Adama Science and Technology University

School of Civil and Architectural Engineering

Civil Engineering Department
Quantity Surveying, specification, and Contract
(CEN-4207)
Chapter 4- Project cost estimation

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Content
Chapter 4- Project cost estimation
4.1. Introduction
4.2. Types of Costing or Estimation
4.3 Cost Components of a construction project
4.4. Unit Rate Analysis
4.5. Project Valuation

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PROJECT COST ESTIMATION

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 PROJECT COST ESTIMATION
Introduction
 Estimation is the scientific way of working out the approximate cost of an engineering

project before execution of the work.

 An estimate of the cost of a construction job is the probable cost of that job as computed

from plans and specifications.

 Project Cost includes:
 Preliminary investigation (project appraisal costs)
 Design and supervision (consultancy cost )
 Construction works (contractor’s cost )
 Land owning cost, and
 Monitoring costs

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 PROJECT COST ESTIMATION
Introduction Cont.
 An estimate serves a number of different functions, depending on the stage of the

project, as shown below :

 Feasibility: Initially feasibility of the project need to be determined Feasibility
Estimate (Conceptual Estimate).
 Schematic Design (Conceptual design): Sketches are prepared.

Major elements are defined. Use a preliminary method to estimate cost. Cost of each
element is established (cost plan).
 Design Development: Progressively the scope of the project is defined A
series of preliminary estimates are done during this phase to assure adherence to
cost plan.

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 PROJECT COST ESTIMATION
Introduction Cont.

Contract Document: Finalize drawings & Specifications:

Designer’s estimate: to anticipate and check contractor’s bid prices.

Bidding Phase: Contractors prepare detailed estimate to submit bids.

Construction Phase: Estimates are prepared for cost Control and for change

order evaluations.

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 PROJECT COST ESTIMATION
Introduction Cont.

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 PROJECT COST ESTIMATION
Introduction Cont.
Preliminary Estimates and Cost Planning
 The Conceptual Estimate found during feasibility becomes the initial project

budget
 Subsequent design development should remain within the limit of this budget

 For that purpose, several preliminary estimates are performed as more details

become available through the design.

 Preliminary estimates assign cost to various assemblies (elements) of the project

(Cost Plan). {substructure, superstructure, interior partitions & doors, exterior

cladding ..etc.}
 Preliminary estimates allow for Value Analysis – Compare value of an element

with its cost, Consider alternatives, Select desired option.

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 PROJECT COST ESTIMATION
Purpose of cost estimation
Over all the main purpose of cost estimation can be summarized as follow:
 know the volume of work in reference to the fund available

 Determine actual cost per unit of item

 Identifying engineering estimate of the work for bidding purpose

 Work out economical use of materials, labor and equipments

 In cases of variations to determine the extra cost to be incurred

 When there is escalation, to work out the escalation in cost

 For a good estimate the, actual cost of the proposed work after completion

should not differ by more than 5 to 10 % from its approximate cost estimate,
provided there are no unusual, unforeseen circumstances.

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 PROJECT COST ESTIMATION
Information required for cost estimation
 The following information is required to define cost per unit of work

 Correct information of the market price of the materials at the time of need to be used as a
basic price
 Correct information of the rates of various categories of skilled and unskilled laborers as wage
rates to be used for daily work rate
 Output of laborers per day for various types of items (productivity)
 Correct information of the rates of various categories of equipments and tools as rental rates to
be used for major items of rates
 Up-to-date knowledge of the construction methods.

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 PROJECT COST ESTIMATION
Knowledge and managerial skills for cost estimation
 The following knowledge, managerial talents, and degree of construction

experience make a good estimator.

 Ability to read and understand contract documents, with special skills in
reading construction drawings for all specialties and related specifications.
 Ability to accurately take off the quantities of construction work for which
he or she is preparing the detail estimate.
 Ability to visualize the future building from drawings, which usually
requires some years of construction site experience.
 Knowledge of arithmetic, basic geometry, and statistics.

