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Cost items were developed by direct observation of tasks performed on commercial building projects of 10 million dollars or more and some heavy earthwork projects.
The labor is based on perfect productivity using national average rates. The average labor rates include fringes but exclude payroll taxes and workman's compensation insurance. The equipment is based on daily rental rates of new equipment, cost of electricity and cost of fuel. Materials are priced by bulk purchase and include freight to job site with and assumed delivery of 10 miles. Material prices exclude sales tax and VAT.
The cost data is indexed by material, equipment and labor. The material index is based on a commodity index related to specific construction materials. Labor rates are gained from published indexes both public and commercial sources are used. Equipment rates are indexed by the cost of money (borrowing rates) and power (electric/fuel). Finally costs are compared with inflation indexes both public and commercial sources are used.
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