BDI: what it is, its importance and how to calculate it in civil construction

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BDI is the acronym for Benefits and Indirect Expenses. This term is used in construction and engineering to refer to the indirect cost of a construction project or work. According to the São Paulo Institute of Engineering :

“ BDI is a fee that is added to the cost of a project to cover the indirect expenses incurred by the builder, plus the risk of the project, the financial expenses incurred, the taxes levied on the operation, any marketing expenses, the entrepreneur’s profit […] ”

In this way, the index is determined in order to cover a series of indirect expenses of the work, being useful when determining the profit margin for the company carrying out the work.

Therefore, its calculation is essential to establish the total budget for a project, calculate its sales price and ensure the appropriate profitability of the project.

The importance of BDI in civil construction
Including the calculation of Benefits and Indirect Expenses kenya whatsapp data represents a strategic step towards the profitability and sustainability of a project.

Firstly, it ensures that all indirect costs are accounted for. This includes administration, insurance, taxes and contingencies. In other words, aspects that, if neglected, can compromise the profit margin and, in extreme cases, make a project unfeasible.

Therefore, by setting an appropriate profit margin, the calculation helps ensure the long-term sustainability and financial health of the construction company.

It is worth noting that in a competitive market, understanding and objectively applying the Benefits and Indirect Expenses index represents a competitive advantage for the company, as it promotes an image of solidity and reliability.


Direct vs. indirect costs in a project
In civil construction, it is essential to distinguish between direct and indirect costs so that an accurate budget can be drawn up.

The direct costs of a project represent the materials, equipment and labor directly involved. Indirect costs, by their nature, cannot be tied so easily to a specific activity.

These indirect costs include administrative expenses, security, logistics, maintenance of equipment not directly allocated, among others.

Thus, the BDI calculation records indirect costs, also considering risks and the desired profit margin. Differentiating between cost types therefore helps in developing more effective financial strategies that are adjusted to the reality of the project.