Site Overheads

A project needs offices, fencing, lighting and supervision to operate, and those costs support many trades at once, so they are often grouped as site overheads or part of preliminaries. RICS measurement guidance addresses how construction costs can be classified and measured, but terminology varies between markets and contracts, so a bidder should use the required schedule and avoid assuming one label covers every item.

Procore's guide to construction preliminaries discusses temporary site facilities, safety and project management, and these costs are essential even though they are not permanent parts of the finished building, with their exact scope following the contract. Some costs are fixed at the start, such as establishing a site office, while others recur monthly, such as utilities and guards, and separating them improves a tender and any later delay analysis.

Site overheads differ from company-wide head-office overheads: a local security contract is site-specific, while corporate finance, rent and leadership may need separate allocation methods. Supervision can be a major time-related cost, so actual staff assigned and their dates should be recorded, and a project manager split between several sites should not be charged in full to each.

The simple formula, monthly running cost times duration, is useful for recurring costs but is not a universal measure of total site overheads, so setup, demobilisation and activity-related items should be added separately. For example, $45,000 per month for 14 months gives $630,000 of recurring cost, and if setup costs $70,000 and site closure costs $20,000, the simple recurring figure is incomplete.

All values are hypothetical. Accurate tendering needs a realistic programme, because longer access restrictions, night work or remote locations can change site support needs, so the delivery plan should be used and not only a generic percentage of construction value.

Procore's general-conditions guidance also discusses site-management and temporary requirements, and different contracts place them under different headings, so bid inclusions should be compared line by line. During delivery, actual site overheads should be compared with the budget, since a variance can reflect delay, overtime, scope change or a poor estimate, and the driver should be investigated before claiming reimbursement.

A delay does not automatically make all site overheads recoverable from a client, because contract provisions, cause and actual additional cost matter, so records should be preserved for a separate entitlement review. Double counting needs avoiding too: if a subcontract price already includes its own site offices, adding the same cost again to the main contractor's support line may inflate the estimate, so scope boundaries should be clarified.

Health and safety support is part of operating a site, so training, protective systems and required facilities should be budgeted rather than treated as optional savings, with requirements varying by location and project. Cash flow also matters, as site setup may be paid before progress billings, so the timing of expenses should be forecast so a project can operate even before revenue catches up.

A clear site-overhead schedule shows each resource, duration, rate and owner, helping price bids, manage costs and explain variations, and the best estimate follows the actual delivery plan.