BDI (Construction) Generator

BDI: Brazil's construction mark-up formula

BDI stands for Bonificação e Despesas Indiretas — literally "bonus and indirect expenses". It is the percentage that a Brazilian construction firm applies on top of the direct cost of a project (materials + labour) to reach the final selling price. While English-speaking builders use a loose "mark-up", BDI is a formal, itemised structure mandated for any public-works tender in Brazil and rigorously audited by the federal court of accounts (TCU).

What BDI is made of

• AC — central administration overhead (headquarters, payroll of non-site staff)
• DF — financial expenses (cost of working capital while the project advances)
• R — risk and unforeseen events
• S + G — performance bonds and insurance (seguros e garantias)
• T — federal taxes: PIS 0.65% + COFINS 3% + CSLL + IRPJ (≈ 8–10% under Lucro Presumido)
• I — municipal ISS, variable by city (2–5%)
• L — net profit

The official formula

BDI% = [(1 + AC + S + R + G) × (1 + DF) × (1 + L)] / (1 − I) − 1

Notice that taxes over revenue (PIS, COFINS, ISS) sit in the denominator — they are "gross-up" taxes, so you must inflate the price to net the desired margin. Direct taxes already paid on income (CSLL, IRPJ) are usually folded into the T bundle inside the numerator. Typical ranges: 20–30% for civil construction, 25–35% for pure services, and 10–20% for equipment supply, where most cost is pass-through.

Legal framework and reference systems

The federal court of accounts TCU Acórdão 2622/2013 publishes reference BDI tables by project type — anything above the upper bound is flagged as overpricing in a public bid. The new Lei 14.133/2021 (Brazilian Procurement Law) requires bidders to submit a fully itemised BDI worksheet. Public reference price banks include SINAPI (housing/edifications, maintained by Caixa and IBGE) and SICRO (highways, maintained by DNIT). Regional risk premiums push Northern and Northeastern BDI toward 25%, while competitive capitals settle around 18%.

FAQ

Is BDI negotiable? Between private parties, yes — a client and a contractor can settle on whatever BDI they want. In public bids, the BDI must sit inside the reference table or the proposal can be rejected as overpriced or, conversely, as unfeasible.

Is BDI mandatory on every public work? Yes — Lei 14.133/2021 makes the BDI worksheet a formal piece of the proposal, and the auditing court may reject contracts without one.

How does BDI differ from a simple "mark-up"? A mark-up is a single percentage; BDI is engineered piece by piece, with each line item documented. Auditors can challenge any component individually.

Does BDI apply to pure architecture/design projects? Yes, but typically lower — there is no material risk and central admin is the dominant cost, so values around 15–22% are common.