Overhead Burden Ratio

March 18, 2011

Q: Has anyone been successful accurately allocating time and expenses for design, engineering, CAD drawings, documentation, project meetings and related non-job site specific hours to project estimates based upon the type of technology and project?

A: What you are asking for is an overhead burden ratio based on system type and market. Wow, I don’t think anyone I know has that level of granularity in their time allocations. I do know that integrators have struggled for years doing this on a percentage basis. What I mean by that is the size of job doesn’t always translate to the design and engineering time each project requires. For example, government projects have such a different requirement for submittals than a corporate project. A church might have 10 planning meetings to attend before the job is even started. Allocating by a percentage of the contact doesn’t work for me. I do like the idea on smaller jobs, say under $50k where you would do a “quick quote” on the labor and design time based on the closest project you’ve done with a similar scope and in the same market. If you allow for a variance, it would at least expedite your proposal and allow you to quickly determine if the customer is serious about the project.

I would love for other integrators to weigh in on this. Does anyone have a better answer or suggestion on how to be more accurate estimating design time? — CW

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