🎯 Learning Objectives

• Identify and recover overhead reliably (not as a guess).
• Set a target margin and compute the correct selling price.
• Convert markup ↔ margin and avoid math traps.
• Build a risk register to size contingency from expected exposure.
• Use allowances & alternates without hiding contingency or profit.

📋 Overhead & Indirect Costs (HVAC/Demo-typical)

• G&A: office/admin, accounting, rent, IT, insurance, legal, marketing.
• Ops support: safety program, PPE stock, small tools, fleet admin, training.
• Precon: estimating, site walks, bid bonds, software subscriptions.
• Project support: PM oversight (non-job-coded), QC audits, compliance.

🧯 Worker Protection & Environmental Remediation

• LOTO, spotters, scaffolding/lifts, fall protection, debris chutes, silica controls.
• Containment/negative air, air monitoring, HEPA cleanings, ICRA resets (occupied work).
• Lead/asbestos surveys & abatement (separate scope or allowance as required).
• Soil/water handling, special waste manifests, environmental consulting.

🏗 Temporary Facilities & Site Security

• Porta-johns/handwash stations, site lighting, fencing/barricades, tool storage.
• Badging/guards, camera towers, after-hours security sweeps.
• Price as lump-sum or per-week with stated duration assumptions.

📈 Profit (Margin) & Contingency — Correct Order

Apply in this sequence for clean math and reporting:

Direct Cost → + Contingency → + Overhead → ÷ (1 − Margin) = Selling Price

• Contingency = buffer for unknowns (use risk register, not a flat guess).
• Overhead = cost recovery (company survival), not profit.
• Margin is on price (profit ÷ price), not on cost.

🕳️ Allowances & Alternates (Keep Transparent)

• Create scope-specific allowances (e.g., unforeseen saw-cutting, utility locates).
• Tag as “Owner Use Only” or “If Required” to avoid baseline confusion.
• Alternates priced as explicit add/deduct lines; do not hide contingency inside.

➗ Markup vs Margin (Don’t mix these!)

✍️ Suggested Clarifications (copy/paste)

• Overhead recovered at stated rate; escalation or abnormal market shifts are excluded unless noted.
• Contingency is for unknowns within scope, not added scope; unused amounts are not credits unless agreed.
• Allowances are owner-directed; alternates are valid 30 days and require schedule impact review.
• Profit (margin) applied to final cost after contingency and overhead for transparent reporting.

🧰 Overhead, Profit & Contingency Mini Tools

*Replace ROM inputs with your firm’s actual rates and historic risk data.