2. • Purpose of Rate analysis.
• Quantity of Materials.
• Different components of rate
3. ANALYSIS OF RATES
• The determination of rate per unit of a
particular item of work, from the cost of
quantities of materials, the cost of labourers
and other miscellaneous petty expenses
required for its completion is known as the
Analysis of Rates.
• The rates of materials and labour vary from
place to place and hence the rates of different
items of works also vary from place to place.
4. Purposes of Rate analysis.
Purposes of Rate analysis are as follows:
• To determine the current rate per unit of an
item in the locality
• To examine the viability of rates offered by
the contractors
• To calculate the quantity of materials and
labour strength required for project planning
and
• To fix up labour contract rates.
5. How to fix up rate per Unit of an item
(Unit means unit rate viz. cost of 1 cu m brick work, 1 cu
m concrete work etc.)
• The following 5 sub-heads are estimated and
summation of these is rate per unit of an item.
– (a) Quantity of materials and cost,
– (b) Labour costs,
– (c) Cost of equipments or Tools and Plants
– (d) Overhead or Establishment charges (including
incidental) and
– (e) Profit.
6. (a) Quantity of materials and cost,
• The estimator takes off the quantities of
various materials required per unit quantity of
an item following the detailed specification &
calculates costs from local market rates.
• Quantities of materials are those required per
unit rate of work delivered at work site & its
costs include first cost, freight, transportation,
sales tax & insurance charges as arises in
question.
7. (b) Labour costs,
• To obtain labour costs:--
• the number and wages of different categories of
labourers, skilled, unskilled,
• namely mason or carpenter, mazdoor, boys etc.
required for each unit of work should be known
• And this number is to be multiplied by the
respective wage per day (or per hour)
8. (c) Cost of equipments or Tools & Plants
• Wherever possible the cost & ordinary T.& P.
those are required for general use should be
allocated to specific item of rates.
• For example the cost of operating a concrete
mixer should be spread over those items of
rates for which it is used.
9. (d) Overhead or Establishment charges
(including incidental)
• This includes such items as office rent
depreciation of its equipments, salaries of office
staff, postage, lighting, travelling, telephone
account, plan and specification etc.
• Small tools, planks, ladders, ropes and such hand-
tools as the contractor provides for his workman
should also be included in the overhead charges
as suggested in (c). This is usually 2.5 % of the net
cost of an unit of rate & may rise up to 5%.
10. Overhead charges may be divided under
two categories
General Overheads and Job Overheads:--
• A contract firm used to maintain through the
years irrespective to running works in hand.
At time there may be no work or several
works under execution..
11. General Overheads and Job Overheads.
Contd.
• The general expenses to maintain the office
have to be borne and all such expenses are
considered general overheads such as:--
a)Salaries of office staff,
b) Purchase of stationary articles, printings,
postages, repair etc.
c) Travel expense
d) Telephone & electric bills
e) Rent & taxes and all such expenses
required to run the office
12. OVERHEAD COSTS
• The overhead costs comes to about 6-8% of the
project cost and
• include the indirect expenses incurred during
the execution of a project
13. OVERHEAD COSTS contd.
• Job Overheads
• a) Supervision (salaries of engineer, supervisor
etc)
• b) Handling of materials
• c) Repairs, carriage, depreciation of T&P. d)
Labour amenities
• e) Workers compensation, insurance etc
• f) Interest on investment
• g) Losses on advances
14. Job Overheads
• These are the nature of expenses directly
incurred to construct a job or project such as
• a) Supervision (salaries of engineer, supervisor
etc) engaged for the work
• b) temporary sheds or house and godown
rents for the work,
• c) Small tools, planks, ladders, ropes and such
hand-tools as the contractor
15. • b) Handling of materials
• c) Repairs, carriage, depreciation of T&P d)
Labour amenities
• e) Workers compensation, insurance etc f)
Interest on investment
• g) Losses on advances
16. • c) Travel expense
• d) Telephone
• d) Rent & taxes Job Overheads
• a) Supervision (salaries of engineer, supervisor
etc)
• b) Handling of materials
• c) Repairs, carriage, depreciation of T&P
17. • d) Labour amenities
• e) Workers compensation, insurance etc
• f) Interest on investment
• g) Losses on advances
• h) interest on investment
• i) theft and loss etc.
18. (e) Profit.
• Generally a profit of 10 % should be
considered reasonable for ordinary contracts
after allocating all charges of equipments,
establishments etc.
• For small jobs 15% profit & for large jobs 8%
profit should be considered as reasonable.
