The allowance or percentage used to recover business overheads and provide profit above direct project cost.
Why it matters
Separating OH&P from direct cost makes the commercial build-up easier to review and adjust.
Example in practice
The internal estimate shows direct cost, project preliminaries and OH&P as distinct parts of the total.
Use the term carefully
State the scope, amount, adjustment method or contract meaning whenever this term could change who carries cost or risk.