cpn presentation on professional charges.

Report
INFORMATION TECHNOLOGY
SERVICES
SCALE OF
PROFESSIONAL
CHARGES
PRESENTED BY: ABIMBOLA SALAKO, Ph.D., FNCS, C.itp
BACKGROUND AND HISTORY
1. Olayinka/Aghanenu – June 2008
2. Uwaje – May 2009
3. RR&C Comm. – Mar. 2010
4. Members Input – Aug. 2010
5. Council Final Approval – Mar. 2011
NEED FOR SCALE OF CHARGES
To aid in the regulation and control of IT practice
To promote growth in IT practice
To provide a uniform standard in conformity with
those established by other professional bodies
To provide benchmark for project cost estimation
and project planning
To safeguard the financial interest of both IT
practicianers and their clients
To provide a standard for dispute resolution
Scope of Coverage
All consulting services in IT
Corporate Organizations
Individual Consultants
Long and Short-term Projects
Exclusions:
•Purchase or Lease of project
materials
•Consultant’s Reimbursable
Expenses
KEY AREAS OF IT CONSULTING SERVICES
1.
2.
3.
4.
5.
IT POLICY AND ARCHITECTURE
PLANNING
HARDWARE INTEGRATION &
MAINTENANCE SERVICES
NETWORKING
SOFTWARE
SOFTWARE FUNCTIONALITY AND
INTEGRITY TESTING
Consulting Services Contd.
6. INFORMATION SYSTEMS PROJECT
MANAGEMENT
7. SYSTEMS CONSULTING
8. SYSTEMS AUDIT/QUALITY
ASSURANCE
9. IT CAPACITY BUILDING
Scale of Professional Fees
Rate or Percentage-Based Charges
Consultant as Lead Consultant
Consultant as participating
Consultant
Time or Duration-Based Charges
Information Technology and System
Consultant Categories
Consultant Grade
Professional Cadre Professional
Experience
(Years)
WORK POSITION
Typical Private
Sector Designation
Public Sector
Equivalent
CEO, COO, CTO
Permanent
Secretary
DG (G17)
1
Principal Consultant
Fellow
2
Lead Consultant
Fellow
Over 15
years
10-15 Years
3
Senior Consultant
Member
8-10 years
DGM, AGM, Senior
Manager
G12 – G15
(G14)
4
Consultant
Member
5-8 years
Manager, Senior
Technologist
G10 – G13
(G12)
5
Associate Consultant
Associate Member 3-7 years
Asst. Manager,
Senior
Technologist,
Technologist
G8 – G10
(G9)
6
Technologist
Technologist
Asst. Technologist
Less than 5
Years
Director/GM
G7 – G8
(G8)
Proposed level of Professional Managers
for IT and Systems Projects
Project Value
(Naira)
Project Size
1
Less than 50million
Small
Minimum
Consultant
Grade of
Project
Manager
Associate
2
50 – 200 million
Medium
Member
3
Above 200 million
Large/Very
Large
Fellow
PROFESSIONAL CHARGES FOR
CONSULTANT AS PRIME CONSULTANT
PROJECT COST
(N) CUMMULATIVE Project
Cost
FEES PAYABLE AS A
PERSCENTAGE OF COST
OF PROJECT
Up to 10 million
Up to N10 million
6.0%
Next
20 million or part
thereof
Next
20 million or
part thereof
Next
50 million or
part thereof
Next 100 million or
part thereof
Next 100 million or
part thereof
Next 200 million or
part thereof
Up to N30 million
5.50%
Up to N50 million
5.25%
Up to N100 million
5.00%
Up to N200 million
4.50%
Up to N300 million
4.00%
Up to N500 million
3.75%
SCALE OF FEES FOR OTHER PARTICIPATING
CONSULTANT (I.E. EXCLUDING PROJECT
MANAGEMENT)
PROJECT COST
(N) CUMMULATIVE Project
Cost
FEES PAYABLE AS A
PERSCENTAGE OF COST
OF PROJECT
Up to 10 million
Up to N10 million
5.00%
Next
20 million or part
thereof
Next
20 million or
part thereof
Next
50 million or
part thereof
Next 100 million or
part thereof
Next 100 million or
part thereof
Next 200 million or
part thereof
Up to N30 million
4.50%
Up to N50 million
4.25%
Up to N100 million
4.00%
Up to N200 million
3.75%
Up to N300 million
3.50%
Up to N500 million
3.25%
FEE DISTRIBUTION TO CONSULTANTS
PROJEC CUMMU
T COST LATIVE
(N)
Project
Cost
FEE %
OTHER CONSULTANTS
For Prime
System Capacity
Consultant Hard- Netware
working Audit
Building
Max Fee
% if all
Consulta
nts are
engaged
Up to
10
million
Next
20
million
Next
20
million
Next
50
million
Up to
N10 m
6.0%
4.00%
4.00%
4.00%
4.00%
Up to
N30 m
5.50%
3.75%
3.75%
3.75%
3.75%
20.50%
Up to
N50 m
5.25%
3.50%
3.50%
3.50%
3.50%
19.50%
Up to
N100 m
5.00%
3.25%
3.25%
3.25%
3.25%
18.00%
22%
Contd.
