Rate analysis

Rate analysis works out the cost of one unit of an item of work, such as one cubic metre of M25 concrete or one square metre of 12 mm plaster, by building it up from its ingredients: materials, labour, plant, overheads and profit. It is the link between quantities and money, and the basis of schedules of rates, tender pricing and the evaluation of extra items.

For each item, the analysis lists the quantity of each material per unit, including wastage, at current delivered prices; the labour by category (mason, helper, bar bender) in man-days per unit, from output norms or site records, at current wages; and the hire or owning and operating cost of plant per unit, from its output per hour. Sundries cover small tools, water and minor consumables. Contractor's overheads and profit, usually a combined percentage, are added. Taxes are treated as the contract requires.

Accuracy depends on realistic outputs and prices. Published schedules of rates and their analyses of rates from public works departments provide norms, but site conditions, method, lead and lift of materials, and scale change actual costs. A rate analysis should state its date, location and assumptions, so it can be updated when prices change. Comparing analysed rates with market quotations and past tenders keeps estimates honest.