Rate Analysis: what is it and what’s the correct procedure for building up a unit rate

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Rate Analysis: what is it and what’s the correct procedure for building up a unit rate


Rate Analysis can be defined as the analytical study (qualitative and quantitative) that leads to the definition of a new unit rate referring to a given job or work type, by identifying its basic elements.

But when does a Rate Analysis become necessary?
In normal practice, a quantity surveyor uses the price list items acquired from a regional or any other official Price Book. But what if a specific work description isn’t available? Well in these cases, we need to resort to “building up” the unit rate by identifying the elementary resources as components of the analysed rate.

How is a new unit rate defined?
The starting point to define the new unit rate, is to run a careful analysis of the elements and resources that build up to form the new work item.
The elementary components, or resources, are generally the following:

• workforce
• materials
• hired equipment
• overheads
• company profits

Labor
The cost of labor is defined by the type of workers (specialised, qualified operators) and the hours of work necessary per quantity unit.

Materials
To define the cost of the necessary materials, you need to determine the following:

• the purchase price
• on-site transport costs
• unloading
• stacking and storage
• waste (an excess percentage of unwanted material due to the production processes)

Rentals
Meaning the rented equipment or machinery that may be of 2 main types:

• “operated equipment”: this means that the rental cost is inclusive of both the equipment, or machinery, and the necessary operational labor (eg. a crane and the crane operator).
The operated equipment rental includes the labor costs required for its use, the fuel, lubricants, insurance costs and maintenance.
• “without operator”: in this case the equipment or machinery is rented with the operator. This kind of freight cost does not include the cost due to labor required for its use. Neither does it take into account the cost for fuel, lubricants or maintenance.

Overheads
Overheads are the costs incurred in an indirect way and not directly related to the works or to the construction site.
On average they are quantifiable with a fixed percentage of between 13% and 17% – (may vary from zone to zone).
Overhead costs include the following items:

• Administrative and Management
• site technical systems
• surveys and audits
• temporary occupations and security arrangements
• etc.

Company Profits
Known as the expected revenue for the company and is typically 10% of the costs incurred.

find enclosed herewith the detailed rate analysis for the following items
1.excavation
2.pcc
3. concrete
4.reinforcement
5.brick work
6. cavity wall
7 plaster
8. tiling
9 i.ps

and many more.
as he material coefficient is fixed as per codes to derive the rate at your site simply correct the rates you will obtain your site rates
 

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Rate Analysis: what is it and what’s the correct procedure for building up a unit rate


Rate Analysis can be defined as the analytical study (qualitative and quantitative) that leads to the definition of a new unit rate referring to a given job or work type, by identifying its basic elements.

But when does a Rate Analysis become necessary?
In normal practice, a quantity surveyor uses the price list items acquired from a regional or any other official Price Book. But what if a specific work description isn’t available? Well in these cases, we need to resort to “building up” the unit rate by identifying the elementary resources as components of the analysed rate.

How is a new unit rate defined?
The starting point to define the new unit rate, is to run a careful analysis of the elements and resources that build up to form the new work item.
The elementary components, or resources, are generally the following:

• workforce
• materials
• hired equipment
• overheads
• company profits

Labor
The cost of labor is defined by the type of workers (specialised, qualified operators) and the hours of work necessary per quantity unit.

Materials
To define the cost of the necessary materials, you need to determine the following:

• the purchase price
• on-site transport costs
• unloading
• stacking and storage
• waste (an excess percentage of unwanted material due to the production processes)

Rentals
Meaning the rented equipment or machinery that may be of 2 main types:

• “operated equipment”: this means that the rental cost is inclusive of both the equipment, or machinery, and the necessary operational labor (eg. a crane and the crane operator).
The operated equipment rental includes the labor costs required for its use, the fuel, lubricants, insurance costs and maintenance.
• “without operator”: in this case the equipment or machinery is rented with the operator. This kind of freight cost does not include the cost due to labor required for its use. Neither does it take into account the cost for fuel, lubricants or maintenance.

Overheads
Overheads are the costs incurred in an indirect way and not directly related to the works or to the construction site.
On average they are quantifiable with a fixed percentage of between 13% and 17% – (may vary from zone to zone).
Overhead costs include the following items:

• Administrative and Management
• site technical systems
• surveys and audits
• temporary occupations and security arrangements
• etc.

Company Profits
Known as the expected revenue for the company and is typically 10% of the costs incurred.

find enclosed herewith the detailed rate analysis for the following items
1.excavation
2.pcc
3. concrete
4.reinforcement
5.brick work
6. cavity wall
7 plaster
8. tiling
9 i.ps

and many more.
as he material coefficient is fixed as per codes to derive the rate at your site simply correct the rates you will obtain your site rates
Dear Sir's,
The calculation sheet will be very useful for regular works. Please can you share the password for the file.
Thanks in advance