Welcome back to this week's episode of Midweek Modern Craftsman, where it is a lovely 10 degrees outside.

I'm happy to be sitting inside of my office recording this episode.

And today we are going to dig into some topics that revolve around cost plus contracting.

The reason that I am recording this is I recently had a consulting

call with a guy who was struggling with some questions that clients were asking him when he was

presenting his proposals in a cost plus format. And I think that most of it comes down to the way that he's allocating costs

and where he's attributing them to in his contract. So we're going to dig into, you know,

overhead project specific overhead general conditions and then market rates versus fully burden rate, all of those good things.

So if you're interested in cost plus contracts, stay tuned.

So the first thing that we are going to dig into our general conditions.

So what are some examples of general conditions?

So these are going to be typically an above-the-line item, which at times, and this is what we

dig into, could be management or supervision. Typically, I'm going to

have that as a separate line item, but temporary facilities, whether it's fencing, dumpsters,

toilets, site utilities, water, electricity, rental of equipment, job site specific communication,

safety costs, permit fees, inspections, clean up waste removal,

administrative support. So those are a few examples of general conditions. So there's a couple of

ways that you can account for these and it depends on the type of work that you're doing.

But typically when I'm looking or when you would be looking at budgeting for this,

it's going to be based on a timeline, right, where I'm going to say, hey, if this project is 12 months,

these are the costs that we're going to incur for general conditions, but I want to be able to break that down to an itemized cost.

So I'm budgeting for it, looking at bigger picture, whether it's weekly, monthly, how many, you know, how many dumpsters do we need?

...