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Engineering Supervision, Administrative, and Other Expenses (for INFRA)

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Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Mon Apr 13, 2009 11:21 am

This may be defined differently depending on the agency (but well known as Engineering Supervision) to many. In the DPWH, the cost is known as ESAO (I think) which is not to exceed 3.5% and other conditioned embraced therein.

In our LGU, we have practiced the use before until it is removed from the ABC (I never knew what happened back there two years ago). Being assigned back to the Engineering Office, I was asked If it is possible to incorporate such percentage (once again) so as to cover the inspection allowances of engineers doing their job at weekends (overtime, etc.).

My question is this: do we have a specific DBM circular or guidelines (for LGUs) in utilizing the same 3.5% component of the Infra's ABC. If so, what are the extents of coverage for such cost?
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Mon Apr 13, 2009 11:56 am

engrjhez wrote:
This may be defined differently depending on the agency (but well known as Engineering Supervision) to many. In the DPWH, the cost is known as ESAO (I think) which is not to exceed 3.5% and other conditioned embraced therein.

In our LGU, we have practiced the use before until it is removed from the ABC (I never knew what happened back there two years ago). Being assigned back to the Engineering Office, I was asked If it is possible to incorporate such percentage (once again) so as to cover the inspection allowances of engineers doing their job at weekends (overtime, etc.).

My question is this: do we have a specific DBM circular or guidelines (for LGUs) in utilizing the same 3.5% component of the Infra's ABC. If so, what are the extents of coverage for such cost?


I truly believed there is no cleAR guidelines for LGU engrjhez(that is why we are left behind by the NG, on our own. ha ha ha!)
I was crafting the same question as you, kaya lang nauna ka eh. I was really confused on the use of the ESAO as contained under the GPRA, adopt na lang namin yung ginagawa nang DPWH. I hope the DILG can make a comprehensive solution on this matter, maybe to adopt the method of the the DPWH from preparation to implementation of the project.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by RDV @ GP3i on Mon Apr 13, 2009 12:18 pm

engrjhez wrote:
This may be defined differently depending on the agency (but well known as Engineering Supervision) to many. In the DPWH, the cost is known as ESAO (I think) which is not to exceed 3.5% and other conditioned embraced therein.

In our LGU, we have practiced the use before until it is removed from the ABC (I never knew what happened back there two years ago). Being assigned back to the Engineering Office, I was asked If it is possible to incorporate such percentage (once again) so as to cover the inspection allowances of engineers doing their job at weekends (overtime, etc.).

My question is this: do we have a specific DBM circular or guidelines (for LGUs) in utilizing the same 3.5% component of the Infra's ABC. If so, what are the extents of coverage for such cost?

I am not aware of any DBM guidelines or circular for LGUs to adopt the same percentage amount for administrative and overhead expenses, which is also known as ESAO in infra agencies, but as I replied to engr ruel in his other post, it would be prudent to follow the same maximum 3.5% set for DPWH as well, as DPWH is the primary infra agency.

The term ESAO is used in Sec. 7.1 of IRR-A, the pertinent provision of which is quoted as follows:

"...For infrastructure contract packages projects, the ABC shall cover the individual cost components of civil works only.The other components of the project such as right-of-way (ROW), consulting services and Engineering Supervision and Administrative Overhead (ESAO), shall comply with the applicable provisions of law or agency guidelines..."

I would interpret the foregoing provision in Sec. 7.1 that ESAO, just like the ROW and consulting services, may be separated from the ABC for the infra project. However, since the ESAO is capitalized, it would eventually form part of the total cost of the project. For example, if the Sanggunian provided P100M for an infra project, the ABC may be set at P96.5M or less, and the amount for ESAO set at P3.5M. The ESAO, of course, will be spent by the procuring entity, which for accounting purposes will be finally included in the total cost of the project.

Hopefully, the foregoing answer would also answer partly the other question of engrjhez on the computation of the ABC, which before (according to him) included ESAO, but is no longer included now.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Mon Apr 13, 2009 2:10 pm

Thanks RDV and Engr. Ruel.

