HAAG Certified Reviewer

Which of the following refers to contractor costs not specifically defined within a contract (such as project oversight, travel time to job site, and project meetings)?

1. Soft costs

2. Hard costs

3. Profit

4. Sub costs

The correct answer is: Soft costs

The term that refers to contractor costs not specifically defined within a contract, such as project oversight, travel time to the job site, and project meetings, is soft costs. Soft costs typically include indirect expenses that are necessary for a project but do not fall under the category of physical construction or hard costs. These costs cover various necessary project-related activities that support the overall execution and management of the project, contributing to the project's success but not being tangible in nature like materials or labor costs. In contrast, hard costs typically denote the physical expenses associated directly with the tangible aspects of the project, such as materials and labor used in construction. Profit pertains to the financial gain above and beyond total costs, and sub costs are generally not a recognized category in the context of conventional cost classifications. Thus, soft costs are the most appropriate term for contractor costs that are not explicitly outlined in contract agreements.