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Contractor Fees


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I have a question totally unrelated to VW but need some input from outside my vicinity.

When a contractor charges a percentage fee, say 10% for overhead and profit, would you typically expect accounting, administration and maybe even insurance to ba a part of the 10%, a percentage fee on top of the 10%, or a fixed line item fee? What about mobilization or other?

I'm in the NW U.S. and would be interested in hearing what the common practices are either in the rest of the country or elsewhere.

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You imply a negotaited contract.

Depends on a lot of variables. One of the things an architect does, or could do, is define what is and isn't included in O&P.

I would say the overhead and profit category generally covers everything a general contractor does, outside of the 16 CSI construction divisions. If the Contractor does rough carpentry, for example, that would be a separate line item.

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We occasionally function as the project manager/general contractor on a project, if it's a good fit.

We typically charge a negotiated fee (10?15%) for all sub-contracted/supervised work with a separate line item for any work performed by us. Critical incidentals (port-a-potty, traffic management, storage, etc.) specific to the jobsite are charged at the cost+% rate with the "back-office" stuff covered by the management/GC fee.

Unless there was some unusual insurance requirement, we would normally consider that to be an overhead item. Any bookkeeping/accounting is also overhead. If the contractor wants to make 10% *profit* (after overhead and other expenses), he should spell that out clearly. But that would be unusual in our market.


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