Page 172 - BASIC GUIDELINE FOR QS

Professional Practice: Guideline for Quantity Surveyor Chapter 5

5.8.16 Schedule of Rate

A schedule of rates is a list in a contract setting out the
staff, labour and plant hire rates etc that a contractor will use for pricing cost
reimbursable work. It does not contain any quantities for the specific work items and is

typically used when the nature of work required is known but it cannot be quantified, or if
continuity of programme cannot be determined.

However, on a much larger scale, a 'schedule of rates term contract', 'term
contract' or 'measured term contract' may be used when the nature of work required is
known but it cannot be quantified, or if continuity of programme cannot be determined. In

the absence of an estimate, tenderers quote unit rates against a document that is
intended to cover all likely activities that might form part of the works.

As the extent of the work is unknown, the unit rates include overheads and profit.
General preliminaries such as scaffolding, temporary power, supervision and
temporary accommodation will also have rates. On projects longer than around 18

months there might be escalation provisions based on annual percentage increases.

The advantages and disadvantages of Schedule of Rate usage as part of contract:

Advantages Disadvantages
Variations are easier Additional resources are required

to estimate and normally to measure work and certify payment
cheaper than on fixed s.
price traditional contracts.

The client can stop and The client does not have a
start work at a pace that might final price when committing to
be determined by cash starting work.

flow or funding.
A larger pool of contractors can It is difficult

be asked to tender as the for contractors to plan long-term
process is inexpensive and resources and so might mean
quick. changes to personnel with loss of

continuity.
It is flexible in relation Contractors may be tempted to front-

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