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 PROJECT COST ESTIMATION
Knowledge and managerial skills for cost
estimation
 The following knowledge, managerial talents, and degree of construction

experience make a good estimator.

 Knowledge of building construction methods.
 Knowledge of labor productivity, crew composition, and impacts of
various forecasted site conditions on crew output.
 Possession of office managerial skills in organizing project-related
cost information.
 Ability to work under pressure and to meet all bid requirements
and deadlines.
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 PROJECT COST ESTIMATION
Factors Affecting Cost Estimation
 Factors which affect the cost estimation are summarized as follow:

 Type of the project

 Construction scheduling
 Bidding environment
 Quality and availability of material and labor (given in specification)
 Construction facilities /tools and method of construction
 Location of the site: Transportation charges
 Land charges (lease)
 Nature of subsurface condition

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 PROJECT COST ESTIMATION
Types of Costing or Estimation
 Estimation can be broadly classified as preliminary (approximate) and detailed.

Preliminary /approximate costing

 This type of cost estimation is required to know the financial position of the

client before costly detailed designs are carried out.

 Such estimates are based on practical knowledge and cost of similar previous

works. Examples of approximate cost estimations are as follows:

A. Cost per functional unit

 Hospital =cost per bed, Dormitory = cost per student, Cinema or theatre = cost

per seat, residential buildings = cost per area, road works = cost per kilometer
length, culverts or bridges = cost per meter span.
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PROJECT COST ESTIMATION AND VALUATION
Types of Costing or Estimation
Preliminary /approximate costing

B. Plinth area method – cost per m2

 Based on Plinth Area- roof area or external dimensions at the plinth level (Courtyard

& open area shall not be included)

 The rate per meter square is deduced from the cost of similar building projects in the

locality.

C. Cubical Content method – cost per m3

 Based on cubical contents of various buildings, i.e. Plinth area of the building x

height x cubic content rate.

 Height should be taken from the top of flat roof (or halfway of the sloped roof) to the

top of concrete in foundation.

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EXAMPLE 1
Prepare a Rough-cost Estimate based on unit costs of per unit plinth area basis of a four storied office building having a
carpet area of 2000 sq.m. for obtaining the administrative approval of the Government. It may be assumed that 30 % of
the built up area will be taken by the corridors, verandas, lavatories, staircase, etc. and 10 % of built up area will be
occupied by walls. The following data is given:
Plinth Area Rate = birr: 5500.00 / sq. m.

Extra for special architectural treatment = 0.5 % of the building cost.

Extra for water supply and sanitary installations = 6 % of the building cost.

Extra for internal installations = 14 % of the building cost

Extra for electric services = 12.5 % of building cost

Extra for sui gas services = 6 % of building cost

Extra due to deep foundations at site = 1.0 % of building cost

Contingencies = 2.5 % overall

Supervision charges = 8 % overall

Design charges = 2.5 % overall

 PROJECT COST ESTIMATION
Types of Costing or Estimation
Detailed Cost Estimate (Based on Item Rate)
 This is the most reliable and accurate type of estimate.

 The quantities of items are carefully prepared from the drawings and the total

cost worked out from up to date market rates.

 A detail cost estimate thus requires:

 Quantity surveying and

 Analysis of the different rates for the quantities prepared.

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation
 Efficient construction cost estimates shall address properly the required

project quality, time for completion of works

 In deciding to participate in the intended project tender, the contractor

shall carefully assess the impact of the following key factors:

 Type of project
 Method of tendering
 Type of construction contract
 Number and progress of contracts already at hand
 Resource availability i.e. skilled manpower, plants and machineries
 Financial position

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.
 Once decision is made to participate in the intended tender, the contractor shall give

due attention to the following major items listed below

 General and particular conditions of contract contained in the bidding documents
 Technical specifications
 Drawings
 Estimated bill of quantities
 Method of measurement
 Supporting documents such as information regarding geological formations and
hydrological data
 Site visits &Construction method statements

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

A. General and particular conditions of contract

 Proper understanding of the general and particular conditions of contract is

mainly important for construction cost estimation in identifying the

responsibilities and cost implications on the project
 Amount and type of performance security
 Amount of advance payment and type of advance repayment guarantee
 Time for completion of the whole project
 Limit of liquidated damages
 Retention money
 Claims and disputes settlement

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

A. General and particular conditions of contract

 Price escalation
 Tax exemptions
 Insurance of the works
 Owner’s risks
 Applicable laws

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost
Estimation cont.