Next
100
million
Up to
4.50%
N200 m
3.00%
3.00%
3.00%
3.00%
16.5%
Next
100
million
Up to
4.00%
N300 m
2.75%
2.75%
2.75%
2.75%
15.00%
Next
200
million
Up to
3.75%
N500 m
2.50%
2.50%
2.50%
2.50%
13.75%
Balance
over
500
million
Over
3.50%
N500 m
2.25%
2.25%
2.25%
2.25%
12.50%
FEE DISTRIBUTION TO CONSULTANTS
Prime
OTHER CONSULTANTS
Max Fee
PROJECT PROJECT consultant
%
SIZE
COST
(Software
or Other) Hard- NetSystem Capacity
(N)
ware working Audit
Building
Small
Project
million
Medium
Size
Project
Large
Project
Up to
N50 m
5.25%6.00%
3.50% - 4.00%
3.50% - 4.00%
12.50%14.00%
Up to
N200m
4.50 –
5.25%
3.00% -3.25%
3.00% - 3.50%
10.50%12.50%
Up to
N500m
3.75%4.50%
2.50%-3.00%
2.50% - 3.00%
8.75% 10.50%
Very
Large
Project
Over
N500m
3.50%3.75%
2.25% - 2.50%
2.25% - 2.50%
8-00%8.75%
CATEGORIES OF CONSULTANTS
IT CONSULTANT
PUBLIC SERVICE EQUIVALENT
A – Principal Consultant
Permanent Secretary
B – Lead / Senior
D.G/Director
Consultant
C – Consultant/Associate Asst./Deputy/Chief Engr.
D – Technologist/Tech.
Officer
Technologist/Tech.
Officer
Category A – Principal Consultants
A top practitioner whose
expertise is nationally or
internationally recognized and
who provides advice at a level of
specialization where such advice
is recognized as that of an expert.
Category B - Lead/Senior
Consultant
A partner, sole proprietor, director, or
member of a private consulting practice, who
takes full responsibility for the liabilities of
such practice, performs work of a conceptual
nature in Information Technology System
design and development, provides strategic
guidance in planning and executing a project
and/or carries responsibility for quality
management pertaining to a project.
Category C - Consultant/Associate
All professional staff of a private consulting
practice performing work of an Information
Technology System nature and who carry the
direct technical responsibility for one or
more specific activities related to a project.
A person referred to in Category A or B may
also fall in this category if such person
performs work of an Information Technology
and Information System nature at this level.
Category D – Technologist/Tech.
Officer
All other technical staff of a
private consulting practice
performing work of an
Information Technology System
nature under the direction and
control of any person
contemplated in Categories A, B
Parameters Affecting Man-Month Rates
(ACEN)
S/N.
1.
2.
3.
4.
5.
DESCRIPTION
Working Hours
Basic Salary Cost of Staff
Social Costs
Company Overheads
Fee Component Costs
Working Hours
8 Hours in a day
20 Days in a month
10 Months in a year
Basic Salary Costs
S/N.
DESCRIPTION
1.
Annual Salary
2.
Annual Bonus
3.
Leave Pay
Social Costs
S/N
1.
2.
3.
4.
DESCRIPTION
Pension/Gratuity
Medical Benefits
Insurance
Leave Allowance
Social Costs Contd.
5.
6.
7.
8.
Housing
Transport
Time-Off for illness
Statutory Levies
Company Overhead Costs
S/N
1.
2.
3.
4.
DESCRIPTION
Admin. & Support Staff Salary
Costs
Office Accommodation
Finance Costs
Office Equipment
Company Overhead Costs Contd.
6. Insurance
7. Communication Costs
8. Marketing & Business
Development
9. Training & Professional
Company Overhead Costs Contd.
7. Communication Costs
8. Marketing & Business
Development
9. Training & Professional
Development
10. Provision for Loss of
Company Overhead Costs Contd.
11. Non-Recoverable Project
Expenses
12. Transport
13. Other Costs (e.g. Head
Office)
Fee Component Costs
Contingencies
Interest on Capital
Responsibility
Profit
Calculation Of Time Based Fees
(ECSA)
Total Cost of Employment of the person
Available working hours
A factor to make allowance for
overhead costs
An utilization or productivity factor to
distinguish between chargeable, and
non-chargeable time
An allowance for profit
Calculation of working Hours
per Year
ITEM
Days in the year
Weekends – 2 x 52
Public Holidays
DAYS
365
Deduct 104 days
Deduct 13 days
Annual Leave
Sick Leave
Other Leaves
Total work days
Deduct 30 days
Deduct 8 days
Deduct 10 days
220/Year
Working Hours Contd.
