What is a Unit Price Book?
In the AEC (architecture, engineering, construction) world, a Unit Price Book is a list of detailed line-item construction tasks and costs.
A “detailed estimate of construction cost”, using detailed items inclusive of labor, material, and equipment aspects, should be part of any renovation, repair, or construction project. Lump sump bids, “square foot estimates”, “systems”, or “assemblies” do not provide the requisite level of detail to avoid costly miscommunication of work scope, or any reasonable level of fiduciary oversight.
A cost developed using a locally researched unit price book, is a forecast of the predicted cost based upon prices derived from associated breakdowns/descriptions of required materials, labor, and equipment for granular construction tasks. A detailed line-item estimate created with a UPB reflects costs far more efficiently and accurately than conceptual, or square-foot level estimate.
While contractors may know what it costs and how long it takes for them or their subs to complete a given task, representing this information in a way for Owners, Subs, AEs, and Oversight Groups to understand is critical. Furthermore, Owners and General Contractors can use a UPB to verify subcontractor estimates.
UPB Considerations and Requirements
1. The use of a UPB is recommended for any repair, renovation, maintenance, or new construction planning, procurement, or project delivery activity, and is mandated by Job Order Contracts. Generally, pricing reflected in a JOC UPB represented “bare costs”, costs that do not include contractor overhead, profit, or other fees.
2. A UPB should reflect current local costs in detail, noting individual materials, equipment, and labor breakdowns, and associated crew and productivity information used to develop a unit price estimate.
3. The UPB should be organized using the CSI Masterformat data architecture. This allows for efficient use, communication, and updating of information.
4. Localization factors or indexes should not be used to update or localize cost data. This technique easily introduces gross errors.
5. Economic factors or indexes should not be used to update cost data. This technique easily introduces gross errors.
UPB Size – While some unit price books contain hundreds of thousands of line items, most commonly encountered tasks associated with JOC generally involve five-to-ten-thousand-line items or less. A unit price book should provide line items that can be combined into a construction cost estimate for a particular task required by the Owner. In general, UPB of 30,000-to-40,000-line items is more than sufficient.
(Note: When used with a Job Order Contract, a UPB should account for at least 90% of the renovation, repair, maintenance, and/or construction costs associated with any specific project. Thus, the UPB should enable most JOC estimates/bids created to contain no more than 10% of the total estimate value resulting from items not found within the UPB. Line items in a JOC estimate that are not derived from the UPB are referred to as non-prepriced (NPP) line items. The allowable percentage of NPP line items, in terms of estimate value, should be noted within the Job Order Contract. The contractor then multiplies the total value of the estimate/bid approved co-efficient(s) to calculate the total cost of the project. Coefficients for Job Order Contracts typically range from 1.20 to 1.30, though they can vary beyond this range due to extenuating security or site issues, etc. If a locally researched UPB is used, the co-efficient should be 1.00 or greater.)
INTEGRITY OF UNIT PRICES (NOV 2021)
Individual Cost Items are located at this lowest level in the estimate and reports at this level are referred to as the Detail Reports. These are the basic work tasks consisting of labor, equipment and material cost and is the same level of detail as that found in the Unit Price Book Database. Some of the basic work tasks can be modified by Modifiers from the UPB.