Preliminary and General Costs

1. INTRODUCTION

P & G’s are defined as those expenses which are incurred before work in producing the project deliverable commences, together with those costs that are non-specific to a particular Bill or Activity list item. P&G cost therefore represents those costs which cannot be reasonably allocated to any specific identified activity on a project. In this regard the international Webster comprehensive dictionary defines the word preliminary as “antecedent or introductory to the main business” and defines the word general as “pertaining to including or affecting all of the whole; not local or particular”. The term originates from civil engineering industry where those costs which are not attributable to a specific bill of quantity item rate or cost were collected under the heading “P & G expenses.” Continue reading