Calculator · 3 minutes

What the rate is made of, before the contract forgets

A unit rate is six or seven figures collapsed into one. The contract keeps the one and throws away the rest, which is why an actual cost has nothing to be compared against. This keeps them.

There is no default labour rate here, no assumed waste allowance and no assumed overhead percentage. Those are your costs, not the industry's, and a number supplied on your behalf would be the one figure on the page you could not check. The starting values are round and obviously illustrative; replace them.

Read the full method

The line, built up

Every figure here is your cost, not an industry's. Nothing is pre-filled with a number we would have to defend on your behalf.

Currency

A label on your own figures. Nothing here converts between them.

The line

Unit of measurement

How the line is measured — m³, m², tonne, number. It labels the rate; it changes no arithmetic.

Quantity in the BOQ

m³

The quantity you were given to price, before any remeasure.

Direct cost, per unit

Labour

AED

Wages, plus whatever you carry on top of them, for one unit of the work.

Materials

AED

Delivered cost of the material in one unit, before waste.

Waste

Added to materials only. Labour is not wasted twice when a block is broken; it is paid once and the block is bought again.

Plant and equipment

AED

Hire, fuel and operator apportioned to one unit.

Subcontract

AED

Work inside this line you have priced out to somebody else.

Recovery

Site running cost

Preliminaries recovered through this line, as a percentage of the direct cost above.

Head office

The share of the office this line is asked to carry, as a percentage of direct cost.

Profit

The percentage. What it is a percentage of is the control below, and the two are not the same number.

Applied how

Added to cost, or taken out of the rate. Both are printed either way, so the one you did not choose is a conversion rather than a guess.

What was actually executed

Quantity executed or remeasured

m³

Leave at zero while you are still pricing. Fill it in when you are reviewing a line that has been built.

Rate per m³

AED 233.13

Value of the lineAED 233,130

The number that goes into the tender. Everything that produced it is below, and the contract will keep none of it.

The same profit, said two ways

On cost: 12%
On the rate: 10.7%

12% added to cost is 10.7% of the rate. They are never the same number, and the second is always the smaller. An estimator who priced the first and reported the second is short by the difference on every line he wrote.

Direct cost

AED 181.00

Labour, materials with waste, plant and subcontract. The part of the rate that has a delivery note behind it.

Recovery

AED 27.15

Site running cost and head office, both as a percentage of the direct cost above.

Full cost

AED 208.15

What the unit costs you before a single unit of profit. The rate has to clear this.

Profit per unit

AED 24.98

The rate less the full cost. Multiply by the quantity and it is the whole reason for the line.

How far it can move before the line stops paying

The rate is in the contract and cannot move. So 12% is not only your markup — it is exactly the cost overrun that takes this line to zero. Price at ten per cent on cost and the line breaks even when the work comes in ten per cent over, which on a job that is measured monthly is not a remote event.

Materials 10% up: margin becomes 5.3%
Labour 10% up: margin becomes 9%

The quantity that did not turn up

Enter an executed quantity above and this works out what the shortfall costs — including the head-office recovery that quietly went missing with it.

Every line of the arithmetic

Nothing behind a button. If a line does not match how you price, the field above it moves.

Materials with waste (AED): 120.00 + 6.00 = 126.00
Direct cost per unit (AED): 40.00 + 126.00 + 15.00 + 0.00 = 181.00
Recovery (AED): 14.48 + 12.67 = 27.15
Full cost per unit (AED): 181.00 + 27.15 = 208.15
Rate (AED): 208.15 × (1 + 12%) = 233.13
Profit per unit (AED): 233.13 − 208.15 = 24.98
Margin on the rate, and markup on cost: 24.98 ÷ 233.13 = 10.7% · 24.98 ÷ 208.15 = 12%
Value of the line (AED): 233.13 × 1,000 = 233,130

One line, priced the way you price it. It does not know about the preliminaries you carry outside the rates, the cash you are financing between certificate and payment, or the escalation clause that may or may not be in your contract. What it does is keep the six figures the contract is about to throw away, so that when the actual cost lands you have something to stand it beside.

The build-up is the easy half

Keeping it is the hard half. A rate built in a spreadsheet and typed into the contract as one number leaves nothing to compare the actual cost against — which is why most contractors find out a line lost money at the final account. Send us a page of your BOQ and we will show you what a system has to hold for the comparison to exist.

Send us these figures How we work with contractors The BOQ in full

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Rate Build-Up Calculator

A rate you can defend is a rate you kept the working for

The build-up is arithmetic. Holding it against the cost that actually lands, line by line, for the life of the job, is a system. Send us a page of your BOQ and we will tell you what yours would have to store.

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