Get your quantities & costs right
This section is specifically for
Contractors and Builders, those involved in costing, tendering, procurement, and construction.
We have compiled a list of commonly used building
materials & products and their respective unit costs which you can use freely for cost estimation of your
Projects in Malaysia.
These are Baseline Rates which will be updated on
a regular basis. Baseline Rates refer to standard rates applicable generally through
out Malaysia. The variation of rates will vary from place to place depending on many factors
such as locality, materials type & availability, labour costs, logistics, transport, fuel, local
practice, etc. The formula can be expressed as:
Actual Rate = Baseline Rate x K x
Rate = Rates for Costing & Tendering of Works.
Baseline Rate = Standard Rate as given in Table A or
K = factor
(varies, from Table B, K=1 for general purpose).
P = Contractor's profit margin,
self determine (generally 20%-50%)
The following illustrates the use of this approach :-
For concreting works Grade 20 in Johore, within 5 km of the city centre:
Baseline Rate = RM250/m3 (premixed concrete, given from Table
K = 1.25 (obtained from Table B)
P = 1.20 (assume 30% contractor's profit)
Actual Rate = RM250/- X 1.25 x 1.20 =
RM375/- per m3
Lump Sum Contract
In Malaysia, the general practice is to use Lump Sum Tender and Contract, which means that the
Tenderer must price just One Sum to carry out and completed the whole of the Works. With this type of contract the
oneness is on the Tenderer to ensure that his materials, plants, equipments and labour quantities are
correctly specified & taken-off and proper pricing be allocated. If any of these are in errors for whatever
reasons, the Contractor will make a loss which can have dire consequences for the contractor.
This process place the risks squarely on the Contractor.
In an effort to get the contract, everyone will be trying to out bid each other as they all know that
the lowest pricing would have an 90% chance of get the job. As a Contractor, what if your staff is
inexperienced or the take-off quantities and estimates of transport, materials are all wrong? For large quatities,
even an error of 10% could cause millions and drain you of all profits. You cannot rely on insider's
information on the tender estimates as these are usually made by office staff, those
without any real practical construction experience themselves based on pass tendered rates, which in
themselves could have been flawed already.
A reliable system is therefore needed to ensure that Contractors or Tenderers do not under-price nor
over-price, as the first will make you loss a lot of money and could handicap you, and the second would just be a
waste of valuable time and resources.