B. Technical Specification
 Technical specifications specify the following crucial information to the

contractor and it is the sole basis both for the construction methods to be
adapted and the construction cost of the project.
 Quality of materials
 Quality of machineries and plants
 Quality of workmanship
 Erection and installation methods
 Test and inspection requirements and methods

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 PROJECT COST ESTIMATION

Fundamental approach to construction cost Estimation cont.

B. Technical Specification
 Technical specifications basically have restricted applications, which usually

define specific work items. Therefore, for a better understanding and cost
estimation of the project, the contractor must check the given specifications
for:
 Technical accuracy and adequacy
 Define and clear requirements
 Fair and equitable requirements
 Formats which can be easily used during bidding and construction
 Legal enforceability
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PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation
C. Drawings
 The contractor mainly understands from the drawings what type of construction

methods to be adapted during cost estimation as well as construction of the

project.
 Some of the construction methods which need to be addressed during cost

estimation of this building project are:

 Concrete production

 Concrete transportation and placement

 Transportation of construction materials to different floors

 Methods and type of scaffolding

 Types and methods of shuttering works

 Erection and installation of glazing works

 Temporary access for manpower working at different floors

 Skilled manpower requirement

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

D. Estimated Bill Quantities

 Estimated quantities of work are also the basis to determine the type and

number of resources to be deployed during construction of the project.

 Moreover, construction methods shall be selected in such a way the given

quantity of works can be executed during the completion time of the project.

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 PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

D. Estimated Bill Quantities

 Based on the estimated quantity of works, the contractor shall decide the

method of construction to be adapted during executing of the project such as:

 Type and size of crushing plants
 Type and size of mechanical mixers or batching plants
 Type, size and number of machineries such as dozers, graders, loaders,
rollers, dump trucks and so on.
 Skill and number of manpower requirement
 Type and quantity of construction materials
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 PROJECT COST ESTIMATION
Fundamental approach to construction cost
Estimation cont.
E. Supporting Documents
 Supporting documents such as geological formations, hydrological data and

other technical reports like socio-economic studies are usually provided by

the owner to contractors for their own interpretations for heavy construction
projects.
 Therefore, the contractor shall have the technical ability and experience in

interpreting the technical data provided to determine construction methods to

be adapted which directly affects the construction cost estimates.

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PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

F. Site Visit

i. Location of the site:

 It helps to determine the mobilization and demobilization costs.

 It also helps to determine the transportation cost of materials from main material

suppliers.
 Availability and expected wages of daily labors can be fairly estimated based on the

location of the site.

 Site location also helps to determine the type of camp facilities required to be constructed

such as project offices, living areas, food accommodations and so on.

 Having proper understanding of site location and local weather condition helps the

contractor to determine salaries and benefits of staffs, skilled manpower and daily
laborers.
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PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation
cont.
F. Site Visit

ii. Location of local construction material

 The contractor shall identify the location and quality of local construction materials such as

quarry area for gravel production, sand, selected material, water as well as sub base and base
course materials in the case of road projects.
 Moreover, the contractor shall have the general understanding of the site layout for different

plants such as batching and crushing plants.

iii. Access Roads

 Site access roads to the main works, quarry areas, water supply, sand, and the like shall be

identified which incurs additional construction and maintenance costs. These costs are
extremely high, incase of heavy construction sites such as road works, hydropower projects
and so on.
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PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

F. Site Visit

iv. Water and power supply

v. Communication facilities

vi. Environmental protection

vii. Existing facilities

F. Method of measurement
 Contractors shall thoroughly understand the method of measurement
incorporated within the bidding documents before starting any cost breakdown
calculations.
 BaTCoDA Technical specification and method of measurement
 ERA standard specifications
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
PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

G. Construction Method Statements

 Construction method statements give the clear picture of each project activity

execution during the construction phase of the project.

