I train companies new to HeavyBid who historically have put their indirect costs all in mobilization. Estimators who do this come from a background of estimating with a spreadsheet or just by hand where it was difficult to spread indirect costs.  Usually companies that continue this practice are small in size and perform a limited work scope. Having indirect costs all in a mobilization biditem  (and not an indirect biditem) is not an estimating best practice and here are reasons why:

1. Estimators who put indirect costs in the Mobilization biditem don’t have a checklist. They put in what they can remember at the time of the estimate and frankly many times don’t understand what indirect costs actually occur on a project. While this might work for very small estimates it is guaranteed that significant indirect costs will be forgotten.
2. Sometimes there is no a mobilization bid item.
3. If the indirects costs are in a mobilization biditem and quantities for other items increase after the project starts (assuming a unit price contract) your company will be performing additional work at the contract price with no indirect costs associated with the increased quantities. Therefore no indirect costs will be received for the additional work which could be significant if the contract time is extended.  Indirect costs will continue with no way to invoice for them other than appealing for additional mobilization money.

Conclusion: Developing indirect costs in your master estimate will provide the essential check list that all estimators should have.  Yes you might have to sit down with the accounting department and discuss what costs get charged to company overhead and what gets charged directly to the job but it is essential that you do so. And in HeavyBid it is so simple to move indirect costs in the Spread Override screen (see below).  Estimators that I know that are formally trained in estimating theory and considered the top of the industry would never consider not have a set of indirect biditem(s).

Spread Overrides