Cabinet Resolution No. 583: from 1 January 2027, contractors' overhead on budget-funded construction is 20%, profit margin 7%

The government has set uniform overhead and profit norms for contractors on projects built with public funds. From 1 January 2027, overhead will be 20% of direct costs and the profit margin 7%. Calculation will be done electronically in the Shaffof Qurilish system.

The procedure was approved by Cabinet Resolution No. 583 of 21 October 2026 and applies from 1 January 2027. It is used when preparing design and cost documentation and determining the initial cost of construction.

Who is affected

• construction, reconstruction and repair financed from the budget system;
• projects of business companies in which the state holds at least 50% of the charter capital.

The norms

• overhead — 20% of the estimated cost of direct expenses;
• required profit margin — 7%;
• other production costs — 2.5% of direct costs, rising to 5% in mountainous, desert and hard-to-reach areas;
• for contractors operating no more than one calendar year that have not submitted balance-sheet and financial statements, overhead is 10% and the profit margin 7%.

How it will work

For directly awarded contracts, the calculation, verification and approval of overhead will be done electronically in the national information system Shaffof Qurilish. Figures for each contractor will be published in the system.

In tender contracts, overhead cannot be changed during the contract term, except when tax legislation changes. Other production costs are paid based on the actual volume and value of the work completed.

What this means in practice. From 2027, contractors on budget-funded projects must prepare estimates using these norms: the total mark-up on direct costs is 27% (20% overhead and 7% profit). If your company is under a year old and has not filed reports, overhead will be 10%. For customers, the norms provide a single basis for checking estimates.

Photo: Drksll, Wikimedia Commons (CC BY-SA 4.0)