5. Rate Analysis, Civil Engineering 5th Sem Notes CE 5002

 

5. Rate Analysis

Rate analysis is a fundamental aspect of construction cost estimation. It is the process of calculating the cost involved in executing a particular item of work, including labor, materials, overheads, transportation, and contractor's profit. By conducting rate analysis, the estimator can determine the unit rate for various construction tasks.

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5.1 Rate Analysis

5.1.1 Definition

Rate analysis involves calculating the cost of a particular construction work by considering various factors, including the cost of materials, labor, overheads, transportation, and machinery. The analysis is done to determine the unit cost of a work item (e.g., cubic meter of concrete, square meter of brickwork), which is then used for estimating and budgeting the total cost of the project.

5.1.2 Purpose

The primary purpose of rate analysis is to:

• Determine unit cost: It helps in identifying the cost per unit of a work item, such as per square meter of flooring or per cubic meter of excavation.
• Create accurate cost estimates: It aids in making reliable estimates for materials, labor, and other resources needed for a project.
• Control costs: By conducting rate analysis, it becomes easier to track and control the costs of construction, ensuring that the project stays within budget.
• Tender preparation: Contractors and estimators use rate analysis to prepare tenders by calculating the cost of individual work items.

5.1.3 Importance

• Cost Planning and Budgeting: Rate analysis provides an accurate method for planning the total cost of the project and helps in establishing a realistic budget.
• Resource Allocation: It aids in allocating resources efficiently by determining how much material, labor, and equipment is required for each task.
• Quality Control: Rate analysis ensures that the work is completed at the correct cost, without compromising on the quality of materials or workmanship.
• Comparison of Costs: It allows for comparison with similar projects or industry standards to ensure that the project is cost-effective.

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5.2 Lead (Standard and Extra), Lift, Overhead Charges, Water Charges, and Contractors' Profit

5.2.1 Lead (Standard and Extra)

• Lead refers to the distance that materials must be transported from the source (quarry, supplier, etc.) to the construction site.
  • Standard Lead: This is the standard distance considered in the rate analysis for transporting materials under normal circumstances.
  • Extra Lead: This is any additional distance beyond the standard lead. The extra cost is calculated by considering the additional effort and transportation costs.

5.2.2 Lift

• Lift refers to the vertical distance that materials or waste must be lifted or hoisted during the construction process.
  • If materials need to be lifted to different levels on the building site (e.g., for filling, placing, or moving materials), this vertical transportation will be accounted for in the rate analysis.

5.2.3 Overhead Charges

• Overhead charges include all costs that are necessary for the functioning of the construction business but are not directly attributable to specific work items. This includes administrative costs, site supervision, office expenses, utilities, and others.

5.2.4 Water Charges

• Water charges are included for construction activities like mixing concrete, curing, and cleaning purposes. The cost of water will depend on the source and amount required for the project.

5.2.5 Contractor's Profit

• Contractor’s profit is a percentage added to the overall rate analysis. It represents the contractor's earnings after covering the direct and indirect costs of construction. Typically, a contractor’s profit is added at the end of the rate analysis process and is usually around 10% to 20% of the total cost.

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5.3 Procedure for Rate Analysis

The procedure for rate analysis involves several systematic steps to determine the cost of a work item.

1. Identification of Work Item:

   • Identify the specific work item to be analyzed, such as excavation, plastering, brickwork, etc.

2. Gathering Required Data:

   • Material Cost: Collect data for the materials required for the work item (e.g., cement, sand, bricks, etc.), including rates from suppliers.
   • Labor Cost: Determine the labor required for the task and their daily wages (e.g., masons, laborers).
   • Machinery Cost: If machinery is required, include the hire rates for equipment like mixers, cranes, etc.
   • Overhead Charges: Include overheads like supervision, administrative charges, and other indirect costs.

3. Calculation of Quantities:

   • Calculate the required quantities of materials and labor for the work item based on drawings and specifications.

4. Add Transportation Costs:

   • Consider the lead and lift for transporting materials to the site and their associated costs.

5. Include Miscellaneous Costs:

   • Include water charges, incidental charges, etc.