 The required quality of works as per the specifications, estimated quantity of

works, safety standards, as well as time for completion are the sole basis in
determining the construction method statements of a project.
project

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PROJECT COST ESTIMATION
Fundamental approach to construction cost Estimation cont.

G. Construction Method Statements

 Construction method statements shall clearly indicate the following crucial

construction issues:
 Skill and number of manpower required
 Type and specification of equipments required
 Quantity and quality of materials required
 Proposed working crews
 Estimated crew productivity
 Estimated duration for completion
 Expected defects and remedial measures 33
PROJECT COST ESTIMATION
Basic Cost Components of a construction project
 Basically the cost of any construction project comprises

 Direct costs, which include the direct cost of materials, labor as well
as equipments and
 Indirect costs, which include but not limited to head office and site
overhead costs.

A. Direct Construction Cost

 Direct construction costs are all costs that can be specifically booked with an

activity in a project.
 Direct costs can be budgeted, monitored and controlled far more effectively

than the indirect costs.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

A. Direct Construction Cost

 The direct costs mainly include material, labor, equipment and subcontract costs as described

below.
 Direct material costs – These costs referring to the cost of materials, consumables and
components used for executing an activity including the allowances for wastages.
 Direct labor costs – All costs related to the workers working on a specific activity such as
carpenters, masons, erectors, painters, plumbers and so on.
 Direct equipment costs – These costs referring to the costs of machineries and plants used in
executing a specific activity.
 Subcontract costs – In case some specific activities are subcontracted, the subcontract price
will be considered as the direct cost of the activities to be executed by the subcontractor.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

B. Indirect Construction Cost

 Indirect construction costs are all costs, which can not be directly booked under a

specific activity in a construction project but required to keep the whole project
operational.
 These costs are also called overhead costs, which mainly include the head office and

site overhead costs.

i. Head office overhead costs

 Head office overhead costs are all costs required to run the whole operation of the

construction company, which usually administers different projects at a time.

 These costs are not usually associated with specific project but rather shared

proportionally by all projects under the company.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

B. Indirect Construction Cost

i. Head office overhead costs

 Some of the checklists for head office overhead costs are given below with further

clarifications.
 Senior management costs – These refer to costs related with salaries and benefit

packages of the senior management in the head office.

 Indirect labor costs – Staffs other than the senior management members working at the

head office such as the technical, administrative, marketing, finance and supply staffs.
 Head office building costs – In both cases, costs are incurred in such a way either

rental costs will be paid, if the building is rented and building depreciation will be
considered, if the building is owned.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

B. Indirect Construction Cost

i. Head office overhead costs

 Bidding Expenses – These costs are usually associated with bid document purchases, site visit

expenses, bid bonds and so on. These costs are sometimes called sunk costs.
 Expertise service costs – These costs will be incurred when professional services are required

such as the services of external auditors, lawyers, management consultants and external
trainings.
 Office furniture and equipments – Different office furniture and equipments are required

depending on the size and standard of the company.

 Office running expenses – The head office operation requires lots of miscellaneous expenses

such as telephones, fax, internet services, stationery, mail services and so many others.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project
B. Indirect Construction Cost

i. Head office overhead costs

 Workshops, garages and warehouses – Costs related to central workshops, garages and

warehouses such as the depreciation costs of the buildings or rental expenses.

 Bank charges – It is very natural that companies may borrow money from banks.

Therefore, the interest to be paid on the borrowed capital shall be considered under the
head office costs.
 Insurance charges – Employees medical insurance, office building and small vehicles

insurance.
 Transportation and travel expenses –costs related to transportation, per diem.

