What an APU is
A construction budget is built from work items. Each item has a quantity, such as 120 square metres of masonry, and a unit price, such as the price of one square metre. The unit price is not invented: it is calculated in an análisis de precios unitarios, or APU.
The APU answers the question “what does it cost to make one unit of this item?” by adding up everything needed to do it.
The components of an APU
| