What is Schedule of Rate (SOR)?
schedule of rate for construction
Introduction
In its simplest form, the rate schedule can be a list of labor, labor and plant rental rates in a contract that the contractor will use to determine the cost of pricing for the indicated day's work.
However, on a much larger scale, 'schedule of rate contract', 'term contract' or 'measured term contract' may be used when the type of work required is known but cannot be measured, or if there is no continuity program. In the absence of an estimate, tenderers cite unit rates as opposed to a document intended to cover all possible activities that may be part of the work.
Since the amount of work is unknown, unit rates include overhead and profit. There will also be rates for general initials such as scaffolding, temporary electricity, supervision and temporary accommodation. Projects may have provision for escalation on an annual percentage increase basis over a period of about 18 months.
After the rate analysis of these items a schedule or a list of the rates of different items is made. This type of document is known as rate schedule or S.O.R. It is prepared by major concerns or public bodies such as the Central Public Works Department (CPWD), the state government, etc.
This becomes very effective, especially in making estimates and determining the rate of an additional item managed by the contractor. Usually a clause is inserted in the terms of the contract, which states that any additional items that may occur during the performance of the work will be provided at the rate of the SOR.
Advantages & Disadvantages
Benefits of the rate term contract schedule include:
- Change is easier to predict and is usually cheaper than traditional deals at fixed prices.
- The customer can stop and start working at a pace that can be determined by cash flow or money.
- Since this process is cheap and fast, contractors can be asked to tender a larger pool.
- It is flexible with respect to opportunities and contract commitments.
- Since a full-detail design is not required, the client can obtain a tender at an early stage of a project and begin construction before the design is complete. So to that extent, it is 'fast track.
Disadvantages include:
- Additional resources are needed to measure work and certify payments.
- The customer doesn't have a final price when starting work.
- It is difficult for contractors to plan for long-term resources and therefore employees can turn with a loss of continuity.
- If the latter is not implemented, contractors may be tempted to front-load costs.
- There is no real incentive for contractors to deal with such work as an urgent one and its best employees will be placed in projects where the contractor bears more risk.
- The tender document will be an important package to look like a bill of quantities with multiple options and discount opportunities depending on the quantity.
Tender Documents
Tender documents may have the following headings:
General condition
- measurement method.
- Star and proportional rate qualification.
- site primary.
- Overtime rate treatment.
- Code of conduct.
- Include safety, waste, transportation and health and safety compliance.
- Approved list of suppliers.
- What rates are included, such as all execution and travel costs.
- Customer direct supply and directly employed merchant.
- Verification and commissioning.
- Curved Work Premium.
- Definitions used in documents.
Construction work
- the destruction.
- Geotechnical investigation.
- Excavation.
- concrete work.
- Brick and blockwork and masonry.
- Roofing and tanking.
- Scaffolding and staging.
- Carpentry and Joining.
- Iron Manjari.
- Steel and metal work.
- fire shutter
- Plasterwork, floor, wall, ceiling finish.
- Plumbing and drainage with cable ducts.
- Fixtures, fittings and soft upholstery.
- Detachable partitions, drywall and cubicles.
- outside work.
- Hard work.
- Plant and equipment rental.
Mechanical & Electrical, Elevators & Escalators
- electrical installation.
- High voltage switchgear.
- transformer.
- Low voltage switchgear.
- standby generator.
- Air conditioning and ventilation.
- Building Management System (BMS) control.
- fire service.
- City Gas.
- food equipment.
- intruder alarm.
- public address system.
- Exterior lighting and electrical gates.
- the lift.
- Escalator.
- Clean the crib system.
Each of these headings will consist of a myriad of elements that must then be broken down into units of value. For example brick, blockwork and masonry can include any shape, size pattern or color called natural marble or granite slab/tile:
Important points to keep in mind:
- In some cases, the contractor may be asked to submit a tender quoting a percentage above or below the S.O.R.
- The rate schedule includes groups of items such as broken items, excavation items, concrete items, RCC works, brickwork items, etc. and also provides information on current wages of labor and prices of various items.
- The rate of items mentioned in the rate schedule may change due to constant changes in the market rate of goods, labor wages, cost of vehicles, etc. Thus the rate schedule is revised periodically, usually after two years.
- CPWD is the main construction agency of the government. India and it is responsible for the planning and design, construction and maintenance of various building projects. Therefore, SOR serves as an important document for CPWD.
- The price CPWD schedule includes an initial rate of more than 2500 items for materials, labor, vehicles, etc., and a completion rate of about 3000 jobs under various sub-headings such as building work, concrete work, water supply, etc.
- The rates of the finished items are worked out by analyzing the rates along with the quality of the materials, labor and various things required such as water charges, contractor profit etc.
