How are indirect costs defined in construction estimating?

Indirect costs in construction estimating refer to expenses that cannot be directly attributed to a specific project phase or task. These costs support the overall project but do not directly correlate with labor, materials, or specific activities. Indirect costs include items such as administrative expenses, utilities, equipment rental, and site overhead that facilitate the project as a whole rather than a particular portion of it.

Understanding indirect costs is crucial for comprehensive project budgeting and financial forecasting, as they often make up a significant part of the total project expenses. By accurately identifying and estimating these costs, estimators can ensure that bids are competitive while still covering the necessary overhead to complete the project successfully.