TECHNOTE Estimating Indirect Costs

TECHNOTE

Estimating Indirect

Costs

2 | TECHNOTE – Estimating Indirect Costs

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Technote Reference: CAN-TCH-NTE-0021

Technote Version: 00

Technote Date: April 2021

Information is correct as per the functionality present in

Candy V 2.01f03.2


TABLE OF CONTENTS

INTRODUCTION ......................................................................................................................... 4

CREATING A NEW INDIRECT COST BILL ................................................................................ 5

Indirect Cost Documents ......................................................................................................................... 7

Trade Definitions ..................................................................................................................................... 7

Indirect – Time Input (Basic Method) ...................................................................................................... 8

Time Units .................................................................................................................. 12

Indirects – Start and End months (Standard method) ........................................................................... 13

Section Headings ......................................................................................................... 16

Level Headings ............................................................................................................ 18

Indirects – Barchart Input (Advanced method)...................................................................................... 19

Editing an Activity ........................................................................................................ 21

INDIRECT COSTS FROM THE MASTER ................................................................................. 22

Changing the Program Start Date ................................................................................... 25

Calendar setup ............................................................................................................ 27

Using Tied (Hammock) Activities .................................................................................... 29

INDIRECT COST TOTAL DISPLAY .......................................................................................... 30

INDIRECT COSTS RESOURCE ANALYSIS ............................................................................ 31

INDIRECT COSTS REPORTS .................................................................................................. 33

COPY INDIRECTS TO BILL PAGE........................................................................................... 35


INTRODUCTION

The Indirect cost bill in Candy is a second bill that allows users to price costs such as Overheads, Site Establishment and Plant. In addition, the Indirect bill gives the user optional access to a barchart to assist with pricing Indirect costs linked to time also known as Time Related Costs. The Indirect Cost bill can be created from scratch or to speed up the pricing process may be copied from a Master Job and adjusted with necessary amendments to suit the current project. The result is powerful Indirect cost analysis reports such as Monthly spread/ forecast, Indirects resource analysis and Indirects Trade Totals.


CREATING A NEW INDIRECT COST BILL

A new job will require for a new Indirect Costs Bill to be setup. To setup an Indirect Costs Bill, take the following steps:

• Step 1: Under the Estimating tab > Indirects > Setup the Indirect Costs bill.

A New Indirect Costs Bill window will open.

• Step 2: Tick Create an empty Indirects bill, then select Create Indirect Bill.

You have the following options are available to create an Indirect Bill:

• Copy Bill from Master (Clear quantities)

o This option will copy the Indirect Costs schedule from the selected master into the current job, excluding the master quantities if the “Clear quantity” tick box is not selected and if selected it will include the master quantities.

• Copy Bill from Master (Clear Starts and Ends)

o This option will copy the Indirect Costs schedule from the selected master into the current job with all the Starts and Ends if the “Clear Starts and Ends” tick box in not selected and if selected it will require the user to enter the Starts and Ends dates.

• Create an empty Bill (Copy Start from a Planning Program)

o This option will create a new Indirect Costs schedule in the current job with an option of copying start dates from a Candy Planning Program – Candy will list all existing programs in the job to choose from.

The new Indirect Cost program setup window will open. Here you will be able to enter new start date.


• Step 3: Select the new date, when you want the week to start and how many days you want for a working week.

• Step 4: Click Yes to confirm the change of the date.

• Step 5: Click OK to continue.


Indirect Cost Documents

There are various types of Estimating Indirect Costs documents available in Candy namely:

• Indirects – Time Input

o This option limits post tender control or monthly spreads.

• Indirects – Start and End months/weeks

o This option allows for accurate monthly spreads but is restricted to monthly or weekly entries.

• Indirects – Barchart Input

o This is the ideal option for accurate Indirects calculations, monthly spreads and Indirect allowable histograms. This Option will make use of the activities to spread the indirect costs and is the ideal option used to align the indirect costs to the construction program.

Trade Definitions

To start pricing Indirects a Trade for Internal Preliminaries is required. To add a Trade, take the following steps:

• Step 1: Under the Estimating tab > Main > Definitions and Settings.

Alternatively, you may select the icon on the toolbar.


It is highly recommended to differentiate Internal Preliminaries from Client Preliminaries. This is achieved by using a different trade code for each i.e. Trade code “a”- for Internal Preliminaries and “A” - for Client Preliminaries. This will make Analysis easier for internal control purposes.

Indirect – Time Input (Basic Method)

• Step 1: Under the Estimating tab > Indirects > Indirect Cost documents.


• Step 2: Select document 1.1.1 Indirects – Time Input, then click on Select.

Price codes can be directly created on the Indirects bill or created in the Price Code listing document and then added to the Indirects bill.


To start creating Price codes on the Indirects bill, take the following steps:

• Step 1: Select the Size to top half button to move the Indirects Bill to the top of the Candy window and select the Size to bottom half button to move the Price Code listing to the bottom half of the Candy window.

• Step 2: On the Price code listing document click on View > Group by > Trade.

To collapse all the headings press Shift, Ctrl & Spacebar.


