Applying unit cost rates is a time-consuming process, but it's the most accurate method for estimating the costs of a project and is often the preferred method of estimators and builders. However, there's a method that's much faster with almost the same degree of accuracy. This method uses composite rates.
What is a Building Component?
A component is an essential part of a building which is manufactured as an independent unit, that can be joined to other elements to form a more complex item. Generally, components can be sourced from a single supplier, or built by the builder. A combination of components may be described as an assembly.
Examples of building components are Roof Trusses, Retaining Walls, Footings, etc.
How to cost a Component?
Components or Assemblies always combines two or more items (or unit cost rates) which have a related quantities. Composite rates can easily be measured to provide accurate figures. A component contains one or more of the following cost:
Materials and cartage
Direct labour and subcontract labour
Plant and equipment.
For example, a Retaining Wall is a component consisting of the following items:
- Reinforcement for footings
- Concretor to lay REO
- Concrete to Footings
- Block Layer
- Reinforcement to the Block Wall
- Concrete to Corefill
- Concrete Pump
The unit cost of above items is the total cost of all areas that make up the item, divided by its quantity. You could then develop the unit cost rate.
For the Retaining Wall, a composite rate includes unit cost rates for all the above items. The unit rate would relate to the square meter or volume of the wall (square meter is more easily measured from the drawings).
Examples of using component rates are:
- Construction Cost Per Square Metre
- Laying of Foundation Per Metre
- Laying of Slabs Per Square Metre
- Masonry Walls Per Square Metre
- Painting Per Square Metre
How to use Component / Assembly rates?
A composite rate can only be applied to like work (e.g. the composite rate for a 300 wide X 400 deep footing can't be used for a footing that's 300 wide X 600 deep). Composite rates for footings in different soils may need adjusting. In each case, the unit cost rates for the component items will vary.
Consider the retaining wall section of a bill of quantities, where the wall length is 800mm and the length is 10m. All items could be combined as one composite rate or the materials, delivery, labour and plant for the entire area of the retaining wall could be considered individually, as if developing a unit cost rate.
The retaining wall design looks like this:
Having a 800mm height with 22m length retaining wall, we will come up with this Bill of Quantities:
Working out the quantities and considering items' costs, we get the Total Cost of building the above retaining wall:
Adding up all the costs, we will reach the $6,173.12, total costs of building this retaining wall.
Knowing the wall is 0.8m x 22m, the total area of the wall is: 17.6m2.
Thus, the composite rate of building this wall is: 6,173.12 / 17.60 = $350.75 / m2
Adopting the Rates
By adopting composite rates, you can reduce the taking-off time in pricing a project, providing you've already established your composite rates and checked them. This rate can now be used for any job with a similar retaining wall specification.
It's now much simpler to measure the overall length of wall, multiply it by it's height, and multiply by the composite rate, to arrive at the estimated value of the wall.
Using Composite Rates in BREINZ Estimating Software
If your work if repetitive in nature (e.g. you specialise in low set brick veneer slab-on-ground housing of around 250m² to 350m²), the scope for developing composite rates is quite extensive.
You can use the pre-defined assemblies, or create you own composite in Breinz.
In the Assemblies section, under the Pricelists, you can select the element category, select your assembly, and add it in your project.
By adding an assembly to your costing, you add formulas, required fields, and Items needed to create this assembly. Defining your assembly using variables, Breinz automatically calculate quantities and prepare a quick cost estimate for your job.
You just need to select your suppliers and products from the dopdown lists, and create your tender.
Edit an assembly in Breinz
You can edit your assembly, formulas, items, and quantities anytime during your estimation.
Changing the wall height, separate it into two different walls, and even adding some more segments into the wall are easy.
This composite rate could be taken further by including the costs for excavating the footings, which can be done because the two areas are directly related to each other. There are many areas that can be treated similarly; it all depends on the type of work undertaken.
Keeping track of your take-offs and how calculating it would help you later on project, as well as any other colleague that may want to find the quantities.
What about Orders and Lettings?
By using assemblies in Breinz, the Orders to your suppliers would automatically created as well.
By clicking on your Cost Estimate Module, selecting your project, using the Breinz Trade Assembly in WBS drop down menu, you can find the list of all the trades involving your assembly:
Selecting a trade from the above list, you can see all the items and quantities in your assembly / element.
By selecting the items you want to order and click on Order button, you can easily and quickly create your orders and send out the letting.