A unit rate may be defined as the total overall cost of a specific item description for a quantity of one unit in the bill of quantity.
This one unit shall be measured according to the S.M.M. applicable.
The unit rate must include the cost of all labor, material, plant, and main contractor’s subcontractor fee, overheads, and main contractor’s profit.
It follows that the costs of the preliminaries are priced separately from the unit rates in the bills of quantities.
Labor rates include – Wages, extra payments such as allowances, overtime, and holiday payments, traveling and lodging charges, bonuses, etc.
Materials – the basic price of materials must include the cost at delivery to site, percentage allowance for all waste, unloading, storing, removing to position, including hoisting or lowering, etc.
Shrinkage and consolidation are allowed for by a percentage addition, either to the quantities of the materials or the price of the material.
Prime cost – when services are not executed by the builder but by the nominated sub-contractors they are included as prime cost sums. Similarly nominated suppliers’ commodities are covered by P.C. sums.
The builder is allowed profit and attendance on the prime cost sums.
Provisional Sums – when certain building works cannot be accurately measured, a provisional sum is provided in the bill of quantities to meet the charges. Examples are the breaking of an existing foundation, insurance, etc.
It can be divided into two types – Site and General Overheads. Some examples are director’s fee, bank charges, overdraft expenses and loss of interest, office rent, taxes, cost of office staff, cost of storage of materials, deprecation of plant and office equipment, transport and traveling expenses, branch office expenses, insurance, telephone, postage, lighting, etc.
The following basic preliminary items are normally considered for pricing – site supervision, temporary offices, storage sheds, small plants, concreting plants and hoists, cranes and passenger lifts, scaffolding, safety measures, welfare conditions, telephone, temporary roads, temporary fencing, setting out, watching and lighting, notices and fees to local authorities, maintenance of public and private roads, testing materials, temporary water and electricity for works, insurance, etc.