The goal of the Society of Cost Engineers is to set these definitions and standards. I want to assure you that not everyone will agree with them nor do we expect it. Not every Cost Engineer, company, supplier, software solution provider will even apply them the same. The intent is to set a standard definition and then allow us all to explain how, when and why we deviate from these. There are and always will be acceptable deviations from these definitions and standards. The key is to understand these exceptions and the impact of them. As an example, a firm that’s product is engineering services would place engineers under direct labor where a firm that delivers an engineered product may place them in either Indirect and or SG&A. Another example could be where one company calculates their “machine rate” to include Indirect Labor where another has it as a separate category all by itself. None of these are WRONG, you just have to where they are, what they include, why they are there and the potential impact it could have to the “Should Cost”.
Please keep checking the Definitions page and feel free to comment to us on the Contact Us link. We will be adding some definitions in the next few days.
Gerald (Jerry) Collins
Owner and Founder Society of Cost Engineers