Construction is one of the main sectors in the Palestinian national economy. Since nineties the observable expansion of this sector has led to the revival of the construction profession, promoted and encouraged new investments in Palestine. So it is essential to examine all component of this industry to assist the development of this industry in Palestine.
The financial components of any construction item consist of three main parts, the direct costs, indirect costs and profit margin. Because of the importance of the indirect cost, it is beneficial to investigate this part and investigate its influence on the contractors’ strategies and their business progress. In this project the overhead cost in construction project in Palestine will be investigated. Although overhead cost are extremely important in construction estimation, they can be easily overhead. Neglecting overhead cost has forced some contractors out of business, because these costs constitute a significant portion of the total cost.
This research, will consist of two parts, one purely theoretical and other will be the application of the result obtained from theoretical research on a construction project that was executed and compare the estimated overhead cost with the actual overhead cost in this project, in order to represent some recommendations that would constitute a point of reference in how to deal with overhead cost in any construction project.
The first part of research will cover following main aspects:-
1- Cost definition, classification of cost and the concept of overhead cost.
2- Classification of overhead cost.
3- The importance of studying, analyzing and investigating overhead cost.
4- Study the effect of the proper management to decrease or increase the overhead cost.