Rate analysis, also known as analysis of rates, is the process of determining the rate of a particular item. To determine the rate of an item, various factors affecting its cost are studied carefully. These factors include the specifications of the work, the quality, proportion and constructional operation method of the materials required, the quantity of materials and their costs, the cost of labor and their wages, the location of the site of work and the distances from the source, conveyance charges, overhead and establishment charges, and profit.
One important factor that affects the rate of an item is the cost of materials. When determining the cost of materials, it is important to take into account their source and their cost at the site of construction. This includes the cost of transporting the materials, local taxes, and other charges.
To arrive at an accurate rate, all of these factors must be considered and calculated accordingly. The final rate of an item should be based on a thorough analysis of all the relevant factors. This will ensure that the rate is fair and reasonable, and that it covers all the costs involved in the project.
Analysis of rates is an important process in the construction industry, as it helps to determine the actual cost per unit of the items, the most economical use of materials and processes, and the cost of extra items not included in the contract bond. It also helps to revise the schedule of rates due to changes in material and labor costs or techniques.
The cost of labor is a crucial component of analysis of rates. Labor can be classified as skilled – first class, skilled – second class, or unskilled. The standard schedule of rates can be used to determine the labor charges. 30% of the skilled labor provided in the data may be taken as first class, while the remaining 70% is considered as second class.
The rates of materials for government works are fixed by the superintendent engineer for his circle each year and approved by the Board of Chief Engineers. These rates are incorporated into the standard schedule of rates.
The distance between the source of material and construction site is called “lead,” which is expected in kilometers. The cost of conveyance of material depends on the lead. The lead statement gives the total cost of materials per unit item, which includes the first cost, conveyance loading, unloading, stacking charges, and more. The rate shown in the lead statement is for metalled roads and includes loading and staking charges. The environmental lead on metalled roads is determined by multiplying the lead by a factor. For metal tracks, the factor is 1.0, for cartze tracks, the factor is 1.1, and for sandy tracks, the factor is 1.4.