Pricing guide
Unit rate analysis: build a rate you can defend
Published:
Build a construction unit rate from labour, materials, plant and subcontract, with a worked example in invented figures and a review checklist.
Original guide. The worked example uses invented figures to show the arithmetic. They are not market rates or CAIS results.
The idea in one line
Unit rate = labour + materials + plant + subcontract per unit of work, plus the share of overheads and profit you decide to carry in the rate. Everything else is about where each of those numbers comes from.
Labour
Start from the crew: who does the work and how much it produces. Divide the crew’s cost per hour by its output per hour to get the labour cost per unit. Output is usually the most uncertain input, so record its source: your own site records, a published norm or a supervisor’s estimate.
Materials
Take the quantity of each material per unit of work, add waste, laps and breakage, and multiply by the delivered price. Note the date and the source of every price: a rate is only as current as the prices inside it.
Plant and subcontract
Divide the plant cost per hour, with fuel and operator if they are not counted elsewhere, by the output per hour. For subcontracted work use a quotation, and check its exclusions against the BOQ description before copying its price.
A worked example in invented figures
One cubic metre of concrete placed in a slab, priced in illustrative currency units. The figures are invented to show the method; your outputs, prices and percentages will differ and should come from your own evidence.
50.00 + 216.30 + 20.00 = 286.30 | 286.30 × 1.12 = 320.66
| Element | Basis | Cost per m³ |
|---|---|---|
| Labour | Crew cost 400 per hour ÷ output 8 m³ per hour | 50.00 |
| Concrete | 1.03 m³ including 3% waste × 210 per m³ | 216.30 |
| Pump and vibrators | 160 per hour ÷ 8 m³ per hour | 20.00 |
| Direct cost | Sum of the three lines above | 286.30 |
| Overheads and profit | 12% of direct cost, a teaching assumption | 34.36 |
| Unit rate | Direct cost plus overheads and profit | 320.66 |
Review the rate
Before a rate goes into a priced BOQ, ask:
- Does the build-up cover everything the BOQ description includes, and nothing it excludes?
- Is waste applied once, not in both the quantity and the price?
- Are overheads carried in the rate or in a separate item, but not in both?
- Would a second estimator reach a similar output figure from the same information?