Unit Price

A Unit Price in the construction industry refers to the cost assigned to a specific unit of measurement for materials or labor within a construction project. This pricing method is used to calculate the total cost of materials and labor based on the actual quantities needed or used.

Key Components:

  • Material Costs: Price per unit of materials such as cubic meters of concrete, tons of steel, or square meters of flooring.
  • Labour Costs: Cost per unit of labor, often measured in hours or days, depending on the type of work.
  • Equipment Costs: Cost per unit of equipment usage, typically measured in hours or days for machinery like excavators or cranes.


  • Flexibility: Allows for adjustments to the total project cost as actual usage varies, accommodating changes in project scope or quantities of work.
  • Accuracy: Provides a precise method for calculating costs based on actual quantities used, reducing the risk of budget overruns.
  • Transparency: Enhances transparency in pricing and billing, making it easier to track and verify costs.
  • Simplified Bidding: Facilitates the bidding process by clearly defining costs for specific units of work, making it easier for contractors to prepare competitive bids.


  1. Define Units: Identify the specific units of measurement for materials, labour, and equipment relevant to the project.
  2. Assign Prices: Determine the unit prices for each identified unit of measurement based on market rates, supplier quotes, and labor rates.
  3. Estimate Quantities: Estimate the quantities of each unit needed for the project based on plans and specifications.
  4. Calculate Costs: Multiply the unit prices by the estimated quantities to calculate the total cost for each component.
  5. Monitor Usage: Track actual usage of materials, labour, and equipment throughout the project to adjust costs as necessary.

Applications in Construction:

  • Contract Preparation: Unit prices are detailed in contracts to specify costs for materials and labour, allowing for adjustments based on actual usage.
  • Cost Management: Helps in managing and controlling project costs by providing a clear basis for calculating expenses.
  • Change Orders: Facilitates the processing of change orders by providing a straightforward method for pricing additional work or materials.
  • Project Estimation: Used in the early stages of project planning to develop accurate cost estimates based on unit prices and projected quantities.

Examples of Unit Price Items:

  • Concrete: Cost per cubic meter
  • Steel: Cost per ton
  • Painting: Cost per square meter
  • Carpentry: Cost per hour of labour
  • Excavation: Cost per cubic meter of earth moved