In construction, what do "hard costs" include?

Hard costs refer to the tangible and direct costs associated with the physical construction of a project. This includes the expenses for materials, labor, equipment, and any other costs that are related to the construction process itself. Option C accurately captures this definition by specifically highlighting that hard costs are focused on the physical costs linked to both materials and labor, which are essential for executing the construction work.

Understanding hard costs is critical in construction estimating because they represent the bulk of the direct expenses that will be incurred during the project. This includes everything from the concrete used to build a foundation to the wages paid to construction workers who carry out the work on site.

In contrast, other options reference costs that do not typically fall under the category of hard costs. Design fees and legal expenses pertain more to soft costs, which cover indirect expenses not directly tied to physical construction. Labor costs are part of hard costs, but project management fees usually fall under administration or overhead. Lastly, administrative expenses related to project oversight, while necessary for managing a construction project, are also classified as soft costs, as they do not directly impact labor and materials.