Work year
10 months
Work month
20 days
Minimum hours / day
8 hours
Total available hours / year
1760
Calculation of Overhead Factor
(Exclusive of Profit)
DESCRIPTION
Salaries (total cost of employment) of feeearning staff i.e. professional/technical staff
Salaries of non-fee-earning staff, i.e.
administrative staff salaries
Telephone and communication
Rental of premises, including electricity, water
and taxes
Transport (not covered directly from projects)
Paper, stationery consumables
FACTOR
1.00
0.34
0.05
0.13
0.05
0.03
Overhead Factor Contd.
Audit, bank charges, interest, insurance
0.08
Marketing
0.02
Office equipment
0.06
Training and development
0.02
Project direct expenses not recoverable
0.08
Other (i.e. Head office expenses) – could vary
widely
0.24
Net overhead factor (before markup for profit)
2.10
UTILIZATION FACTOR
Category
Utilization
Short Term
Long Term
A
0.65
0.70
A,B, C
0.80
0.85
D
0.85
0.95
Composite Factor
Composite Factor =
(Overhead Factor * Time worked
* Mark-Up)
/
(Utilization Rate)
Long Term Hourly Fees Based on Public
Sector Consolidated Salary 2010
Consultant Professional Public Sector Com Rate Per
Grade
Cadre
Consolidated posit Hour (N)
Salary
e
Fact
or
Principal
Consultant
Lead
Consultant
Senior
Consultant
Consultant
Associate
Consultant
Technologist
Fellow
Fellow
Member
Associate
Sub
Professional
Technologist
Technical
Technical Staff
Staff/
/Artisan
Intermediate
5.67
11,099.03
1,566,000.90
453,444.67
4.67
196,028.33
4.67
136,887.75
109,402.92
4.67
2,646.98
1,144.32
799.08
Rate Per
Day (N)
Rate Per
Month (N)
88,792.25
1,953,429.52
21,175.87
465,869.05
9,154.52
6,392.66
201,399.51
140,638.47
112,400.56
4.67
80,655.25 4.18
64,141.75
4.18
638.64
421.42
335.14
5,109.12
3,371.39
2,681.13
74,170.57
58,984.75
Short Term Hourly Fees Based on Public
Sector Consolidated Salary 2010
Consultant
Grade
Professional Public
Com Rate Per
Cadre
Sector
posit Hour (N)
Consolidated
e
Salary
Fact
or
Principal
Consultant
Lead Consultant
Fellow
Senior
Consultant
Consultant
Member
Fellow
1,566,000.90
453,444.67
196,028.33
4.96
4.96
11,940.76
2,811.36
1,215.38
95,526.05
22,490.86
9,723.01
Associate
Sub
Professional
Technologist
Rate Per
Month (N)
2,101,573.20
494,798.82
213,906.12
149,371.91
136,887.75
Associate
Consultant
Technologist
6.10
Rate Per
Day (N)
109,402.92
80,655.25
Technical Staff/ Technical Staff
Intermediate
/Artisan
64,141.75
4.96
4.96
4.67
4.67
848.70
678.30
470.83
374.43
6,789.63
5,426.38
3,766.60
2,995.42
119,380.46
82,865.20
65,899.23
Factors for Revision of Scale
Socio – Economic Changes
Cost of Living
Government Regulations
References
1.
Department of Public Service and
Administration – January 2003
Guide on Hourly for
Rates for Consultants
2.
Ministry of Works and Housing, Lagos.
Revised Edition
Professional Scale of
Fees for Consultants
in the construction
industry.
3.
Federal Republic of Nigeria Official
Gazette
4.
National Salaries, Income and Wages
Commission
Certain Political Public
and judicial office
(salaries and
allowances etc
(Amendment) Act,
2008
Circular, 1st July, 2010
SWC/S/04/VIII /313
References Contd.
5.
National Salaries, Income and Wages
Commission
6.
Revenue Mobilization Allocation Fiscal
Commission
The Association of Consultancy
Engineers In Nigeria
7.
8.
Circular, 1st July, 2010
SWC/S/04/VIII /298
Monetization policy in
2001
Standard conditions of
engagement for
Consultancy Engineers
in Nigeria
The Institute of Chartered Accountants Scale of Professional
Of Nigeria
Fees
Web Search
NO. Website Address
1.
http://www.ican-ngr.org/documents/SCALE OF PROFESSIONAL FEES. doc. Accessed on
June 8, 2010.
2.
http://openlibrary.org//books/DL 18756950M/itemised Scale of Professional charges
for Quantity Surveying Service for Civil Engineering Works. Accessed on June 8, 2010.
3.
http://www.ecs@.co. 2a/documents/030206-framework to Determination of
Professional fees. Doc. Accessed on June 8, 2010.
4.
http://www.dpsa.gov.za/g2g/dpsa-old/documents/gics/consultant%20fees%20.Jan
1202010.pdf. Accessed on June 8, 2010.
END
Thank You.
Abimbola Salako, Ph.D., FNCS, C.itp

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