Evaluation of Computer Charging Policies

Engineering organizations have become increasingly concerned with the relationship of computer costs to the organization's overall pricing policies. A survey of 300 engineering organizations was undertaken to determine what computer pricing policies are currently used by the profession. The survey indicated that there is a wide variation in existing computer pricing policies. While some firms are receiving no reimbursement, other firms are charging clients for direct costs, overhead, and profit. Many intermediate situations exist between these two extremes. Over 90% of all organizations have based their computer charges on the amount of machine time used for a particular project. This approach appears questionable, since the cost of machine time is often a poor indicator of the actual costs. Mechanisms for dealing with software development costs differ significantly between firms, and firms with identical computer equipment charge very different rates for machine time. The ASCE guidelines on computer pricing contain contradictory statements and raise many unanswered questions.