Cost of engineer and supervision?

[jkeenan213]

Greetings all.  Been some time since I posted.  We have spent the last several months here scouting out a home location and starting a business.  We just signed a deal on a 2-story beachfront house 200sm in Valencia, Bohol.  Needs renovation and modernization even though only 7 years old, but the first floor walls inside and out and about 20% of the second floor exterior walls are massive...minimum 8-inch up to 12-inch poured reinforced concrete, not block.

Ballpark on our renovation is P1.2M up front, an additional P400K in finishes after we move in, total P1.6M.  We have been working with an engineer highly recommended locally but now time to formally engage him.  He has quoted P180K for all pre-planning, all sets of plans including demo and M&E signed and sealed, materials list, cost estimate, permits and legwork, and daily supervision of the project expected to take 4-5 months.  He has his own labor in all trades and will supply, but we can choose our own if we want.  I pay permitting fees, payroll and materials.  I have been in his house (which he is just finishing up) and it is impressive.

Best I can see as far as his fee, assuming 40-50K for plans and permits, he is asking P130-140K for supervision of a P1.4M (backing out his fee), 4-5 month project.  Less than 10%.  All discounts/kickbacks on labor/materials go to us.  Off-contract, I have told him I would provide incentive if it came in under budget.  Our business is less than 2km away and I will be on-site daily.

This seems reasonable to me, having built my own (and others) homes in my past life, but that was in the US.  I am also 60 and just built a 500sm commercial piggery supervising myself (an experience unto itself)...at my age that would be enough site supervision.  But I do know intimately the cost of materials (good and cheap) and labor (also good and bad) and the other BS ("merienda", work ethic, weekly holidays, housing good workers from the city, 10-hour days/6-day weeks, local schmoozing, priest blessings, crab mentality, etc, etc.)

Feedback? 

[Dave Hounddriver]

I think that paying 10% to an engineer/supervisor/general contractor or whatever you want to call him is reasonable.  The only trouble I can foresee is that he will want to do it his way, not your way.  If you are OK with that then it should be great.

Note: Why his way and not your way?  Buildings are cheap in Philippines because their construction methods are not the same as those in the USA.  If you want construction methods as used in the USA then expect to pay huge prices to have your house "overbuilt". 

[scott h]

If I am reading your post correctly. 10% is the norm.

When we built our house, our "architect" (a second or third cousin, something like that) drew the blueprints to our specifications, and supervised the entire project. (was not on site everyday thought). Recommended the contractor and work crew etc. etc. etc. His fee was 10% of what he estimated labor and materials would cost, BEFORE construction started. Any cost overruns that occurred to any design modifications or add-ons made by us during construction WERE NOT calculated into the 10%.

His initial estimate was very, very close.

Good luck

[robert k]

A man good at his trade will under promise and over deliver.

[scott h]

23 minutes ago, robert k said:

will under promise and over deliver

Robert, Robert........Robert.............

this is a Philippine forum, not utopia

[robert k]

13 minutes ago, scott h said:

Robert, Robert........Robert.............

this is a Philippine forum, not utopia

It could still happen. I could promise utter failure and if we got a squatters shack built I would be over delivering?