How to Calculate Indirect Labor

How to Calculate Indirect Labor | Calculate Man Hours. In this Stage the estimator must calculate the number of hours and the cost of all the Indirect Labor of the Project.

How to Calculate Indirect Labor. Calculate man hours
How to Calculate Indirect Labor. Calculate Man Hours

The Labor that is not uniquely assigned to a specific task or process is called Indirect Labor.

The total Indirect Labor Cost Budget in a Construction Company is the sum of the indirect hours of the Projects in execution plus the indirect hours of the Company in the Departments of Engineering, Budgets, Quality Control, Purchases, Sales, Administration, Accounting, Finance, etc.
In this post, only the indirect Labor of the personnel affected exclusively to the Project that is quoted are detailed.

About How to Calculate Indirect Labor Cost | Calculate Man Hours

Another aspect to emphasize is that the costs for use of Machinery Equipment, and Inputs of personnel categorized as indirect, should be charged in the “Cost of the Equipment” and “Input and Consumption materials” stages successively.
In a later post, we will consider the “Overheads” where, among other items, the proportional indirect hours of the rest of the Company Departments are loaded.

How to calculate Indirect Labor of a Project.

As an example we list and describe some items to examine to arrive at the total of Indirect Labor Cost Budget in a Project:

Indirect Labor Cost Budget of Works Director.                           

The Management in the Site, is in charge of the Works Director who is the professional figure in charge of the Supervision, Monitoring and Control of a Project.
The tasks developed by the Works Director are multiple and depending on the complexity of the Project, it may or may not require the help of an entire multidisciplinary team.

The main tasks of the Works Director are:

To review that the resources foreseen to execute the Project, are sufficient to execute the Plan of works in time and form.
To control from the beginning of the Works, that these are executed according to the requirements of the drawings and technical specifications.
Verify that its own personnel and those of the Subcontractors comply with the Quality and Safety regulations established in the Bidding Documents.
Execute the Certification of the works carried out, in time and form, to obtain its payment.
Verify compliance with current labor requirements.
To verify compliance with environmental regulations, etc.

Indirect Labor Cost Budget of the Departments of General Services.

This Department is in charge of guaranteeing the provision in time and in form of the basic Services in each Work, for example:
To provide Industrial Water of adequate quality for sanitary, cleaning, concretes, tests, etc. This provision is generally obtained through well drilling.
To supply the Potable Water for consumption of the personnel, for example through dispensers of cold and hot water.
To supply Electrical Energy (If the Client requests it for Tender specifications), for example with own or rented Generating Groups.
To have toilets for the personnel, the best option continues being the chemical bath and pools for the cleanliness.
To solve the Transport of the worker personnel from the place of Lodging to the site of the Work and vice versa.
Mini buses with less than two years of use and speed controllers are generally used. The authorization for its operation is issued by the Department of Security.
Maintenance of the vehicles for the movement of the Staff of the Project and of the Facilities and automotive of the Service of Nursing and Ambulance.
Maintain the telephone and Internet communications system.
The General Services Personnel also provide the labor for the maintenance of the Equipment and the provision of fuels and lubricants. Another task is the transfer and removal to the work site of all the work equipment.

Indirect Labor Cost Budget of the Topography Service | Calculate Man Hours

The topography specialist and his collaborators ensure the correct positioning and level of all the elements to be built or assembled.

Warehouse workers | Calculate Man Hours

They are in charge of the management of materials of Work, materials of contribution and consumption, spare parts, control of Stock, order and protection of tools, emission of reports etc.

Indirect Labor of the Administrative Department | Calculate Man Hours

The Administrative Department controls the documentation of the personnel, the amount of hours worked, the concretion of the payments in their salary accounts, the minor purchases, etc.

How to Calculate Indirect Labor Cost of the Autonomous Departments of the Project.

Department of Safety and Environment | Calculate Man Hours

Department of Safety and Environment, is an autonomous group in charge of guarding the Security and the conservation of the Environment that audits daily each task that is carried out in the Work to prevent incidents and/or accidents.
Its criteria are definitive Department of Safety and Environment.
The Department and indisputable when deciding which is the safe action to perform a job, so the way to do any task must have their approval.

Quality Control Department | Calculate Man Hours

It is in charge of carrying out Tests and Specimens in Civil Works, monitoring the traceability of piping in terms of certification of Materials and NDT tests, it also exercises control of compliance with the requirements of the data sheets of the Equipment, Instruments, Electrical Boards and of all materials entering the Works.
This Department is Autonomous and answers to the General Director of Quality Control in the Central Office of the Construction Company.

Specific items of the Project Schedule to which the estimator assigns a defined cost.

As an example we list and describe some of these items

Workshop and Work Mobilization

The expenses for assembly and disassembly of Workers and those corresponding to mobilization and demobilization of Work, are specific items of the Project Schedule to which the Estimator assigns defined Costs.
What is loaded in this Stage is the Indirect Labor consumed during the Work for Cleaning Services, Surveillance, Serenity, Maintenance, etc. of the Worker.

Sketch of a typical Workshop.

Contractor site layout planning. Calculate man-hours. How to Calculate Indirect Labor
Contractor site layout planning. How to Calculate Indirect Labor | Calculate Man Hours

In the LAY-OUT, we observe as an example, how to arrange the different sectors of the Worker in the place of the Construction to achieve a rational use of the area. The disposition of the Worker arises from meetings between the interested parties, i.e. the Client and the Construction Company with Safety and Environment and if it is a Plant Expansion, the Plant Operators also intervene.
In the sectors indicated as Offices are located the Containers adequately equipped for the Construction Company and the Inspection of the Customer.
In general, the sandblasting and painting areas are protected laterally and the prefabricated sector is roofed. If the Workshop borders a field, perimeter spaces are left to protect against fires.
It is the practice of Safety and Environment personnel to supervise the maintenance of order and cleanliness in the Sector.

Search for EXISTING buried FACILITIES.

Another specific item in the Project Schedule to which the Estimator assigns a defined cost is the categorization of existing buried facilities.
When the Expansion of a Plant is going to be executed and prior to the beginning of the tasks in the Field, all the information of the Plant that is in operation must be reviewed to verify the position of the existing buried facilities and thus to know the interference that can be produced.
For this task, metal detectors can be used that indicate the position and approximate depth of the metallic obstacles and also when it is going to work in the vicinity of Plant Equipment, manual searches must also be made with anti-spark shovels, in the form of a grid until the depth in which the new elements are going to be placed.
All records of searches are turned to drawings, which are signed, in sign of conformity, and serve as consultation, before the beginning of any buried activity.
In general, we can say that in the Constructions carried out previously there are signalling faults for buried elements, this occurs fundamentally for cathodic protection cables, bare grounding cables and irrigation pipes, in addition, although the buried service or process pipes are located in drawings, these are not signposted in the ground, so much attention must be paid to the subject and carefully review the entire area of Intervention before proceeding to its release.

How to Calculate Indirect Labor | Calculate Man Hours