A schedule of rates is the beginning of an estimate

A reference rate becomes useful when we can explain what it covers, where it comes from and how it relates to the project in front of us.

In Bhutan, a schedule of rates provides an important common reference for estimating. Preparing a project budget still requires decisions about scope, quantities, site conditions, procurement and time. The rate is one input to that judgement.

My dissertation examined how practitioners adjusted estimates for project conditions. Respondents described using adjustments for factors such as complexity, location, market conditions and risk. In the reported analysis, the use of adjustments did not show a statistically significant association with the reported frequency of overruns.

An adjustment needs an explanation

That finding does not establish that adjustments are ineffective. A survey response about whether a factor was used says relatively little about how it was calculated, whether it was sufficient or how the project changed afterwards.

It does raise a useful question: can another professional understand the allowance and reproduce its logic? An unexplained uplift may make a budget look more cautious without making its basis any clearer.

For example, a site with difficult access might require smaller delivery vehicles, extra handling or temporary storage. A useful estimate identifies the relevant constraints and prices their consequences. A general location allowance needs an equally clear basis, including a check that those costs have not already been included elsewhere.

What a clear cost plan should say

My suggested starting checklist is straightforward:

• Scope: the work, specification and quantities being priced, together with exclusions.
• Rate basis: the source, edition or date, units and assumptions behind the rates.
• Project conditions: access, ground information, logistics and other conditions that affect delivery.
• Timing: the pricing date, intended programme and basis of any allowance for price movement.
• Risk: the uncertainties being allowed for, their rationale and who will review them.

The level of detail should match the stage of the design. An early feasibility estimate cannot contain the certainty of a fully measured tender document. It can, however, be explicit about what is known and what still needs to be established.

Use a consistent structure

The RICS New Rules of Measurement provide measurement rules and guidance for construction cost management. Their value for this discussion is a consistent structure in which to organise and explain costs. Applying that structure still requires appropriate local evidence and professional judgement.

The checklist above is my practical interpretation of the research themes. The dissertation did not test it as an intervention or establish a universal adjustment percentage.

Before relying on a total, ask whether someone else could understand its basis. A useful estimate should support a decision and remain understandable when the design, scope or market changes.