6. Calculate Total Cost:

   • Sum up all the individual costs for materials, labor, overheads, transportation, and other charges.

7. Determine Unit Rate:

   • Divide the total cost by the unit of measurement (e.g., per cubic meter, per square meter, etc.) to get the unit rate for the work item.

8. Add Contractor’s Profit:

   • Add a percentage of profit (typically around 10% to 20%) to the calculated unit rate to finalize the rate.

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5.4 Task Work - Definition and Types

5.4.1 Definition

Task work refers to the payment method where the contractor or laborer is paid based on completing a specific task or unit of work, rather than on time-based wages. In task work, the quantity of work done is predetermined, and the payment is made according to the completion of the task.

5.4.2 Types of Task Work

1. Fixed Rate Task Work: The contractor or laborer is paid a fixed price for completing a defined work task, regardless of how long it takes.

   • Example: A mason is paid a fixed amount for bricklaying 1000 bricks.

2. Time-based Task Work: The contractor or laborer is paid according to the amount of time taken to complete a certain task, with a maximum time limit set for completion.

   • Example: A worker is paid for plastering per square meter of wall, but the payment is based on a specific timeframe for completion.

5.4.3 Task Work for Different Skilled Labor

Different types of skilled labor will have different task rates based on the complexity of the task and the required expertise. For example:

• Mason: Paid based on the number of bricks laid or cubic meters of plaster applied.
• Carpenter: Paid based on the number of doors or windows installed.
• Electrician: Paid based on the number of electrical points installed or wiring completed.

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5.5 Categories of Labor, Daily Wages, Types, and Number of Laborers for Different Items of Work

5.5.1 Categories of Labor

Laborers are categorized based on the type of work they perform:

1. Skilled Labor: These are workers with specialized skills such as masons, carpenters, electricians, and plumbers.
2. Semi-skilled Labor: Workers who have some skill but do not require the same level of expertise as skilled labor, such as helpers or machine operators.
3. Unskilled Labor: Workers with minimal skills, typically involved in basic tasks such as loading/unloading materials or mixing concrete.

5.5.2 Daily Wages

The daily wage for each type of labor varies based on the region, skill level, and industry standards. For instance:

• Mason: A skilled mason may earn a higher daily wage than an unskilled laborer due to the level of expertise required.
• Laborer: The wage for general laborers may be calculated based on the number of hours or tasks performed, with rates differing by location and task complexity.

5.5.3 Number of Laborers for Different Items of Work

The number of laborers required for different items of work depends on the scope of the task and the expected completion time. For example:

• For brickwork, a certain number of masons and laborers are required to meet a daily target.
• For excavation work, the number of laborers or machine operators (e.g., JCB operators) is determined based on the volume of earth to be moved.

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5.6 Transportation Charges of Materials

5.6.1 Lead and Lift

• Lead: The horizontal distance materials are transported.
• Lift: The vertical distance that materials must be lifted or elevated. Transportation charges depend on both lead and lift. For example, transporting materials over longer distances or at higher lifts will incur higher costs.

5.6.2 Hire Charges of Machinery and Equipment

For heavy machinery like cranes, trucks, or excavators, the hire charges depend on the equipment's size, capacity, and the duration of usage. These costs need to be factored into rate analysis when machinery is required for a task.

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5.7 Preparing Rate Analysis for Different Items of Work

5.7.1 Rate Analysis for Building Work:

• For building works such as brickwork, plastering, concrete work, etc., rate analysis includes:
  1. Material cost (bricks, cement, sand, etc.).
  2. Labor cost (masons, laborers).
  3. Equipment and transportation cost (mixers, cranes).
  4. Overheads, water charges, and contractor’s profit.

5.7.2 Rate Analysis for Road Work:

• For road construction, rate analysis involves:
  1. Earthwork (excavation, filling).
  2. Pavement construction (material like bitumen, aggregates).
  3. Machinery and labor costs for grading, rolling, and surfacing.
  4. Transportation of materials, fuel charges for equipment.
  5. Overhead charges, water, and contractor's profit.