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The rate analysis is the method of

deriving the rate per unit of a
particular item of work , from the
cost of material, labour, machineries
and other miscellaneous expenses
for its completion.
Normally 15% on the account of
contractors’ profit and overhead
charges are added to arrive final
rate.
1. Estimating various operations involved.
2. Material cost – Evaluation of material constants,
requirement of quantities and cost.
3. Labour cost – Estimating labour constant and
cost.
4. Plant cost - Estimating the type and no. of
equipment required and rate thereof.
5. Contractors’ over head & profits - cost of
supervision charges and reasonable contractors
profit.
1. Unit of that particular item.
2. Rate of materials including transportation charges,
sale tax, local tax , royalty etc.
3. Actual labour required and their rates.
4. Running, hiring and operational cost of machinery.
5. Charges of tools and tackles to execute that
particular item.
1. Specification of works.
2. Specification of materials.
3. Method of constructional operation
4. Quantities of materials and their rates .
5. Location of the site of work and distance from
the source of material.
6. Rate of transport.
7. Availability of water if water is required to
complete the item.
8. Profit of contractor.
9. Over head expenses of contractor.
10. Labour required and their rate.
The analysis of Rate for Manual Working is usually
worked out for the unit of payment of the
particular item of work under two heads :
(i) Materials
(ii) Labour
And their costs added together give the cost of
the item of the work.
For tools and Plants (T&P) and Misc. petty items
which can not be accounted in details, lump sum
provision (Generally 3%) is made.

15% Profit may be added over the whole cost of

labour and materials.
i. Hill Compensatory Allowance
ii. Hazard Allowance
iii. Traveling Allowance
iv. Medical Benefits or expenses
v. Workman Compensation
vi. Free water and power supply
vii. Subsidized Ration (Food)
viii. Other amenities like free uniforms, gum
boots, helmets, woolens and mess utensils.
i. Emoluments of managerial and clerical staff
ii. General establishment watch and ward,
sanitary, mess
iii. Local conveyance
iv. Traveling expenses
v. Medical and sanitation
vi. Social Welfare
vii. Office expenses
viii. Share of head office expenses
(1) Rates for extra items of works:- Any item of
work carried out by the Contractor on the
instructions of the Engineer which is not included
in the accepted schedules of rates shall be
executed at the rates set-forth in the "Schedule
of Rates...................Railway" modified by the
tender percentage and such items are not
contained in the latter, at the rate agreed upon
between the Engineer and the Contractor before
the execution of such items of work and the
Contractors shall be bound to notify the Engineer
at least seven days before the necessity arises
for the execution of such items of works that
the accepted schedule of rates does not include
rate or rates for the extra work involved.
The rates payable for such items shall be
decided at the meeting to be held between
the Engineer and Contractor, in as short a
period as possible after the need for the
special item has come to the notice. In case
the Contractor fails to attend the meeting
after being notified to do so or in the event
of no settlement being arrived at, the Railway
shall be entitled to execute the extra works
by other means and the Contractor shall have
no claim for loss or damage that may result
from such procedure.
1. Last Accepted Rates (LAR) :- shall be
considered for comparison of rates from
nearest point for similar work keeping in mind:-
 Cost of both works,
 Cost of item being compared,
 Rates are from similar work,
 Work is nearest for better comparison,
 If number of rates are available for same item then
average of workable rates, leaving other rates ( for
which reasons shall be recorded) to be taken,
2. If no LAR is available then RATE ANALYSIS to
be done based on market survey or rates
derived from SSR.