 Sundry expenses – These are miscellaneous expenses such as advertisement expenses,

reception parties and donations.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

B. Indirect Construction Cost

ii. Site overhead costs

 Site overhead costs are all costs required to run the whole operation of a specific construction

project at site level.

 These costs are not associated with specific activity in a project but rather shared

proportionally by all activities within the project. Some of the site overhead costs are listed
below with further clarifications.
 Site management costs – These costs refer to costs related with salaries and benefit packages

of the site management members in the project site.

 Indirect labor costs – salaries and benefits of staffs other than the site management members

working at the project site such as site engineers, office engineers, administrative and finance
staffs, data collectors and so on.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

B. Indirect Construction Cost

ii. Site overhead costs

 Mobilization and demobilization costs –These costs are mainly transportation costs.

 Tender Expenses – These costs are related with the costs of the contract performance

security, advance repayment guarantee, contractor’s all risk insurance, insurance of

the works and third party insurance depending on the contract conditions agreed.
 Site offices –site offices are constructed from different materials such as corrugated

iron sheets, prefabricated materials, material packing steel containers, steel structure
and normal hollow concrete blocks.
 Expertise service costs – These costs will be incurred when professional services are

required at the project site such as lawyers, claim experts and so on.
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PROJECT COST ESTIMATION
Basic Cost Components of a construction project
B. Indirect Construction Cost

ii. Site overhead costs

 Office furniture and equipments – Different office furniture and

equipments are required depending on the size and location of the project.
 Office running expenses - The site office operation requires different

expenses such as telephones, fax, internet service, mail service and

stationery.
 Radio communications - If the coverage area of the construction project is

vast, hand held and stationed radio communications may be used within the
site and with the head office.

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

B. Indirect Construction Cost

ii. Site overhead costs

 Camp facilities – The costs of construction and operation of other facilities such as

restaurants, recreational centers and playgrounds are also included under the camp
facilities.
 Access roads – Depending on the topography and location of the project site,

different access roads may be required to construct such as detour roads, access roads
to quarry and disposal areas, etc.
 Water and power supply – All the site offices, camp facilities, the construction itself

requires water and power supply for operating the whole project properly.
 Workshops garages and warehouses, Transportation and travel expenses, Insurance

charges, etc…

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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

C. Risk Allowance
 Usually contractors incorporate risk allowances in their tender prices to compensate

the negative impacts of different risks such as contractual, technical, political and
economic risks.
 Contractual risks are usually stemming from the contract agreements with the project

owner, subcontractors and suppliers.

 Technical risks are associated usually with the clarification of the technical

specifications, working drawings, construction technology and difficulties in

understanding new method of constructions.
 Political and economic risks reflect the impact of political situations, stability of

economic policies, inflation and price escalation on the execution of the intended
construction project.
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PROJECT COST ESTIMATION
Basic Cost Components of a construction project

D. Profit and Income Tax

 Construction projects are executed by contractors whereby these contractors will

commit to invest their capital to get maximum possible profit from the contracts to be
performed.
 A profit margin entirely depends on the market competitiveness and company strategies.

 Any construction company operating a profitable business in Ethiopia shall pay 30% of

its gross profit as an income tax as per the income tax proclamation No. 286/2002.
 If the contractor is registered for VAT, which is usually the case, the contractor’s

construction cost estimate shall also include Value Added Tax which is 15% of the

tender amount in accordance with the Value Added Tax proclamation No. 285/2002 .

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PROJECT COST ESTIMATION
Unit Rate Analysis

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PROJECT COST ESTIMATION
Unit Rate Analysis
 Rate Analysis is the process of fixing cost per unit of measurement for the

different item of works.

 Total cost per unit of work (TC): Direct cost (DC) + Indirect cost (IC)

 Direct Cost (DC) includes cost due to material (MC), cost due to labor (LC),

cost due to equipment (EC)

 Indirect Cost (IC) covers overhead costs, and contractor’s profit.

