What is Rate Analysis ?

The determination of rate of particular item of work per unit from the cost of quantities of materials, cost of labours and other miscellaneous petty expenses required for the completion of the work is known as ‘Rate Analysis’. A reasonable profit nearly 10 to 15 % for contractor is included in rate analysis.

If the materials are carried from the distant place more than 8 kilometers then the cost of transport is also added. Since rates of materials and labours varies from place to place. The rates of different items of work also vary from place to place.

Objective of Rate Analysis :

• With the help of rate analysis actual cost of items can be determined on the location.
• It helps to cross check the rates offered by contractor.
• To find out the exact quantity of materials and labours required for specific work.
• To finalise the labour contract rates.

Factors Affecting Rate Analysis :

1. Materials required for Rate Analysis :

Almost in every type of construction materials are the major part. About 50 % of the total cost of any work is due to the materials itself. Hence it is very much important that the cost of the materials should be exactly found out. Market surveys should be conducted to analyse the exact cost of each and every material required for the construction.

The quantity of the materials either more or less, both effects the rate analysis. Hence one should maintain proper quantity of the materials on the site.

2. Labour :

The number of the labours required for the execution of the work should be properly calculated. Selection of the labours should be done according to their categories like skilled, semi-skilled and unskilled and the payment of the labours should also be decided according to their class. About 30 % of the total cost of the work is due to the cost of labours.

3. Item Specification :

The specification of the items indicates the proportion of materials, the process and the method of the work. If superior and high quality material is issued then definitely the cost of the materials will be higher.

4. Tools and Plants :

In every type of construction work different types of tools and plants are required. It is the duty of the estimator to decide whether buying or hiring of tools and plants will be more economical. It is decided on various factors such as duration of work, number of labours, budget of work, type of work etc. If special type of instruments are used in the execution of work then the cost of the construction will be increased.

5. Overhead Charges :

Overhead charges mainly includes expenses of office, labour welfare, material testing, water supply, electrification, depreciation amount etc. This is usually considered as 2-5 % of the total cost of the work.

6. Contractor’s Profit :

Normally 10 % of the overall cost of the work is considered to be contractor’s profit.

7. location of the Work :

If the location of the site is in the remote areas then it will be very difficult to execute the work. Transportation charges increases as labours have to be transported to the location and the cost of labours also varies as the location is far away from their residence.

8. Miscellaneous :

Adverse climatic conditions, Completion period of work are also considered to effect the rate analysis. As the effects caused by this directly reflects into rate analysis.