Last edited 14 Dec 2018

Schedule of rates for construction

Contents

[edit] Introduction

In its most simple form, a schedule of rates can be a list in a contract setting out the staff, labour and plant hire rates the contractor will use for pricing cost reimbursable instructed daywork.

However, on a much larger scale, a 'schedule of rates term contract', 'term contract' or 'measured term contract' may be used when the nature of work required is known but it 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.

As the extent of the work is unknown, the unit rates include overheads and profit. General preliminaries such as scaffolding, temporary power, supervision and temporary accommodation will also have rates. On projects longer than around 18 months there might be escalation provisions based on annual percentage increases.

[edit] Pros and cons

The advantages of schedule of rates term contracts include:

The disadvantages include:

  • Additional resources are required to measure work and certify 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 front-load 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.

The tender documents will be a substantial package looking like a bill of quantities with numerous options and discount opportunities based on quantity.

[edit] Tender documents

Tender documents might have the following headings:

[edit] General conditions

[edit] Building work

[edit] Mechanical and electrical, lifts and escalators

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 :

Schedule of rates.jpg

[edit] Benchmark rates

A number of indices are available providing benchmark rates that can be used for estimating purposes, such as the BCIS Schedule of Rates, the PSA Schedule of Rates, and so on.

[edit] Related articles on Designing Buildings Wiki

Comments

Here is an example of a schedule of rates for UK building, construction and maintenance works

http://www.constructionrates.co.uk/Schedule_of_Rates/Construction_National_Schedule_Rates_Measurement_NRSM_Dynamic.html