A list of rates for various things post-analysis is called the schedule of rates (SOR full form). Government agencies like the Central Public Works Division (CPWD) determine these tariffs. It is beneficial when estimating and calculating labourer wages. A stipulation stating that any additional items added during construction must be paid for following SOR is inserted in the contract’s terms and conditions.
It includes information on the costs and rates for various items, including those used in demolition, excavation, concrete, RCC work, brickwork, and more. The SOR is modified or reissued almost every year due to constant changes in the market price.
SOR: Detailed Description
The schedule of rates is a fundamental framework for assessing project cost estimates. The additional cost associated with transporting materials from authorised sources to the site of work shall be applied throughout the project costing process based on this schedule of rates to determine the actual execution cost.
Any government or public body, including public trusts and NGOs, cannot directly assign the work to a contractor. Any work awarding procedure must be competitive and transparent at the same time. Therefore, inviting offers from many bidders is essential to have competitive proposals and ensure system transparency. Once more, any time a government agency intends to develop a structure, it must calculate the expected cost for making financial and budgetary provisions.
All architectural components are intricate, requiring various materials and labour-intensive processes. For instance, sand, mortar, the cost of bricks, labour, scaffolding, curing, etc., would determine the cost of brick masonry per cubic metre while building a brick wall.
After doing rate analysis and determining the relative contributions of each component, materials, labour, plant & equipment, tools, scaffolding, and site overheads to the finished item, all departments determine the rates for various construction items.
SOR: Significance
The rates charged for various pieces of work are listed in a Schedule of Rates (SOR). This document works as a guide for pricing for contracts and tenders. A description of the job to be done, the unit of measurement, the rate per unit, and any other pertinent information are typically included in the SOR.
A Schedule of Rates establishes a uniform pricing structure for similar work across various projects. This ensures that everyone participating in the contracting and tendering process knows the costs associated with particular types of work. This information can reduce disagreements and misunderstandings in the future.
SOR: Required Documents
The tender documents will be a sizable bundle that resembles a bill of quantities, with several alternatives and quantity-based discount potential. The following headings might appear on tender documents:
- General circumstances
- Measuring techniques.
- Code of conduct.
- Protection, trash, transportation and safety regulations
- Suppliers on the approved list
- Rating criteria and proportional rates.
- Preliminary site work.
- Commissioning and testing.
- Curved work.
- Built-up area
SOR: Advantages
- Variations are generally less expensive than fixed-price contracts and simpler to estimate.
- The process is cheap and quick, so constructors can ask a bigger pool of contractors to submit bids.
- Its scope and contractual commitment are flexible.
- The client is free to pause and resume work at a rate that may be influenced by funding or cash flow.
- A fully-detailed design is unnecessary; the client can request bids early in the project and start building before the procedure is finished.
SOR: Drawbacks
- More resources are needed to gauge effort and verify payments.
- Long-term resource planning is challenging for contractors, which could result in personnel changes and a loss of continuity.
- When agreeing to begin work, the client does not know the total cost.
- Contractors can be tempted to front-load costs if future work is not successful.
FAQs
Who creates the schedule of rates?
Large businesses or government agencies, such as the Central Public Works Department (CPWD) and state governments, prepare the SOR.
Is SOR necessary for the foundation of a building?
SOR refers to any schedule in the contract that gives the applicable rate for performing each segment or item of the services and may include lump sums, other amounts, quantities, and prices.
How is a bill of quantities different from SOR?
When a comprehensive design is created and exact amounts can be computed, a bill of quantities is often utilised; in contrast, a schedule of rates is used when one cannot determine quantities.