 In order to facilitate estimation Material break down is essential

 Different formats, Excel sheets and software (like CONMIS) are used for rate

analysis.

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PROJECT COST ESTIMATION
Unit Rate Analysis Cont.
 It is advisable that contractors shall adapt suitable construction cost estimation

formats which enables to see all the detailed cost breakdowns of the required:
 Direct materials,
 Labor and equipment
 Head office and site overhead costs,
 Risk allowances,
 Profit,
 Income tax and
 Value Added Tax (VAT) or Turnover tax (TOT).

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Bisrat A. 50
PROJECT COST ESTIMATION
Unit Rate Analysis Cont.

I. Direct Material Unit Cost (E)

 Direct material cost is the total cost of construction materials required to

execute a unit of specific activity in a project.

 In estimating the direct material cost, the contractor shall obtain the quantity

and quality of materials required to produce the specific unit of an activity

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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.
I. Direct Material Unit Cost (E)
 In order to have a better material cost estimation, contractors shall develop their

own material price database and the database should contain, but not limited to,
the following information:
 Material price at place of delivery

 Supplier’s address such as telephone, fax and mail address

 Supplier’s contact person

 Supplier’s email address and web site

 Supplier’s credit facility

 Country of origin

 Material delivery time

 Place of delivery such as at the supplier’s shop, project site, Addis

Ababa air port or Djibouti port

 Transportation charges usually per ton-km as well as transporters
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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.
I. Direct Material Unit Cost (E)
 Unless otherwise stated on the contract conditions and investment
incentives, contractors shall add the following costs, but not limited, to
the CIF Djibouti price to get the final material unit cost at the project
site.
 Port clearance
 Duty
 Excise tax
 Value Added Tax
 Customs clearance
 Clearing Agent’s fee
 Transportation cost from Port to the project site
 Insurance, if required, during transportation
 Unloading expenses at the project site
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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.
II. Direct Labor Unit Cost (F)
 In calculating the direct labor cost, contractors need to calculate the
direct labor hourly cost which is the total hourly cost of labor crew
required to execute a specific activity in the project.
 In estimating the direct labor hourly cost, the contractor shall obtain
the:
 Number of labor,
labor
 Skill and labor utilization factor (UF)
 Labor basic salary and
 Labor index from his previous records and the labor market.

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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.
II. Direct Labor Unit Cost (F)
 Labor index is a multiplying factor of the basic salary which
represents the additional benefits whereby a worker gets from the
contractor such as:
 Severance pay
 Annual leave
 Occupational accident expenses
 Occupational disease expenses
 Overtime pay
 Occupational safety, health and working environment

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PROJECT COST ESTIMATION
25.71 days/ mth
Labor Index
1. Regular Salary Calculation25.71 days/ mth
= = 1.00

2.0 days/ mth

2. Annual Leave = = 0.078
25.71 days/ mth
0.92 days/ mth
3.Public Holidays = = 0.036
25.71 days/ mth
1.5 days/ mth
4. Miscellaneous Leave = = 0.058
25.71 days/ mth
5 Benefits
0.08 days/ mth
5.1. Closing & supplies = = 0.003
25.71 days/ mth
3 days/ mth
5.2. Avg Annual Increase = = 0.1166
25.71 days/ mth

5 days/ mth
6. Rainy Season Salary = = 0.1945
25.71 days/ mth
Sub Total 1.486
Contingency ( for work injury, dispute & labor union)
5 % of the total indexed cost = .05*1.5 0.08
Grand Total Indexed Factor assumed six working days in a week 56
1.56
PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.

III. Direct Equipment Cost (G)

 In order to calculate the direct equipment cost, contractors need to calculate

the direct equipment hourly cost which is the total hourly cost of equipment
crew required to execute a specific activity in a project.
 In estimating the direct equipment hourly cost, the contractor shall obtain

 The number of equipments,

 Capacity and equipment utilization factor (UF), and
 The equipment hourly cost.

