The Golden State: Where & How to Live, Secure, Visit, Enjoy and Thrive in California

Plumbing Heating And Piping

3.8. Average Rate (Dollars per Man-hour)—Column 7

The seventh column Average Rate is a composite figure which takes into account items which pertain to labor which may otherwise be overlooked such as travel time, foreman (other than the superintendent), etc. The method used to compute the average rate is given in the following example:

Example 3.1. Assume a project requiring the employment of 20 mechanics. Sound management indicates that there be a foreman for each 10 men and that a general foreman be employed when two such crews are on the job. The base rate is assumed to be $3 per hour, plus 25 cents per hour for foremen and 50 cents per hour for general foremen. Travel allowance will be assumed to be $2 per day. Circumstances are such that there will be 1 hr overtime each day. Overtime will be paid at double-time rate. The base rate of $3 per hour is certainly not indicative of the total cost per man-hour. Therefore, the average hourly rate must be computed as follows:

It will be noted that there are only 180 productive hours included in the above. Therefore, by dividing the total cost for the day by the productive hours, the average cost per hour is obtained:

Total cost per day $746
---------------------- = --------= $4.15 per hr
Productive hours 180

This is the average cost per hour, $4.15, and should be used in column 7 instead of the $3 given as the scale. The Labor Amount is found by multiplying the number of hours by the average hourly rate determined by the above method.

3.9. Total Direct Costs

Totals should be entered in the space provided on sheet 2, 2a, or 26, as the case may be, for all columns entitled Miscl. Cost, Material Cost, Man-hours, and Labor Amount.

3.10. Subcontracts—Sheet 3

Sheet 3 of the summary gives a listing of possible subcontracts which may be contemplated. Space is provided for others if required. In this case the table is different from those preceding. It allows space for the subcontractor's name, the amount of his proposal, the percentage and amount of markup to be added to cover the cost of handling the subcontract, and the total amount to use in the final bid which will be the sum of the subcontract price and the amount of the markup desired. The total of all subcontracts should be entered in the appropriate place at the bottom of this table.