What is construction rate analysis?
The calculation of rate (cost) per unit of any construction work is known as Rate Analysis.
It includes the quantity & cost of required materials, labour charges and other petty expenses. The analysis depends on the scope of work.
You can calculate the rate of analysis for almost every construction work.
Purpose of Rate Analysis
You may probably wonder why the hell am I calculating this thing?
- For Quick decision making
- To obtain the actual cost of the project
- To revise the schedule as per the market price
- For Economical use of construction materials & manpower
To be precise, let us discuss this with four typical scenarios.
Typical Scenario 1
Consider you have calculated Bill of Quantities (BOQ) for a PCC work at the whole sum and issued the contract.
After finishing the work you came to know there are a few more areas where you need to do the exact PCC work. At what basis will you issue the amendment of the work order to include the scope?
Rather than measuring the exact area and calculating the BOQ once again, you can simply multiply the cost by the area need to be work. As simple as that.
Typical Scenario 2
Consider the above same work scenario. While commencing the work you came to know the blue metal price has increased INR.10 rupees per cubic feet.
From the rate analysis workout, you can simply replace the blue metal price with the updated one.
Typical Scenario 3
At what basis will you allocate the manpower & the required budget according to the timeline?
If you have the analysis, you know the exact manpower output and required budget for any given time.
Typical Scenario 4
Your client asks you to commence the same above work at a little less price. How would you know that the rate brings profit or loss for you (or to your company)?
If you were already doing the analysis, you would know the contractor profit percentage. As a result, you can easily calculate the profit or loss and let the client know whether you can continue the work or need to revise work order.
How do you calculate rate analysis? – Basic Steps
Preparation & Data Requirements
In order to calculate the rate analysis for civil works, you need to determine the below things
- BOQ preparation – It includes the quantity of material, cost & types, method of construction
- Material Estimation – It includes material cost including wastage
- Manpower Calculation – It includes the required skilled and unskilled manpower & the labour output
- Tools & types of equipment – It includes the required tools to get the work done
- Transportation – If the material needs to be transported from somewhere such as concrete, shuttering materials it includes the transportation charges
- Contingencies – Buffer amount for some material rate such as steel which often rises
- Admin Expenses – Salary for supervisors, telephone bills, travel expenses, power & tax
- Overhead Expenses & Profits – It includes the profit of contractors, repair and maintenance works, amenities for labours, manpower compensation & Insurance etc
Rate Analysis Format
|Scope of the Work|
|Tools & Tackles||1%|
|Add for Sundries & Contingencies||3%|
|Add for Overhead & Contractor profit||10%|
|Rate per m3|
Hope you enjoyed the topic. Happy Learning 🙂
Sir. How to calculate or how much % should consider Admin Expenses for Individual Task or work unit price in BOQ( Like for Slab work in building construction)
That should be varied based on the specific work but generally, it will take in percentage of 0.5% to 2.5%.