Factors affecting the cost of engineering services in construction

Keywords: consulting engineer (construction), factors, temporary rate, interest rate, one-time fee

Abstract

Engineering services can be provided by specialized engineering companies and individual specialists. Since 2017, Ukraine officially has the profession of engineer-consultant. Qualification Characteristic of engineer-consultant has been approved. Construction customers are allowed to additionally include in the construction cost up to 3% for the payment of the services of an engineer-consultant. The amount of these costs should be justified. An analysis of world experience shows that the main methods used to determine the cost of the services of an engineer-consultant are: temporary payment, a percentage of the construction cost, a one-time fixed payment. Depending on the type of service provided by the consulting engineer, various pricing methods can be applied. An analysis of foreign and domestic sources, as well as our own practical experience in carrying out engineering activities, shows that in order to accurately estimate possible costs and determine the price of services accordingly, an engineering company must take into account a number of factors that characterize the project in which it will participate. Such factors in particular include the class of responsibility of the facility, the scale of the project (cost), the type of construction (reconstruction or restoration), the uniqueness of the facility or individual solutions, complex construction conditions (cramped construction conditions, complex geotechnical conditions, seismicity, etc.) short construction periods or vice versa a long project with a small work intensity, a complex organizational structure of the project, the experience of an engineer in this field, the requirements for the qualifications of personnel, etc. The combination of one or more of the above factors can significantly affect to the size of the labour costs of a consulting engineer. The article summarizes factors which are the most significant and those that are the most convenient for evaluation are selected by the expert assessment method on four criteria. In the future, in order to be included in the Methodology for determining the cost of consultant engineer services, numerical values of the degree of influence of various factors must be determined. They will be included in the Methodology in the form of corresponding coefficients.

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Author Biographies

Inna Vakhovych, LLC «AMV Engineering»

Inna Vakhovych, Ph.D.(Economics), Director

Oleksander Demianenko, Kiev National University of Construction and Architecture

Oleksander Demianenko, Postgraduate student

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Published
2020-06-26
How to Cite
Vakhovych, I., & Demianenko, O. (2020). Factors affecting the cost of engineering services in construction. Bulletin of V. N. Karazin Kharkiv National University Economic Series, (98), 97-107. https://doi.org/10.26565/2311-2379-2020-98-10