Rate build-up for BOQ items: labour, plant, materials, overheads and profit
A rate build-up works out the cost of one unit of billed work and turns it into the rate you enter in the bill. Cost the labour, plant and materials (with waste) and any sub-contract element, then add overheads and profit as the tender allows. Quantity x rate gives the amount.
By BOQ Estimator. Published .
What a bill rate has to cover
A rate in a priced bill is usually taken to be all-in: everything needed to carry out the work as described, unless the preambles say it is covered elsewhere, for example in the preliminaries. The description, the unit and any coverage notes tell you what to include. How to price a BOQ shows where rate building sits in the order of play.
Keep each build-up on its own sheet and let the pricing sheet hold one row per item. The table shows one worked item. The figures are illustrative only and are not market rates; use your own outputs and current quotes.
Outputs and labour constants should come from your own records of similar work where you have them. Material prices come from current quotations, with the validity period noted. Plant comes from hire quotations or your own ownership rates. A published price book can serve as a cross-check, but it reflects other people's costs, so treat it as a reference rather than a source. Put the source and date beside each input, so a reviewer can see why the rate is what it is.
Step by step
How to build a rate
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Read the description and the unit
Note the grade, size, thickness, location and any including clause. The unit sets the basis of the rate: a rate per m³ is not a rate per m².
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Break the work into resources
List the labour, plant, material and sub-contract elements for one unit of work, using gang sizes and outputs from your own records where you have them.
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Cost each resource for one unit
Labour is hours per unit x loaded hourly cost (wages plus on-costs). Plant is hire or ownership cost x hours, with fuel and operator if not in labour. Materials are delivered price x quantity per unit x (1 + waste).
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Bring in quotes per unit
Divide a sub-contract or supply quote by the bill quantity to get a unit cost. Note what the quote excludes and how long it is valid.
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Add overheads and profit as the tender allows
Apply your percentages to direct cost, or keep them as a separate adjustment where the instructions require. Use the same method across the bill.
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Round, then multiply
Round the rate to the number of decimals the bill uses, usually two, then multiply by the quantity, so a reviewer who recalculates from the printed rate gets your amount.
Worked example
One rate built up: blinding concrete per m²
| Element | Basis | Working | Per m² |
|---|---|---|---|
| Materials | 0.075 m³ of concrete per m², 5% waste, at 85.00 per m³ | 0.075 x 1.05 x 85.00 | 6.69 |
| Labour | 0.14 hours per m² at 24.00 loaded per hour | 0.14 x 24.00 | 3.36 |
| Plant | Dumper and poker, share per m² | Allowance | 0.60 |
| Direct cost | Sum of the three above | 6.69 + 3.36 + 0.60 | 10.65 |
| Overheads | 5% of direct cost | 10.65 x 0.05 | 0.53 |
| Profit | 4% of cost plus overheads | 11.18 x 0.04 | 0.45 |
| Rate | Rounded to two decimals | 11.18 + 0.45 | 11.63 |
At 640 m² the amount is 640 x 11.63 = 7,443.20. In Excel, round the final rate cell, for example =ROUND(B2*1.05*1.04,2) with direct cost in B2, so the amount recalculates from the rate as shown.
Watch for
What goes wrong with rate build-ups
- The wrong unit basis. A rate built per m³ is entered against an m² line. Multiply the rate per m³ by the thickness in metres: 120.00 per m³ at 0.15 m is 18.00 per m².
- Waste and including clauses forgotten. Fixings, laps, joints and testing named in the description belong in the rate.
- Overheads counted twice. Site overheads priced in the preliminaries and again inside the rates. See preliminaries.
- Stale quotes. A supplier's price that lapses before the tender is returned, or before award, is your risk.
- Resources checked item by item only. The same gang or machine can appear in many items. Check the total hours against the programme.
- Inputs with no source. A rate that cannot be traced to a quote, a record or a stated assumption is hard to defend after tender and hard to update for the next one.
The tool
How BOQ Estimator helps
BOQ Estimator gets the items, units and quantities into one sheet so you build each rate against the right line. In the Excel workbook the Amount cell of an unpriced row is a Quantity x Rate formula, so entering a rate fills the amount. It does not build rates or hold a rate library; that stays your own work. Try it on the BOQ to Excel converter. Free: 1 file per day, up to 10 pages, no account. Files over 10 pages are converted up to page 10 on the free allowance; a page code converts the whole file, up to 150 pages. See plans and limits.
Related
Related guides
FAQ
Questions estimators ask
What goes into a unit rate in a BOQ?
Typically labour, plant, materials with waste and any sub-contract or supply cost for one unit of work, plus overheads and profit where the tender asks for them in the rate. The description and preambles say what the rate must cover.
How do I allow for waste?
Add a percentage to the material quantity based on your experience of the material and how it is cut and fixed. Check whether the bill's quantities are net, so that waste is yours to allow.
Should overheads and profit sit in the rates or on a separate line?
That depends on the tender instructions. Some require them spread through the rates; others allow a separate adjustment. Follow the instructions and use one method throughout.
Where do site overheads go?
In the preliminaries section, unless the bill says the rates include them. Pricing them in both places counts them twice.
How do I convert a rate between units?
Use the dimension that links them. A rate per m² equals the rate per m³ multiplied by the thickness in metres, so 120.00 per m³ at 0.15 m gives 18.00 per m².
Should I round rates?
Yes, to the decimals the bill uses, usually two. Unrounded rates give amounts that a reviewer cannot reproduce from the printed figures.
Can I price an item from a supplier quote alone?
Yes, if the quote covers everything the item needs. Divide it by the bill quantity, add your handling, fixing and margin, and note the exclusions and the validity period.