UNIT COST DERIVATION

(VERTICAL & HORIZONTAL CONSTRUCTION)

[Asufardo, Bacerra, Bawar, Chalan, Duran, Fernandez, Galino, Gonzales]

Cost Estimate is the simplest method of estimating the cost of a proposed construction
project. In this method, the quantity surveyor counts the number of units accommodated in a
building, for example, the number of occupants or main furniture objects used by an individual.
Different components of the cost of each project and their cost estimation are calculated. The Sum
of costs of each project element gives the total construction cost of the project and, the unit cost
method of estimation can use for project design estimates and bid estimates.

Construction cost estimates have four price categories that are needed to be considered:

1. Labor

2. Materials

3. Equipment

4. Subcontractors

OBJECTIVES

This lesson aims to:

1. Present how unit cost derivation works for a method of construction for horizontal and
vertical structures.

2. Determine the unit costs for labor, materials, equipment, and subcontractors.

3. List and describe the different price categories needed to be considered in pricing a
construction estimate.

HORIZONTAL & VERTICAL CONSTRUCTION

Horizontal and vertical construction are terms used in the building industry to describe the
physical orientation of a built structure. Simply put, horizontal construction refers to structures that
are more spread out relative to their height, while vertical construction refers to taller structures
that are more confined in terms of their footprint.

Horizontal construction requires more land space to build since these structures usually have a
greater width and length than height. Vertical construction is typically associated with structures
that are built vertically and stretch upward more.

LABOR

Unit cost for labor is often viewed as a broad measure of (international or local) price
competitiveness. They are defined as the average cost of labour per unit of output produced. They
can be expressed as the ratio of total labour compensation per hour worked to output per hour
worked (labour productivity). Here in the Philippines, there are two kinds of labor rating that is
applicable – Manila rate and Provincial rate.

Manila is the country’s capital and is also the most progressing place in the Philippines, thus,
lots of construction projects happen within the place. Manila rate is higher than provincial rate,
obviously because of the said matter.

According to an article by Mishra (2021), if we assume that the construction project is

decomposed into n tasks. Let Qi be the quantity of work for task i, Mi be the unit material cost of
task i, Ei be the unit equipment rate for task i, Li be the units of labor required per unit of Qi, and Wi
be the wage rate associated with Li. In this case, the total cost y is:

Here is the sample labor costs per day here in the Philippines:

Here is the sample labor costs per hour here in the Philippines:
MATERIALS

Every construction feature has a "material" attribute that indicates the predominant
material of that structure. Its list of values is open (code list).

The description of the attribute does not correspond to what is provided in the real world. In
most cases, the information about structure materials refers to what is visible from the outside: the
load-bearing structure, when exposed, or the exterior facing. Therefore, it is proposed to modify the
definition of the attribute accordingly. The list of values needs to be extended in order to increases
the capacity of the model to represent the real-world data. It will also improve the interoperability
with other community data models.

Here is the sample bill of materials & cost estimate of a 2-storey residence.
EEQUIPMENT

A wide range of equipment may be used to construct a building. Very broadly, the term
‘equipment’ generally refers to a set of tools used for a single purpose. This is as opposed to
individual tools, which are instruments that are generally used by hand or plant which refers to
pieces of heavy machinery.
Construction Heavy Equipment Price list in the Philippines

SUBCONTRACTOR

All costs incurred by subcontractors for the project, including labor and non-labor costs, are
referred to as subcontractor costs. Subcontractor Costs refers to the expenses borne by the Owner
in relation to any Subcontractors hired by the Owner. Contractors who respond to a government
request for proposal with even one subcontractor would almost certainly be required to perform a
cost and price analysis on that subcontractor. Since most subcontracts keep the information hidden,
the prime contractor is also responsible for conducting a price study.

Horizontal

In constructing a bridge, concrete contracting is one of the most common forms of

construction subcontractors. These specialized contractors are capable of working on a wide range
of projects. Some may be concrete finishers, while others will specialize in foundations or asphalt. All
of these concrete specialists come under the concrete job subcategory in OSHA, and they are also
classified as such in other government fields.

Vertical

In constructing a multi-purpose building here are the types of subcontractors commonly

present. Specialty contractors in roofing, siding, and sheet metal work are significant categories of
subcontractors in the building industry. These subcontractors can handle a wide range of tasks. From
dealing with architectural metal to installing skylights. They oversee the roofing, gutters, and
probably ductwork fabrication or installation. Roofing, siding, and sheet metal companies are also
known to fabricate their own parts. Roofing, siding, and sheet metal jobs will be busy subcontracting
fields as more industrial spaces and design improvements occur.

Subcontractors who specialize in carpentry and floor work are important in the construction
industry. Carpenters specialize in joinery, garage doors, framing, and doors, as well as building and
installing cabinets. Also, they will oversee the whole project's trim and finishes. These
subcontractors will be seen on most sites because flooring is always necessary in any project.
Knowing that the flooring is in good condition is reassuring. Flooring subcontractors are crucial
because they ensure that the flooring is installed properly and that the project's needs are met.

SAMPLE QUANTITY TAKE-OFF FOR HORIZONTAL CONSTRUCTION

SAMPLE QUANTITY TAKE-OFF FOR VERTICAL CONSTRUCTION