Next, (this may be addressed to anyone knowledgeable) I would like to ask for the table for establishing the Maximum % rates for OCM and CGP's (including mod and demobs). I remember we have such table before but I am not sure if it is amended already. It goes something like:

  • For Projects 1M and Below
    OCM = 13% of DC (max.)
    CGP = 13% of DC (max)

  • For 1M<ABC<=5M
    OCM = 12% of DC (max.)
    CGP = 14% of DC (max.)

...and so on. We have a table at the office but I would want to take a second fact (not opinion) as to the current percentages being used by other agencies (particularly on LGUs).

Please also see a supplementary query on this matter here.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Mon Apr 13, 2009 3:44 pm

[quote="engrjhez"]<FONT color=green><DIV align=justify>Thanks RDV and Engr. Ruel.

Next, (this may be addressed to anyone knowledgeable) I would like to ask for the table for establishing the Maximum % rates for OCM and CGP's (including mod and demobs). I remember we have such table before but I am not sure if it is amended already. It goes something like:

<I>

  • For Projects 1M and Below
    OCM = 13% of DC (max.)
    CGP = 13% of DC (max)

<UL>
<LI>For 1M
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Mon Apr 13, 2009 3:50 pm

Naputol ata yung reply ko. Anyway kindly look into a DPWH No. 57 Department Order Series of 2002 engrjhez, i wish i know how to use the links here so i can send you the details.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Mon Apr 13, 2009 5:31 pm

tianchon,ruel wrote:Naputol ata yung reply ko. Anyway kindly look into a DPWH No. 57 Department Order Series of 2002 engrjhez, i wish i know how to use the links here so i can send you the details.
This is the problem. I have been searching a lot about this in the net in the past month. I am not successful in locating any. Even after you provided DO#57, Google search is useless. I still can't find a copy of the issuance. If you have a hard copy of the document, may I request naman, pa-scan. And, paki send na rin sa e-mail (engrjhez@gmail.com).

Thanks,
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Wed Apr 22, 2009 10:46 pm

Engr. Ruel,

Thanks, I have received the DO.57. Question now is how do we incorporate ESAO in the allocation? (It is not mentioned in the DO). The ABC we know is the total direct cost + markups + vat. The ESAO (i believe) must also reflect in the Program of Works/Estimates from which ABC was derived.

What do we now call the quantity = ABC + 3.5% ESAO ? scratch

PS. Considering VAT was recently moved up to 12%, is it still proper to use 10% VAT on infra projects?
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Sat Apr 25, 2009 1:34 pm

engrjhez wrote:
Engr. Ruel,

Thanks, I have received the DO.57. Question now is how do we incorporate ESAO in the allocation? (It is not mentioned in the DO). The ABC we know is the total direct cost + markups + vat. The ESAO (i believe) must also reflect in the Program of Works/Estimates from which ABC was derived.

What do we now call the quantity = ABC + 3.5% ESAO ? scratch

PS. Considering VAT was recently moved up to 12%, is it still proper to use 10% VAT on infra projects?


The quanitity you mentioned is the total Appropriation of the Infra project approved by the Local sanggunian and the LCE, broken down into (2) two components as reflected into one (1) Individual Program Of Work (IPOW) namely;

A) the detailed Civil Works which is the ABC (Direct and Indirect Cost) of the project and,

B) the ESAO.

The 12% E-VAT, OCM, and PROFIT is included in the ABC.

The ESAO is still the subject of my academic discussion with our Accountant. The ESAO are government expenses separated from the ABC (although included in the IPOW) for Engineering supervision,administration and other expenses related to the project.I wish the GPPB shall issue a clear guideines on the use of ESAO (what is allowed and not) since it is mentioned in Sec. 7.1 of the IRR-A. For one, my inspectors are not allowed to claim per diems, gasolines, etc. in going to that specific project chargeable against the ESAO, pwd ba naman yun? Even the office supplies used for the project is not allowed too, ano ba itong ESAO na to Mr. GPPB? Very Happy

I will send you our sample IPOW next week engrjhez. I made some innovations from it. From that sample, I wish you can add yours too para magkakaron tayo nang acceptable IPOW para sa lahat ng LGU katulad natin. confused
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Sat Apr 25, 2009 4:50 pm

ruel t. wrote:I will send you our sample IPOW next week engrjhez. I made some innovations from it. From that sample, I wish you can add yours too para magkakaron tayo nang acceptable IPOW para sa lahat ng LGU katulad natin. confused
I'll wait for that.

