When it comes to construction projects, figuring out all the costs involved can be a challenge. General conditions, a category of expenses that aren’t as well-defined as labor and materials, can significantly impact the overall project cost, especially for contractors. In fact, profitability can hinge on how well a contractor accounts for general conditions costs when creating bids and budgeting. This article will discuss what are general conditions in construction and how to accurately estimate them.
Often, the most obvious components of a general conditions estimate include direct project overhead costs that are billable to a particular job on a cost-plus contract. These can include costs such as job signage, mobilization, and project management. However, it is also possible to incorporate indirect costs within the general conditions estimate, such as costs related to equipment rental or office trailers. Another common component of the general conditions estimate is finish protection, which can include everything from plastic coverings and cardboard to tarps and equipment rental.
Other important details that may be included in a general conditions section are the project management team, process for submitting change orders, and any other terms or conditions that must be agreed upon by both parties to prevent disputes. The section can also include insurance requirements, such as what type of coverage is required and how it will be paid in the event of a claim.
While this is a helpful breakdown of some of the main elements of a general conditions estimate, it’s important to remember that every job is unique and each site will have its own set of variables. The best way to create a general conditions estimate is to review historical project data and make adjustments based on the specific factors of the project.