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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.

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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.

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 PROJECT COST ESTIMATION AND VALUATION

WORK ITEM: 1.4) Reinforced Concrete (C-25) LABOUR HOURLY OUTPUT: 0.625 m3 / hr
TOTAL QTY.: 1 m3 EQUIPMENT: 0.625 m3 / hr

(A) Material Cost (1:01) (B) Labour (1:02) (C) Equipment Cost (1:03)
Type of Cost per Labour ** Indexed Hourly Type of Hourly Hourly
Material Unit Qty. * Rate Unit by Trade Unit UF Hour. Cost Cost Equipment No UF Rental Cost
Cement Qt 3.60 1500.00 5400.00 Forman 1 0.25 43.30 10.83 Tools 4 1 0.25 1.00
Sand m3 0.510 720.00 367.20 G.Leader 1 0.50 2.50 1.25 Mixer 1 1 50.00 50.00
Aggregate m3 0.760 900.00 684.00 DL 12 1.00 43.75 525.00 Vibrator 2 1 25.00 50.00
Water m3 0.21 20.50 4.37 Mason 1 1.00 81.25 81.25

Mixer Opr. 1 1.00 50.00 50.00

Vibrator Opr. 1 1 43.75 43.75

Total = 6455.57 Total = 712.08 Total = 101.00

A = Material unit cost B = Manpower Unit Cost C = Equipment Unit Cost

Total of ( 1:01) 6455.57 = Total of (1:02) 712.08 1139.32 = Total of (1:03) 101.00 161.60
Hourly output 0.625 Hourly output 0.625
DIRECT COST OF WORK ITEM = A + B + C = 7756.49
Remarks: 20% Add for overhead and profit = 9307.78 = 9307.80 Birr Per m3
UF: UTILIZATION FACTOR
*: Inclusive of Waste, Transporting, Handling, etc.
**: Inclusive of Benefits, trade subsidies and cost of overtime related output.

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PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.

61
PROJECT COST ESTIMATION AND VALUATION
Unit Rate Analysis Cont.

62
Example for costing
Calculate the Unit price for C -25 concrete (1:2:3) per m3 of work

Assume ; formwork and reinforcement rated separately

Material cost (MC)

 Wet fresh concrete 1m3

 Dry base analysis 1.5 to 1.6 m3

 Volume of cement = 1/6*1.55 = 0.258m3 =0.258m3/0.035m3 per bag = 7.4 bags

of cement
 Sands …………….= 2/6* 1.55 = 0.517m3

 Coarse aggregate…= 3/6 *1.55 = 0.775m3

 Water ……………= 0.16 m3 ( w/c 0.62)

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Solution cont.

Material Quantity/ Unit rate Cost

cumec
Cement 7.4 bags 750birr/bag 5550 birr/m3

Sand 0.517 m3 1563birr/m3 807.81birr/m3

Aggregate 0.775 m3 1375birr/m3 1065.63 birr/m3

Water 0.16 m3 3.0 birr/m3 0.48 birr/m3

Total cost c-25 concrete material per cubic meter 8489.55birr

Which is not include formwork and reinforcement. rated separately

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Ex.2
Calculate the total cost of C25 concrete(ratio:- 1:2:3, w/c
0.62) needed to cast 12 footing columns of dimension
0.3m*0.3m*4m & its pads 1.5m*1.5m*0.3m.
Assume:- 1.55m3 dry volume for 1m3 compacted fresh
concrete. Mixer rent 450birr/day, vibrator 250/day.
Crew participating for the work
labor quant salary Hourl UF prod
ity y cost uctivi
ty
Forman 1 15,000/ 0.5
mth
DL 12 400/day 1
mason 1 700/day 1
Mixer 1 450/day 1
op.
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Cost of cement 1500birr/quintal, Sand 25,000birr &
course aggregate 22,000birr with Sino truck(16m3)
Productivity of the crew 10m3/day

66
Questions?