What Is a Schedule of Rates (SOR)?

A well-prepared SOR covers every category of work a contractor might be called on to perform under the arrangement, priced clearly enough that a call-off job can be costed the moment it is identified.

• Item description and unit of measure — square metres, cubic metres, lineal metres, tonnes, hours or item — for each type of work covered.
• The tendered or agreed unit rate for each item, built up from labour, material and plant cost plus overheads and margin.
• An indicative or estimated quantity for some items, included only to help compare tenders — not a binding commitment on either party.
• Day work or hourly labour and plant rates, used for any work that falls outside the scheduled items.
• Rise and fall (escalation) provisions, where rates are adjusted at set intervals over a multi-year term contract.

An SOR is the standard pricing tool wherever a client needs a contractor on tap without knowing in advance exactly how much work will be required, or where a larger job’s true quantities can only be confirmed once construction is under way.

• Term maintenance contracts — a council or facilities manager engages one contractor at agreed rates for repairs and small works over a fixed period, often one to three years.
• Panel arrangements — several contractors are pre-approved at agreed rates, and each job is called off to whichever panel member suits the work.
• Remeasurement contracts — larger civil or infrastructure works are priced against a schedule of rates, with final payment based on quantities measured once the work is actually built.
• Emergency and reactive works — where the nature of the job can’t be scoped until a contractor is on site, an SOR gives a pre-agreed basis for pricing it immediately.

Each rate in an SOR is built up the same way an estimator builds up any unit rate — labour, materials, plant and a share of overheads and margin — but priced to remain workable for the life of the arrangement rather than for a single job. Payment then follows a simple mechanism: the work actually completed in a period is measured, and the quantity is multiplied by the agreed rate to arrive at the amount due.

That measurement step is what makes an SOR fair to both sides — the contractor is paid for exactly what was done, and the client only pays for work it actually received, without either party needing to renegotiate a price every time a job comes up.

A client — often a council, government agency or facilities manager — or their quantity surveyor issues an SOR tender whenever the scope of work isn’t known far enough in advance to fix a total price. Contractors tender by pricing the listed items, and the successful tenderer’s rates become the schedule for the life of the term contract or panel arrangement.

On the contractor’s side, an estimator builds up each rate the same way they’d build a Bill of Quantities rate, but with an extra consideration: the rate has to hold up for the life of the contract, sometimes several years, so future cost movement and escalation matter more here than on a single, quickly-delivered job.

An SOR is easy to confuse with other pricing documents that also involve rates or unit costs, so it helps to be precise about what fixes what:

• Schedule of rates vs Bill of Quantities — a BOQ carries both a description and a firm, measured quantity for every item, so multiplying by the rate gives a real total price; an SOR carries only the rate, so the total is unknown until the work is measured.
• Schedule of rates vs lump sum contract — a lump sum contract commits to one fixed total price for a defined scope; an SOR commits only to unit rates, with the final amount depending on how much work is actually ordered.
• Schedule of rates vs provisional quantity — a provisional quantity is an estimated amount attached to one item within an otherwise measured contract, subject to remeasurement; an SOR has no fixed quantities across the whole schedule by design.

A schedule of rates suits both sides of a job with genuinely uncertain scope, but it shifts risk differently than a fixed-price contract, and both parties should go in with their eyes open about what that means.

• For the client — pay only for work actually needed, without committing to a full scope or total spend upfront.
• For the contractor — a term contract can be a stable, low-risk revenue stream, but total earnings depend entirely on how much work is actually called off.
• Shared risk — because there is no fixed total, both parties need accurate measurement and record-keeping to agree what is owed each period.
• Escalation risk — a rate agreed at the start of a multi-year contract can become unprofitable if costs rise faster than any rise-and-fall provision allows.

Most SOR problems trace back to how the rates were set or recorded, rather than a genuine dispute about the work itself.

• Pricing rates without allowing for escalation over a multi-year term, so margins quietly erode as material and labour costs rise.
• Leaving day work and out-of-scope rates blank or vague, so ad-hoc work becomes a pricing argument every time it arises.
• Not keeping detailed as-built measurement records, making it hard to substantiate a progress claim under an SOR.
• Assuming a schedule of rates guarantees a certain volume of work, when most term contracts explicitly do not.