• Step 3: Select the required Price Code and drag and drop it onto document 1.1.1 Indirects – Time input.

Alternatively, you can type it into the Price Code column to auto fill the line item.


• Step 4: Change the 0 in the Number column to 1 and enter, then enter a 6 under the Price Code Time column.

The Factor column is used to proportion the amount of money that will be spread over the duration.

Time Units

When Pricing from the Master, it is important that the required default time units are checked and changed prior to the commencement of pricing. This will have a direct impact on the cost spread over the period/time allocated to each price code.

Pre-defined Time Unit can be allocated and the user can define their own preferred Unit Name.

To access, check and change Time-Unit Definitions, take the following steps:

• Step 1: In the 1.1.1 Indirects – Time Input document, select Tools > Unit Table.

This will open the Time-unit Definitions window.


• Step 3: To create a new Time Unit, click inside a blank line and enter the Unit Name first.

• Step 4: Once the Unit Name has been created, click in the Description column to select the required pre-defined Time Unit from the drop-down list.

The listed descriptions have pre-defined Time Units and related Descriptions. The Price Code will retain the Unit attached to it like in the Pricing Bill.

To change an existing Unit, click inside the Description column in line with the required field to be changed and select the new Time Unit.

Indirects – Start and End months (Standard method)

The Indirects – Start and End months document is used to enter the start and end months. This will generate a more accurate monthly spread compared to the Indirects – Time input.

To make use of the Indirects – Start and End months, take the following steps:

• Step 1: Under the Estimating tab > Indirects > Indirect Cost Documents.


• Step 2: Select document 1.2.1 Indirects – Start and End months, then click on Select.


• Step 3: Add Price codes a1102 and a1109 from the Price Code documents to the Indirects – Start and End months document by using the drag and drop method.

• Step 4: Change the 0 in the Number column to 1 and enter. Then under Month Entry – Start column enter number 1 and the End column number 13 in line with both price codes.


Section Headings

Section headings can be created in order to summarize items into logical groupings. To add a column as per above image, take the following steps:

• Step 1: In the Indirects – Start and End months, select View > Add/Remove Columns.

• Step 2: Double click on heading 13 Activity Details to expand the available list of columns.


• Step 3: Select column 13.1 Activity Type (T), then click on the green arrow to move it across to the Selected Columns panel.

• Step 4: Move the column heading up by selecting the blue up arrow.


The Activity Type will now be available on the document.

Level Headings

To insert a Level Heading above the first line, take the following steps:

• Step 1: Highlight the first line then press Ctrl & Insert. Alternatively, right click on the edge of the highlighted row and select Insert from the list.

• Step 2: Under the T column, in the cell of the inserted row, type in 1 and tab to go to next cell. Type in Indirect Costs under the Descriptions column then enter.


Indirects – Barchart Input (Advanced method)


• Step 2: Select document 1.3.1 Indirects – Barchart Input, then click on Select.

The Barchart Input document’s user entry column allows for the exact Start and Finish date to be entered, which is more advanced than the previous two (2) methods used. It has the barchart which will display the correct forecast of every indirect items in the Indirect Cost bill.


The activity bars have been created for those items that have been priced thus far.

• Step 3: Enter Price code a602 in the Price Code column and enter. This will auto fill the rest of the line.

• Step 4: Change the 0 to 1 under the Number column.

Price code a602 being a sum, the value will not change but the monthly spread is dependent on the span of the bar.

• Step 5: Place your cursor on the 1 Day activity bar that Candy created for this activity and move the cursor to the right in-line with the activity bar until the following sign appears, . When the sign appears, click and hold down the mouse button and slide the cursor to the right with the mouse button down to extend the duration of the activity bar in relation to the required time frame, then release the mouse button.

Once you release the mouse button the colour of the bar is white with blue stripes leaning forward.

As you adjust the length of the bar a pale-yellow information box appears that will indicate the Previous and Current durations. As soon as you let go of the mouse button it will disappear.


Activities created in this document with bars that have blue stripes leaning forward are activities with fixed sums which are not time related and bars with red stripes leaning backwards are time related activities with a total cost that adjusts in proportion to the span of the bar.

Activities created in the Start and End input document have bars with blue stripes that are 90 degrees to the bar to indicate that these are activities with fixed sums which are not time related and bars with red stripes that are 90 degrees to the bar to indicate that these are time related activities with a total cost that adjusts in proportion to the span of the bar.

Editing an Activity

To change the Start Date of an activity without changing the duration, take the following steps:

• Step 1: Create a new activity by adding Price Code a1105 with a quantity of 1.

• Step 2: Adjust the span of the bar to create a duration of 60 days.

• Step 3: Place your cursor at the beginning of the activity bar until the following sign appears . When the sign appears, click and hold down the mouse button and slide the cursor to the left with the mouse button down to the new required time Start Date, then release the mouse button.

As you move the bar a yellow information box appears that will indicate the Previous Start and New Start dates.

If the symbol appears red, it indicates that the start of the bar is determined by the network logic and cannot be moved manually.

Altering the duration of time related items alters the amount of money against those items.

