Overheads and their impact on construction cost in Sudan

Abstract

When preparing bids of construction projects all direct costs and project overhead costs should be included as line item costs (cost components) in the bid or project’s budget. Overheads percentage (index) should be clearly identified in order to calculate projects cost accurately and precisely. The absence of logical overhead percentage in Sudan is the main reason of this research. Based on the current situation in project costing in Sudan, and the practice for calculating the overhead charges, this study targets to achieve its main objectives including identifying the overhead charges, verifying and calculating the overhead percentage in Sudan. The research is based on analytical methods by using a questionnaire and a case study. A questionnaire has been distributed to 156 construction contracting companies as well as business trade name whereas the case study was submitted to three contractors provided that all these contractors are working in Khartoum state whereas the samples were selected randomly. Statistical analysis has been used for the data analysis by using SPSS. From the questionnaire and the case study analysis shows that the calculated overheads was 30.65% provided that there are many overhead items were not calculated because they are not occurring at the case study. The researcher recommended that more researches should be conducted for finding out overhead index that represents a reference (index or a code) for calculating an exact and accurate project cost.