For the meantime we can (surely) make a good argument: Since ESAO is mentioned in the GPRA, considering the DPWH uses it, and there is no prohibition on how to make use of it - THEN CERTAINLY, WE CAN USE IT!

If someone says "it is not allowed", then show how and why it isn't.

Kasi pag walang nagbabawal gamitin, e bakit hindi pwedeng gamitin? Kaya kung me maghahanap: "asan ang legal basis nyo sa paggamit ng ESAO? Sagot natin: "e nasan naman ang legal basis nyo na hindi namin pwedeng gamitin?" Chicken and egg ba?

lol!
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Sat Apr 25, 2009 6:07 pm

sa GAA 2008 & 2009 used by the DPWH, naka breakdown dun ang napakraming items na pwd gamitin sa ESAO nila which are all project related like;

travelling expenses, office supplies, repair and maintenance ng sskyn na gnagamit sa project, per diems, fuel expense, communication expense (pwd nga cell card eh), and other expense.

---- My point is, these things are necessary to complete the project na pwd i-charge sa ESAOi in my opinion. di ito pwd i charge sa regular operating expense ng isang departamento sa LGU as my colleagues from my LGU told me.

Sabi nila the budget operartion of LGU are different from the NG .. kaya di natin pwd gamitin ang ESAO kasi meron naman dw regular operating expense ang office para dyan. eh ang tanong ko naman, pag ubos na ba ang regular expenses ng office, sinong magbbantay sa project from the gov't side?
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by brucewayne on Sat Apr 25, 2009 8:05 pm

Sirs, di ba trabaho ng provincial/city/municipal engineer ang magbantay sa project? In case naubos na ang regular expenses ng office niyo, eh me mga RATravelingAllowance naman po kayo eh...You can use the government vehicle in supervising your projects. Communication expense? Wala bang load allowance ang Dept Head niyo para ma pasa-load niya kayo? Per diems? I think you are not entitled. Doon naman sa repair and maintenance ng sasakyan, I am sure ang appropriation ay nasa mayor's office sa maintenance of motor vehicles. With regards naman dun sa OT pay niyo, kung hindi kayo authorize ng LCE to have an overtime you can not claim. The best thing that you should do is, ask for a flexi-time from your boss. An employee shall only work forty hours in a week and beyond that entitled ka na sa overtime if authorized by the LCE. With the approval of your boss you may not go to work in one of the working days but you will have to offset that on Saturday to supervise/monitor projects and to complete the maximum forty hours.....Peace....


Last edited by brucewayne on Sun Apr 26, 2009 8:29 am; edited 1 time in total (Reason for editing : to answer all queries)
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Sun Apr 26, 2009 10:04 am

bounce yooh! tama ka bruce. di allowed and department head sa OT at per diems. travelling expenses, much even so during saturdays and sundays, etc.. Ang punto ko dito eh ppano naman expenses ng mga na assigned nating project engineers &job-orders who work during saturdays and sundays? project inspectors, expenses for meetings with end-users, inspectors from COA? Di natin eto pwde ipasa sa Contractors, ha ha ha! Mad

the dept head cannot use his travelling expenses para ibigay sa project engineers/inspectors/job-orders nya, dahil kulang na kulang yun. Walang problema sa repair and maintenance sa sskyan ng dept head, ang problema e yung mga expenses ng iba't ibang sskyan na assigned sa kanya kanyang projects.

also, We cannot use flexi-time in infrasructures magggalit contractors sa atin kasi they are working on a schedule.

ok lahat yan na i charge sa regular budget ng office kung kaya ng ofice budget, papano kung maraming infra projects ang ini implement natin? dagdag pa natin yung mga grant projects from NG na unforseen?

