What is Rate analysis?
Rate analysis is working out the cost of one unit of a work item from materials, labour, equipment, overheads and profit, to arrive at a rate to quote.
What is rate analysis?
Rate analysis breaks down the cost of one unit of an item, such as a cubic metre of concrete or a square metre of plaster, into its parts. Adding them up gives the rate for that item.
Buyers use rate analysis to build their estimates and to fix rates for items not in the schedule of rates. Bidders use it to check whether a tender is worth pricing and what rate they can quote.
What it contains
A typical rate analysis covers:
- Materials, with quantities per unit and an allowance for wastage
- Labour, by trade and time per unit
- Equipment, machinery and tools, including hire and fuel
- Carriage, water, electricity and other site costs
- Overheads and profit
How it is used in evaluation
Where a bid rate is unusually high or low, or for extra items during the contract, the buyer may ask the contractor to submit a rate analysis to justify the price.
Departments such as CPWD publish standard analyses of rates, which they use as a reference. Your own analysis should reflect your actual costs and the tender’s conditions.
Common questions
Common questions about Rate analysis in government tenders.
Usually not, unless the tender asks for it. Buyers more often request it later, for example to justify an unusual rate or price an extra item.
A schedule of rates is a published list of standard rates. Rate analysis is the working that shows how a rate is built up from its cost elements.
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