To what extent is shop labor included in material costs? With increases in shop fabrication, this could be a big issue. Clearly there is labor that goes into the manufacture of every product, but at what point do we draw the line? For example, if a steel truss is manufactured in a shop and then shipped to the job site, is the cost of the shop labor included in the cost of the material? What if an entire kitchen is prefabricated? As in, purchased from a kitchen manufacturer, not manufactured off site by the project contractor. Would that differentiation matter? (This is for a 2.2 project.)
Also, if we have to pay a patent fee to use/adapt a product technology, is that considered to be part of the product cost?
Nadav Malin
CEOBuildingGreen, Inc.
LEEDuser Moderator
844 thumbs up
February 6, 2010 - 9:44 am
I'd suggest focus on the contractual relationships to sort out the shop labor question. If the off-site shop is run by the contractor or a subcontractor, then what happens there should be a labor cost, not a materials cost. If the shop (or kitchen fabricator) is run by an outside vendor, then they would be a "supplier" and their labor is, for the purposes of the project, part of the cost of the materials.
If it isn't clear whether the fabricator is a supplier or a subcontractor, you could establish a distinction based on whether or not they do any actual work (as opposed to just offering guidance) on the job site.
On the patent question--sorry, can't help you there. I'd say that, until a precedent gets documented, you can include it or not at your discretion.
Anyone else have experiences that might be helpful here?