The regular operating expenses of a deparment cannot handle all of these even though, we have a limited appropriation for repair and maintenance (vehicles). THe repair and maintenance of vehicles assigned to the project must be chargeable to the project lalo na't matagal ang completion nito ( some took a year to complete). I
am pretty sure na ESAO related ito lahat Bruce at kasama sa CAPITAL OUTLAY. sunny
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by brucewayne on Sun Apr 26, 2009 12:04 pm

I understand naman your predicament ruel t. In our case, walang 3.5% din kasi but I was suggesting to our ME to include it also just what the DPWH is doing. Last year kasi, we had a PDAF project and the program of works includes that ESAO of 3.5%. From the 3.5% if I remember it right, 2% was for the the Monitoring Committee's honoraria and the remaining 1.5% was left with the DPWH which we don't know how was it disbursed. There are LGUs who includes 3.5% on their ABCs and from there they charged the honoraria of their BAC. Kaya kung pd sa DPWH bakit naman hindi pd sa LGUs. Gnawa na nga namin minsan at post-audited na. Our gasoline expenses and food in monitoring was charged to our MOOE kaya hindi nabawasan yung 2% at ginawa naming honorarium lahat. Oh ang saya saya di ba?
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Sun Apr 26, 2009 3:18 pm

brucewayne wrote:I understand naman your predicament ruel t. In our case, walang 3.5% din kasi but I was suggesting to our ME to include it also just what the DPWH is doing. Last year kasi, we had a PDAF project and the program of works includes that ESAO of 3.5%. From the 3.5% if I remember it right, 2% was for the the Monitoring Committee's honoraria and the remaining 1.5% was left with the DPWH which we don't know how was it disbursed. There are LGUs who includes 3.5% on their ABCs and from there they charged the honoraria of their BAC. Kaya kung pd sa DPWH bakit naman hindi pd sa LGUs. Gnawa na nga namin minsan at post-audited na. Our gasoline expenses and food in monitoring was charged to our MOOE kaya hindi nabawasan yung 2% at ginawa naming honorarium lahat. Oh ang saya saya di ba?

Now, may kakampi na ako. ha ha ha! Isa cguro ako sa LGU na nag include ng 3.5% ESAO sa infra projects namin, problem is, only the wages of job- orders project engineers are allowed by our accountant, not the fuel expenses and office supplies and others

But, definitely the procuring entity is not allowed to charge the honoraria of the BAC to the project bruce. Di papayag si engrjhez, RDV, venom, at si shobe dyan, kasi labag 'yan sa GPRA.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by brucewayne on Sun Apr 26, 2009 5:05 pm

Sir RDV, can we not charge our BAC honoraria on savings from appropriations of the same expense class? For example, we have savings from our budget in the ensuing year from unfilled plantilla positions (PS), can we not use that for BAC Honoraria (PS) through EO of the LCE and not waiting for that savings at the end of the year for it to be reverted and re-appropriated?

Ano sa tingin mo ruel t., papayag kaya si Mun. Accountant kung TWG din siya at kasama siya honorarium charge to the 3.5%? Well, this is another story true to all LGUs.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by RDV @ GP3i on Mon Apr 27, 2009 10:05 am

brucewayne wrote:Sir RDV, can we not charge our BAC honoraria on savings from appropriations of the same expense class? For example, we have savings from our budget in the ensuing year from unfilled plantilla positions (PS), can we not use that for BAC Honoraria (PS) through EO of the LCE and not waiting for that savings at the end of the year for it to be reverted and re-appropriated?

Budget Circular 2007-3, amending B.C. 2004-5A, providing for the guidelines for the payment of honoraria to BAC and BAC support staff, particularly item 3.2 thereof defined savings as referring to "portions or balances of agencies' budgets...free from any obligation or encumbrance" which are:
1. still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized;
2. arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absences without pay; and
3. realized from collective negotiation agreements...

The answer, therefore, is YES.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by brucewayne on Mon Apr 27, 2009 11:32 am

so my MBO is right. we have been receiving our honoraria charged to the unfilled positions. Very Happy
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Mon Apr 27, 2009 12:13 pm

brucewayne wrote:

Ano sa tingin mo ruel t., papayag kaya si Mun. Accountant kung TWG din siya at kasama siya honorarium charge to the 3.5%? Well, this is another story true to all LGUs.

agree ako dun kay RDV on BAC honararia charged against the savings, but not the BAC Honararia charged from the 3.5% ESAO.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Mon Apr 27, 2009 10:54 pm

ruel t. wrote:
brucewayne wrote:

