What Is Unit Rate Build-up (Rate Analysis)?
Rate analysis breaks a unit rate down into materials, labour, plant, indirects and profit — the basis of any price you can defend.
What a rate is made of
Every rate is built from four layers: materials at their quantity per unit including waste; labour computed from the crew’s daily output; plant at its daily hire spread over its output; then the loading of indirect costs and the profit margin. Anyone who prices from a figure a colleague mentioned loses the ability to justify or negotiate a single item.
The practical steps
Start from one unit of the item: how many cubic metres of concrete does a square metre of slab need? How many workers and how many days per hundred metres of plaster? Multiply by current market prices, add them up, then add the indirect percentage and the profit. The result is a rate where you know where every riyal came from.
Why it matters at variations
When a new item appears with no equivalent in the contract, analysis is the only acceptable way to price it: you hand the consultant a sheet setting out materials, labour and plant at supported prices. Whoever keeps a library of ready analyses negotiates variations from a position of strength.
Building an in-house rate library
The best reference for your prices is your own past projects: record the actual outputs achieved and the prices actually paid after every job. A maintained library of analyses reduces pricing a new tender to updating material prices alone, and turns your engineers’ experience into an asset the company keeps.
Worked example
Analysis of one square metre of internal plaster: cement and sand mortar at SAR 11; labour at an output of 18 m² per worker per day on a daily wage of SAR 150 gives SAR 8.3; scaffolding and tools SAR 1.5 — a direct cost of SAR 20.8. Loading 12% indirects and 10% profit brings the rate to about SAR 25.6 per square metre.
FAQ
What is the usual indirect cost percentage?
In practice between 8% and 18% of direct cost depending on the size and duration of the project and the remoteness of the site. The most accurate approach is to compute it from your own site budget rather than carry it over from another project.
Must I analyse every item in a 400-item bill?
No — apply the rule of concentration: the largest 20% of items by value usually make up most of the tender and deserve full analysis; the rest can be priced from a rate library or a market index with a quick review.
Where do I get current material prices?
From actual supplier quotations for your project’s city, not from national averages. The Etimadco construction material price index shows averages and ranges per city as a baseline before you request quotations.
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