How to Build Up an m² Rate: Insights from a Forensic Quantity Surveyor and Quantum Expert Witness

For a forensic quantity surveyor and quantum expert witness, a rate is only as strong as the working behind it. Whether the matter is heading to arbitration, litigation or expert determination, the rate needs a clear, documented method that another expert can follow and test.

This guide shows how to build up an m² rate from its parts, using internal wall painting as the example, and why that build-up carries more weight than a global figure or a published book rate.

Define the Scope of Work

Every rate starts with the scope. For painting, the key questions are:

• Nature of the task: Internal walls, ceilings, trims or external surfaces?

• Condition of the surface: Does it need filling, sanding or priming first?

• Number of coats: How many coats does the specification require?

• Quality of finish: Standard trade finish or a high-end decorative finish?

A clear scope avoids arguments later about what the rate was meant to cover.

Break Down the Rate

A rate has four parts: labour, materials, overheads and profit. Each needs to be calculated and backed by evidence. The figures below are for one coat and are illustrative only.

Labour

Labour cost is the time the task takes multiplied by the hourly cost of the worker.

• Productivity: How many m² can be painted per hour? An experienced painter might cover 20 m² an hour, per coat, on a smooth flat surface.

• Hourly cost: Use the full cost of employing the painter, not just the wage. That includes superannuation, workers’ compensation, leave entitlements, payroll tax, portable long service leave, applicable allowances and non-productive time.

Example calculation:

A painter with an all-in cost of $50/hour, covering 20 m²/hour:
Labour cost per m² = $50 ÷ 20 = $2.50/m²

Materials

Materials include paint, primer, masking tape, drop sheets and other consumables.

• Quantity: Use the manufacturer’s coverage rate. For example, paint might cover 10 m² per litre per coat.

• Waste: Coverage rates are theoretical. Add an allowance for waste, spillage and absorption into the surface, typically in the order of 5–10%.

• Unit price: Use supplier quotes or trade pricing.

Example calculation:

Paint at $30/litre, covering 10 m²/litre, with a 10% waste allowance:
Material cost per m² = ($30 ÷ 10) × 1.10 = $3.30/m²

Overheads

Overheads are the indirect costs that support the work, such as transport, insurance, tool maintenance and administration. There are two common ways to allow for them.

Option 1: Fixed allocation. Divide monthly overheads by the expected monthly output.

Monthly overheads = $1,000
Monthly output = 1,000 m²
Overhead per m² = $1,000 ÷ 1,000 = $1.00/m²

Option 2: Percentage of direct costs. Apply a percentage to labour plus materials.

Direct costs = $2.50 + $3.30 = $5.80/m²
Overheads at 20% = $5.80 × 0.20 = $1.16/m²

The two methods rarely give the same answer. Whichever one is used, the expert should explain why it suits the business and the project. The example below uses Option 2.

Profit

Profit reflects risk, complexity and market conditions. Before choosing a figure, check the contract. Many contracts set the percentage for overheads and profit on variations, and that figure will usually apply.

Be clear whether the figure is a markup or a margin, because they give different answers:

• 20% markup on cost: $6.96 × 1.20 = $8.35/m²

• 20% margin on the selling price: $6.96 ÷ 0.80 = $8.70/m²

Mixing up the two is a common source of disagreement between experts.

Example Rate Build-Up

Rate for one coat of paint on a 10 m² wall, using a 20% markup:

Labour: $2.50/m²
Materials (including waste): $3.30/m²
Overheads (20% of direct costs): $1.16/m²
Total cost: $6.96/m²
Profit (20% markup): $6.96 × 1.20 = $8.35/m²
For the 10 m² wall: 10 m² × $8.352 = $83.52

If the specification calls for two coats, the labour and material figures apply to each coat.

Validating the Rate

Once the rate is built, the expert should test it:

•     Cross-check it against published benchmarks, such as Rawlinsons or local trade price guides.

•     Make sure the assumptions, such as productivity and material prices, are reasonable and in line with industry norms.

•     Support the numbers with evidence, such as supplier quotes, time sheets, daily records or data from past projects.

Making the Rate Defensible

A rate will be picked apart in cross-examination and in the other expert’s report. To stand up:

•     Show every component and how it was calculated.

•     Use reliable, verifiable sources for each assumption and cost.

•     Allow for project-specific conditions such as location, access, working hours and special materials.

---

Why Build the Rate at All?

It can be tempting to skip the build-up. Some claims roll every cost into one global figure. Others lift a rate straight from a pricing book. Both approaches save time at the start and tend to cost more at the end.

Global claims

A global claim presents a total cost overrun and says, in effect, that the other party caused all of it. Australian courts have been wary of this approach since John Holland Construction & Engineering Pty Ltd v Kvaerner R J Brown Pty Ltd, a 1996 decision of the Supreme Court of Victoria. The court accepted that a global claim may be allowed where it is impractical to separate specific losses from specific causes. But if part of the loss came from the contractor’s own inefficiency or from neutral events, and that part cannot be identified and removed, the whole claim is exposed.

A built-up rate avoids that problem because every part of the cost can be traced. Say a late design change slows the painter from 20 m² to 14 m² an hour. The labour cost rises from $2.50 to about $3.57 per m². That extra $1.07 per m² can be tied to one event and tested against the records. A single overrun figure cannot be tested in the same way.

Book rates

Published rates from sources such as Rawlinsons are useful. They are averages, though, drawn from many projects and adjusted for location. They cannot account for the access, sequencing, surface condition or crew on a particular site.

That is why book rates work best as a cross-check, as in step 4, and not as the whole answer. Where the contract has no applicable rate, standard forms such as AS 4000 fall back on reasonable rates or prices, including a reasonable amount for profit and overheads. A rate built from the project’s own records, and then checked against a published source, is usually the easiest way to show what is reasonable. An expert who relies on a book rate alone should expect to be asked why the project’s own records were not used.

Our earlier insights article, Courts Don’t Buy Global Claims – And Nor Should QS Experts, looks at the global claims principle in more detail.

“For a forensic quantity surveyor and quantum expert witness, building up a rate is more than a technical exercise. It creates a clear position that can survive detailed examination. Breaking costs into their parts, backing each part with evidence and checking the result against published data gives the tribunal something it can follow and test. That is what makes a rate credible, and it is what global figures and book rates on their own cannot provide.”

---

At Accura Consulting, our team of experts work with clients to create a tailored solution to problems. If you have an issue and want expert support, get in touch.

---

Back to News and Insights

Related News and
Insights from Accura