Altering the duration of non-time related items does not alter the amount of money against that item.

Moving the position of an item alters the distribution of the money over time.


INDIRECT COSTS FROM THE MASTER

To simplify and speed up the pricing of Indirect Costs, the Master Job must have Priced Indirect Costs for every probable item or cost that can be required. When entering the indirect costs schedule for the first time in a job, the user will have an option to import the Indirect costs from the Master job. The Master job’s Indirect costs will be copied to the job and the number and time can be entered or adjusted against the relevant required costs – depending on the selected copy option.

• Step 1: In the Job Manager, create a New Job called Ventshaft & Substation – Indirects from Master.

• Step 2: Select the Companies/Jobs button.


• Step 3: Select Advanced Estimating Master, then click on Select.

• Step 4: The selected Master Job will now reflect. Click on OK to continue.

When it is a new Estimate, you will have to setup an Indirect Costs Bill before you will be able to access the Indirect Cost Documents Manager. To see how to create a new Indirect Costs Bill, click this link CREATING A NEW INDIRECT COST BILL to take you back to the chapter.

Take note that when after you have changed the date, you must select Move imposed dates relative to the new start date.


• Keep imposed dates fixed – Select this option to maintain existing scheduled dates that are later than the new start, while moving earlier dates to after the new start.

• Move imposed dates relative to the new start date – Select this option to move all scheduled dates, maintaining the same working day number in the calendar.

The bars for the items in the Indirect Costs schedule are initially white with a black border when they are copied from the master. This indicates that they are not used in the current job.


Enter values as required in the Number column. As soon as you do this, the bars are coloured either Red (to indicate time-related items), or Blue (to indicate non-time related items).

Changing the Program Start Date

If the start date was entered incorrectly, it can be changed as follows:

• Step 1: Under the Estimating tab > Indirects > Customise the program.


• Step 2: Change the date accordingly, then select OK, then confirm the new date, by selecting Yes.


Calendar setup


• Step 2: Select document 1.3.2 Program Calendar, then click on Select.


Holidays, Non-working days and so on, can be setup here.


Using Tied (Hammock) Activities

It is possible to create a summary construction program, which ties to the start and end of time-related indirect costs items.

In the example above, the top part of the Indirect Costs is a Construction Program Summary.

There are links to the start and end of specific indirect activity bars. The Indirect Costs items that use this linking mechanism are indicated by the letter T in the Type column.

Setting up the Indirect Costs Schedule in this manner allows for quick “what-if”? situations to be assessed by altering the duration and/or the sequence of the Summary Construction Program.


INDIRECT COST TOTAL DISPLAY

A Trade Total Display can be produced for Indirect Costs only. To open the Totals Display, take the following step:

• Step 1: Under the Estimating tab > Indirects > Trade Totals Display.

This will display the Values of the Indirect Costs items broken down into various Resource types.


INDIRECT COSTS RESOURCE ANALYSIS

The resources that have been used to price the Indirect cost bill items can be analysed and quantified. All the resources used in the Indirects pricing reside in the same resource list that is used when pricing the direct works bill and can thus be included or excluded from the resource analysis reports in the direct works pricing analysis.

The resource analysis reports under the Indirects menu will analyse only those resources used to price the Indirect cost items.

• Step 1: Under the Estimating tab > Indirects > Indirect Costs Resource Analysis.

The Indirect Costs Resource Analysis report filter window will open.

• Step 2: Select OK after all the required fields have been selected.


• Step 3: The Print window will open. Select Adobe PDF, then select Preview.

This will open the Indirect Cost Resource Analysis report up to Level 9.

You have options in the printing window to change fonts for a better font and layout options. You can also add background detail like a feint rule and so on.


INDIRECT COSTS REPORTS

There are several Template Reports available in the Estimating Report Manager. To access various Reports, take the following steps:

• Step 1: Under the Estimating tab > Reports > Estimating Reports.

This will open the Estimating Reports Manager.

• Step 2: Double click on Indirect Costs to expand available list of reports.


• Step 3: To add reports click on the New Report button and add more required reports.


COPY INDIRECTS TO BILL PAGE

The Indirects bill may be copied to the end of the direct bill. This is done to prepare the Job for Post Tender Stage.

Step 1: Under the Estimating tab > Indirects > Indirect Cost Documents.

• Step 2: Select document 1.3.1 Indirect – Barchart Input, then click on Select.


• Step 3: On document 1.3.1 Indirect – Barchart Input, click on Tools > Copy Indirects to bill page.

• Step 4: Select Yes to confirm the items to be added.

• Step 5: Select OK to continue.

• Step 6: Open the Pricing Bill, then scroll to the end of the bill to view all the Indirect Costs items.


The main BOQ Preliminaries Item(s) should have its own Trade allocated to it so as to carry the external value for the client’s reports. Note that the item has no Net Value which will be carried by all the Indirect Cost Bill items at the bottom of the bill.

All Indirect Cost Bill items should be marked as internal items and must not have Selling Rates.

Should you require any further assistance, please contact your local RIB CCS office.

TECHNOTE Estimating Indirect Costs

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