What are the steps?
The method below follows the usual unit rate approach. Do it for the items that carry most of the value.
- 1Read the item's description, the specification and the method of measurement.
- 2Price the materials for one unit. Include transport, storage and waste.
- 3Price the labour. Divide an all-in hourly cost by the output you really expect.
- 4Price the plant. Include fuel, operator and running costs, plus the plant's fixed costs.
- 5Add any subcontractor's price for that item.
- 6Add site and head office overheads, then risk and profit.
What does a worked example look like?
This is one square metre of blockwork. All the figures are invented to show the arithmetic. Do not use them as rates.
| Line | How it is found | Amount |
|---|---|---|
| Materials | Blocks and mortar, with transport and waste | 12.00 |
| Labour | Mason and helper cost ÷ daily output | 6.00 |
| Plant | Mixer and scaffold share | 1.00 |
| Direct cost | 12.00 + 6.00 + 1.00 | 19.00 |
| Overheads at 15% | 19.00 × 0.15 | 2.85 |
| Risk and profit at 10% | 21.85 × 0.10 | 2.19 |
| Rate per square metre | 19.00 + 2.85 + 2.19 | 24.04 |
Where do preliminaries go?
Preliminaries are site and project costs shared across many items, such as site offices, supervision and insurance. If the BOQ has a section for them, price them there. Item rates then carry only the balance.
Do not count the same cost twice. If you leave preliminaries blank, check what the tender says about items you do not price.
What percentages should you use?
Use your own. Your overheads come from your accounts, and your profit comes from your decision on this bid. Template percentages may not match your firm or your market. See how to calculate markup for how markup differs from margin.
Keep your rate analysis. A buyer may ask for it if your price looks low. See abnormally low bids.
How can Bidligence help?
Bidligence prices a tender's BOQ line by line, with rates built from cited market prices. Where a contract you won or your own rate library covers a line, that rate comes first. Every rate is an estimate and stays editable, so check each one against your own costs.
Questions
- Is rate analysis the same as a rate build-up?
- They usually mean the same work. Both break one item's rate into its costs and additions.
- Do I need one for every line?
- Not always. Build up the items that carry the most value or risk. Use checked past rates for smaller items.
- Can I use a published schedule of rates?
- Use it as a check, not as your answer. It may not match your costs, your site or the tender's specification.
Sources
Rules and portals change. Check the tender’s own documents and the official source before you rely on any of this.