Glossary
Unit price
A unit price is the cost or price for one unit of work, such as one square foot, linear foot, cubic yard or each, including labor, material and equipment.
By IntelCost Team ·
A unit price is the cost or price for one unit of work: one square foot of drywall, one cubic yard of concrete, one door. Multiply it by the quantity from the quantity takeoff and you have the cost of that line.
The term is used two ways. Inside an estimate, a unit price (often called a unit cost) is your own cost per unit. In a contract or bid form, a unit price is what the owner will pay per unit, with your markup included.
How a unit cost is built
Most unit costs are the sum of four parts per unit:
- Labor: man-hours per unit x the labor rate per hour.
- Material: material cost per unit, with waste.
- Equipment: equipment cost per unit, such as lifts or a loader.
- Subcontract: a sub's price per unit, where the work is let out.
Labor is usually the hardest part to get right, because it depends on the production rate your crews actually achieve. Use your own job records where you have them.
Example: building a unit cost
Say you are pricing hung and finished drywall per square foot (example values):
| Part | Math | Per SF |
|---|---|---|
| Material: board, screws, tape, compound | From supplier pricing | $0.65 |
| Labor | 0.02 MH/SF x $55.00/MH | $1.10 |
| Equipment: lifts and scaffold | Spread over the job | $0.05 |
| Unit cost | $1.80 |
For 2,200 SF of drywall: 2,200 SF x $1.80 = $3,960.
The labor rate should be the burdened rate, or labor burden should be added elsewhere in the estimate. Do not count it twice.
Unit price contracts
On a unit price contract, often used for sitework and roads, the bid form lists estimated quantities and the contractor bids a price per unit. The owner pays for the quantity actually installed and measured.
Say the bid form lists 1,200 CY of rock excavation and you bid $85.00 per CY (example values). If 1,350 CY is measured in the field, payment is 1,350 CY x $85.00 = $114,750, not the $102,000 the bid form implied.
Because payment follows the measured quantity, check the owner's estimated quantities against your own takeoff. Contracts often allow a unit price to be adjusted when the actual quantity differs a lot from the estimate; read the contract for the terms.
Unit cost vs unit price
Your unit cost has no overhead or profit in it. The unit price you put on a bid form does: it is your unit cost plus markup, spread over the quantity. Keep the two apart in your estimate so you always know which one you are looking at.
In IntelCost's estimating, each line takes unit man-hours times a wage, unit material and equipment, or a sub quote, and you can build a unit price from labor, material, equipment and subcontract parts. Reusable sets of priced items are often saved as an assembly.