Ano sa tingin mo ruel t., papayag kaya si Mun. Accountant kung TWG din siya at kasama siya honorarium charge to the 3.5%? Well, this is another story true to all LGUs.

agree ako dun kay RDV on BAC honararia charged against the savings, but not the BAC Honararia charged from the 3.5% ESAO.
Ano yun? TWG na, tapos me cut pa sa 3.5%? scratch I agree with Engr. Ruel na hindi pwede magamit ung 3.5% ESAO for BAC purposes kasi part yun ng "capitalized cost" ng project: meaning, kasama sya as essential part from which the project is dependent.

Yun lang, hindi malinaw kung hanggang saan mararating ng ESAO. I think overtime is okay, but else, i don't know:
- pwede ba sya gamitin for the hiring of additional Job Orders?;
- pwede ba sya ipambili ng service vehicle (in very big critical projects);
- pwede ba gamitin in hiring a consultant or preparation of conceptual/specialized designs?;
- or basta kayang ma-justify na merong goods or services na kailangan sa project, pwede ang ESAO?

For sure, the 3.5% ESAO can never (directly) benefit the Accountant. Very Happy

PS. to brucewayne: parang peace kayo ng Accountant nyo ah Twisted Evil
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by brucewayne on Tue Apr 28, 2009 11:38 am

Yung ESAO kasi pag di naubos eh di savings din siya engrjhez kaya pwede siya pang Honoraria. Kumare/pare ko lahat ng BAC ninong ako sa kanilang mga anak hehehe.
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Tue Apr 28, 2009 1:55 pm

Sabagay, pero hindi directly na from ESAO na maging honoraria. Antay pa ng supplemental, hehe. Very Happy
brucewayne wrote:Kumare/pare ko lahat ng BAC ninong ako sa kanilang mga anak hehehe.
Dapat the other way around para me cut ka na sa mga honoraria nila, haha (joke) lol!
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by riddler on Mon May 04, 2009 5:16 pm

engrjhez wrote:
ruel t. wrote:I will send you our sample IPOW next week engrjhez. I made some innovations from it. From that sample, I wish you can add yours too para magkakaron tayo nang acceptable IPOW para sa lahat ng LGU katulad natin. confused
I'll wait for that.

For the meantime we can (surely) make a good argument: Since ESAO is mentioned in the GPRA, considering the DPWH uses it, and there is no prohibition on how to make use of it - THEN CERTAINLY, WE CAN USE IT!

If someone says "it is not allowed", then show how and why it isn't.

Kasi pag walang nagbabawal gamitin, e bakit hindi pwedeng gamitin? Kaya kung me maghahanap: "asan ang legal basis nyo sa paggamit ng ESAO? Sagot natin: "e nasan naman ang legal basis nyo na hindi namin pwedeng gamitin?" Chicken and egg ba?



lol!

YOOH! i just emailed the details of our sample IPOW to your e address engrjhez. 'dont know how to post it here, perhaps you can... so we can dissect it. I never bothered to check it up, coz this is just a sample.. in that IPOW, we divided the appropriation into 2 components, the ABC and the Estimated Government Expenditures which is the ESAO. This kind of programming is patterned on the DO 57 of the DPWH.

You will noticed that the approved ABC is already estimated in detail, which is a requirement in the OBr and the PR, this is all along my "hunch" that, if this details falls into a favored contractor, it shall be compromised because i believed that only the BAC-TWG-Secretariat shall take hold of this not so "classified document" only to be open for public after the bidding. I hope you get my point.

It shall be back again to "chicken or eggs". OBr and PR first, or Bidding?
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by brucewayne on Tue May 05, 2009 10:41 am

could u pls post here the sample IPOW. thanks
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

Post by engrjhez® on Tue May 05, 2009 1:58 pm

Ok. For the purposes of discussion, the summary of the IPOW that Engr. Ruel sent me looks like this:
(this is page 2 of 3).



I will have to return to this later (jury duty muna sa BAC, hehe).

PS. Should Engr.Ruel allow me to post the full version (page 1-3), i will do so when i return.
geek
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Re: Engineering Supervision, Administrative, and Other Expenses (for INFRA)

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