Category: Quantities & pricing
Prepared by Eng. Ahmed Fathy, Projects Manager ·
Definition
Rate analysis builds a unit rate from its parts: materials with waste, labour by productivity and plant, then indirect cost and profit percentages, up to the selling rate.
Why it matters on a project
It protects the contractor from a losing rate and gives a basis for negotiation and pricing variations.
Worked example
Tiling per square metre: materials 45 + labour 25 + plant 3 = 73 SAR, 12% indirect = 82 SAR, 10% profit = 90 SAR selling rate.
Common mistake
Copying rates from an old tender without analysis, though steel and labour prices have moved since.
Frequently asked questions
Direct cost or selling rate?
Direct is materials, labour and plant; selling adds indirect cost and profit.
How often should I update it?
For every tender, as material and labour prices change.
Related terms
- Unit rateThe item price per unit of measure, built from material, labour and equipment then indirect costs and profit.
- Labour productivityThe amount of work a worker or crew completes per day.
- Indirect costs (overheads)Site and head-office costs not attributable to a single item, added as a percentage.
- Overhead and profitThe margin a contractor adds to direct cost to cover the office and profit.
Read next
- How is a unit rate built up in a bill of quantities?
- Work out quantities with our free calculators: concrete, tiles, paint and plaster. Open the calculators
Does your project need quantity take-off and BOQ pricing? Send the drawings or a short description and we reply within one working day.
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