QuestionsQuestions (DPWH DEPARTMENT ORDER NO. 29, S. 2011)
The ABC must be prepared based on the project design that has been duly approved by authorized officials under existing regulations.
All items of work used in preparing the ABC must conform to the Standard Specifications for Highways and Bridges (revised 2004), the Standard Specifications for Public Works (1995), and the approved Special Specifications for the project.
The ABC is composed of Direct Cost and Indirect Cost.
It includes cost at source (including processing, crushing, stockpiling, loading, royalties, local taxes, and maintenance of haul roads), expenses for hauling to the site, handling expenses, storage expenses, and allowance for waste/losses not exceeding 5% of materials requirement.
It must not exceed 5% of the materials requirement.
Salaries and wages as authorized by the Department of Labor and Employment, and fringe benefits such as vacation and sick leaves, benefits under the Workmen’s Compensation Act, GSIS and/or SSS contributions, 13th month pay, bonuses, etc.
Rental of equipment must be based on prevailing ACEL rental rates approved for DPWH use (stated as 2009 ACEL rates in the Order). If not indicated in the ACEL booklet, rental rates are taken from rental rate computations, with operated rental rates preferred. The equipment’s make, model, and capacity must be indicated in the detailed unit cost analysis.
They are treated as a separate pay item and computed based on the equipment requirements stated in the proposal and contract booklet.
It must not exceed 1% of the Estimated Direct Cost (EDC) of the civil works items.
Overhead Expenses, Contingencies, Miscellaneous Expenses, Contractor’s Profit Margin, and VAT Component.
Overhead expenses range from 5% to 8% of the EDC, depending on the OCM/profit percentage schedule.
Engineering and administrative supervision, transportation allowances, office expenses (equipment/supplies, power/water, communication, maintenance), premium on Contractor’s All Risk Insurance (CARI), and financing cost items (premium on bid security, performance security, surety for advance payment, and premium on warranty bond for one year).
Contingencies range from 0.5% to 3% of the EDC, and miscellaneous expenses range from 0.5% to 1% of the EDC.
Profit margin is fixed at 8% of the EDC for projects above P5 Million and up to P5 Million: (as stated) the Order specifies 8% and 12% depending on the EDC bracket—8% for projects above P5 Million, and 12% for projects up to P5 Million.
VAT component is 12% of the sum of the EDC, OCM, and profit.
The ABC is to be compared with the contractor’s bid and serves as the ceiling for acceptable bid prices, so it should be based on the approved bidding documents containing the same work items and quantities that contractors will use for their bids.