Schedule of rates for construction
A schedule of rates in its lesser form in a standard contract can be a list of staff, types of labour and plant hire rates upon which a contractor has listed hourly rates for the purposes of pricing work carried out under cost reimbursable instructed daywork.
However on a much larger scale there is a Schedule of Rates Term Contract. Such a contract is normally used when the nature of work is known but cannot be quantified, or if continuity of programme cannot be determined. In the absence of an estimate, tenderers quote unit rates against a document that is intended to cover all likely activities that might form part of the works. Indicative quantities may or may not be given to tenderers but do not form part of the contract. As the extent of the work is unknown the unit rates include overhead and profit. General preliminaries such as scaffolding, temporary power, supervision and temporary accommodation will also have its own rates. On projects longer than say 18 months there might be escalation provisions based on annual percentage increases based on a stipulated indices.
 Pros and cons
The advantages of Schedule of Rates Term Contracts are:
- Variations are easy to estimate and normally cheaper than on fixed price traditional contracts.
- The client can stop and start work at a pace that might be determined by cash flow or funding.
- A large pool of contractors can be asked to tender as the process is inexpensive and quick.
- It is infinitely flexible in relation to scope and contractual commitment.
- As a fully detailed design is not required the client can obtain tenders at the early stages of a project and begin construction activity before completion of the design. So to this extent it is 'fast track'.
The disadvantages are:
- Additional resources are required to measure work and certifying payments.
- The client does not have a final price when committing to starting work.
- It is difficult for contractors to plan long-term resources and so might mean changes to personnel with loss of continuity.
- Contractors may be tempted to load front end costs in case later work does not materialise.
- There is no real incentive for contractors to treat such work with any sense of urgency and its best staff will be placed on the projects where the contractor is carrying more risk.
 Tender documents might have the following headings:
 General conditions, which will include clauses defining:
- Methods of measurement.
- Qualification of star and proportional rates.
- Site preliminaries.
- Treatment of overtime rates.
- Codes of practice.
- Inclusion of protection, waste, transportation and health and safety compliance.
- Approved list of suppliers.
- What is included in rates,such as all subsistence and travel expenses.
- Client direct supplies and directly employed tradesmen.
- Testing and commissioning.
- Curved work premium.
- Definitions as used in the document.
 Building work
- Geotechnical investigation.
- Concrete work.
- Brick and blockwork and masonry.
- Roofing and tanking.
- Scaffolding and staging.
- Carpentry and joinery.
- Steel and metalwork.
- Fire shutters.
- Plasterwork, floor, wall, ceiling finishes.
- Plumbing and drainage including cable ducts.
- Fixtures, fittings and soft furnishings.
- Demountable partitions, dry walling and cubicles.
- External works.
- Plant and equipment hire.
 Mechanical and electrical, lifts and escalators
- Electrical installation.
- High voltage switchgear.
- Low voltage switchgear.
- Standby generators.
- Air conditioning and ventilation.
- Building Management System (BMS) controls.
- Fire services.
- Town gas.
- Catering equipment.
- Intruder alarm.
- Public address system.
- External lighting and electric gates.
- Cleaning cradle system.
Each of these headings will cover numerous elements which then have to be broken down into pricing units. For instance brick, blockwork and masonry might include a section called natural marble or granite slabs/tiles of any shape, size pattern or colour :
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