, materials, P & M, Equipments etc...) Other one is indirect costs/Overhead costs (Staff salaries, Staff benefits, Conveyance, Labor miscellaneous, Internet, Watch and ward etc.) and is added as a percentage to sum of labor, material and equipment. Normally 10 to 15% of contract value will be taken as overhead costs. Overhead costs cannot be neglected, but the indirect costs should be in control always. If the cost goes out of control, the contractors will not be in business. The article discusses about overheads, overhead percentage on contractual value, factor affecting the overhead costs, major issues faced by contractors, how overhead costs affects the income, Engineers/Contractors view on overheads, investigation and control of overhead costs, creating cost awareness among employees, lists out the major items which affects the overheads, interviews with professionals and data collection from the projects and hence creates awareness while bidding and plan the financial resources effectively

Keywords: Overhead costs, bidding, Engineers, Contractors

DOI: https://doi.org/10.15623/ijret.2015.0410026