Building Realistic Unit Rates

Monday, 22 October, 2012

Breakdown of rates

• Unit rates comprise of

– Direct Costs
• Material
• Equipment/tools
• Labour
– Indirect Costs
• Overhead
• Taxes
• Price escalation
• Profit margin

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Steps to build up rates

• Resource Estimation/Allocation
– Material
– Labour
– Equipment
• Outputs of work
– Based on the resources deployed
• Costing
– Hourly/daily rates
• Labour-prevailing market rates
• Equipment: Prevailing rental rates
– Materials Prices
• Quantity of materials required( gravel, fuel, cement, CSP..etc…)
• Market assessment of prices
• Utilization factor
– Equipment
– Labour

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 Sample breakdown
Project: XXXXXXXXXXXXx Unit M3/WD
Activity: Crushed Stone Base Production per unit 370.00

A. MATERIAL B. LABOUR C. TOOLS/EQUIPMENTS

Material type Unit Qty Price ($) Cost $ Labour assigned No. UF Rate ($) Hr Cost $ WD Equipment Type Qty UF Rate ($) Hr Cost $ WD

Crushed stone M3 370.00 56.00 20,720.0 Foreman 1 1.00 8.00 64.00 Motor Grader 1 1.00 @ 120.00 960.00
Fuel Lt 200.00 2.50 500.0 Grader Operator 1 1.00 5.00 40.00 Dump Trucks 2 1.00 @ 75.00 1,200.00
Roller Operator 1 1.00 5.00 40.00 Water Truck 1 1.00 @ 50.00 400.00
Loader Operator 1 0.50 5.00 20.00 Roller 1 1.00 @ 30.00 240.00
Labourers 10 1.00 3.00 240.00 Loader 1 0.50 @ 50.00 200.00
Truck Driver 3 1.00 5.00 120.00 Water Pump 1 1.00 @ 5.00 40.00
Surveyor 1 0.50 8.00 32.00 Handtools 1 1.00 @ 2.00 16.00
Assistance Surveyor 2 1.00 6.00 96.00

Sub Total 21,220.0 Sub Total 652.00 Sub Total 3,056.00

Material Manpower Equipment

21220.00 652.00 Sub Total(C) = 3,056.00

Unit Price Sub Total (A) = = 57.35 Unit Cost Sub Total (B) = = 1.76 Unit Cost = = 8.26
Daily output 370.00
370.00 370.00
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D. Total Direct Cost A+B+C = 67.37 USD/M

E. Indirect Cost 25% of D = 16.84 USD/M3

Total Unit Rate $ 84.22

Remarks: @ Dry Rate

UF - Utilization Factor
WD - Working Day (8 Hours)
Direct Cost
* Material
* Labour

* Tools or/and Equipment

Indirect Cost
* Project Overhead 10%
* Head office overhead 2%
* Profit margin 10%
* Income tax provision 0%
* Price escalation 3%
25%

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 Sample breakdown
Project: XXXXXXXXxxxx Unit KM/WD
Activity: Grading, Shaping and Compacting (maintenance with intermediate equipment) Production per unit 1.50

A. MATERIAL B. LABOUR C. TOOLS/EQUIPMENTS

Material type Unit Qty Price ($) Cost $ Labour assigned No. UF Rate ($) Hr Cost $ WD Equipment Type Qty UF Rate ($) Hr Cost $ WD

Fuel M3 300.00 2.50 750.0 Supervisor (Foreman) 1 1.00 8.00 64.00 Towed Grader 1 1.00 @ 12.00 96.00
Grader Operator 1 1.00 5.00 40.00 Tractor 2 1.00 @ 10.00 160.00
Roller Operator 1 0.50 5.00 20.00 Towed water bouser 1 1.00 @ 10.00 80.00
Tractor Operators 2 0.50 5.00 40.00 Roller 1 1.00 @ 10.00 80.00

Handtools (camber board, traffic

Water bouser Operator 1 1.00 5.00 40.00 safety signs) 1 1.00 @ 5.00 40.00
Labours 10 1.00 5.00 400.00 Water Pump 1 1.00 @ 5.00 40.00
Surveyor 1 0.50 8.00 32.00
Assistance Surveyor 2 1.00 6.00 96.00

Sub Total 750.0 Sub Total 732.00 Sub Total 496.00

Material Manpower Equipment

750.00 732.00 Sub Total(C) = 496.00

Unit Price Sub Total (A) = = 500.00 Unit Cost Sub Total (B) = = 488.00 Unit Cost = = 330.67
Daily output 1.50
1.50 1.50
D. Total Direct Cost A+B+C = 1318.67 USD/KM

E. Indirect Cost 25% of D = 329.67 USD/KM

Total Unit Rate $ 1,648.33

Remarks: @ Dry Rate

UF - Utilization Factor
WD - Working Day (8 Hours)
Direct Cost
* Material
* Labour

* Tools or/and Equipment

Indirect Cost
* Project Overhead 10%
* Head office overhead 2%
* Profit margin 10%
* Income tax provision 0%
* Price escalation 3%
25%