The determination of the rate of a specific item of work per unit from the cost of amounts of materials, cost of labours& other various petty expenses required for the completion of the work is identified as ‘Rate Analysis. A reasonable profit of nearly 15 % for contractors is comprised in rate analysis. For the rate analysis of a construction project, If the materials are carried from a distant place, then the cost of transport is also added. Since rates of materials & labours differ from place to place, the rates of diverse items of work also differ from place to place.
Every construction project is separated into several activities and each activity consists of diverse types of civil or construction works. The rate analysis of building projectsis calculated based on each work associated with each construction activity. Thus, it is vital to calculate the cost of every small work. The rate analysis of Civil Works is the determination of the cost of every construction work per unit amount. This cost includes the price of materials, labour, contractors’ profit & other petty expenses required for the specific work to be completed in unit quantity. The cost of resources in rate analysis is calculated as a mixture of the cost of material at origin, transport costs, and taxes. The rate of labour is grounded on the skill of the labour, such as expertlabour, semi-skilled labour,and unskilled labour.
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The objective of the Rate Analysis:
With the help of rate analysis, the costing of construction project items can be determined by location.
- It also helps to cross-check the rates obtainable by the contractor.
- To find out the precise quantity of materials & labours required for precise work.
- To finalize the labour agreement rates.
Factors Distressing Rate Analysis:
Materials mandatory for Rate Analysis
Number of Labour
Location of Work:
Elements of Rate Analysis
Elements thatestablish the rate analysis are:
- Material cost comprehensive of wastage
- Labour costs
- Plant and machinery owning
- Operating charges
- Water charge
- Insurance and risk coverage charge
- Contractor’s profit
Why Analysis of Rates is Obligatory in Construction Projects?
The rate analysis may be obligatory in construction projects for subsequent purposes:
- For the determination of tendering. In the case of tendering, the contractor may computethe cost of unit work involved in every construction activity for quoting rates. The client also requires rate analysis to compute the cost of a construction project.
- To assess the necessities of quantities of labours, machinery, and capital to finish the project.
- To optimize the use of labour, and machinery and to know the replacements to optimize the resources.
- To measure the rate of unit work from for payment increase in material or any deviations in work specifications.
- To compare the cost with the sanctioned capital of the project to take essential action of excess or less cost.
- To work out the budget of the building project and control the cash flows at numerous stages of construction work.