Question & AnswerQ&A (DPWH DEPARTMENT ORDER NO. 29, S. 2011)
The ABC shall be prepared on the basis of the duly approved design for the project, following existing regulations.
All items must conform to the Standard Specifications for Highways and Bridges (2004 revision), Standard Specifications for Public Works (1995), and approved Special Specifications for the project.
The ABC is composed of the Direct Cost and the Indirect Cost.
Direct Cost includes: cost of materials, cost of labor, and equipment expenses including rental, mobilization, and demobilization.
Cost of materials includes cost at source, processing, hauling, handling, storage, and an allowance for waste and losses not exceeding 5%.
Labor costs cover salaries and wages as authorized by DOLE and fringe benefits such as leaves, Workmen's Compensation, GSIS/SSS contributions, allowances, 13th month pay, and bonuses.
Rental rates are based on the prevailing ACEL rental rates approved by DPWH. Operated rental rates are preferred as they include operator's wages and other expenses. Equipment details must be indicated in the cost analysis.
Mobilization and demobilization costs shall not exceed 1% of the Estimated Direct Cost (EDC) of the civil works items.
Indirect Costs include overhead expenses, contingencies, miscellaneous expenses, contractor's profit margin, and VAT.
Overhead expenses range from 5% to 8% of the EDC and cover engineering and administrative supervision, transportation allowances, office expenses, CARI insurance premium, and financing costs related to bid security and performance bonds.
Contingencies range from 0.5% to 3% of the EDC and include expenses such as meetings, coordination, billboards, ceremonies, and unforeseen events.
For projects above P5 million, the profit margin is 8% of EDC; for projects up to P5 million, it is 12%.
The VAT component is 12% of the sum of the Estimated Direct Cost (EDC), overhead/contingencies/miscellaneous (OCM) costs, and contractor's profit margin.
The implementing office (e.g., Head of Project Management Office) fills columns (1) to (5). The Bureau of Construction, Assistant Regional Director, or Assistant District Engineer fill columns (6) to (13) and are responsible for validating and adjusting the estimates.
Under R.A. 9184, the ABC is compared with the contractor's bid and serves as the ceiling for acceptable bid prices.
Estimators must continuously update market price information, use realistic unit prices supported by valid data, and show all assumptions in the cost analysis.
Estimates for special items must be accompanied by approved plans, specifications, construction methods, measurement, and payment terms approved by the head of the implementing office.
All prior Department Orders, circulars, memoranda, or portions inconsistent with this order are revoked or amended accordingly.
It took effect immediately upon adoption on May 16, 2011.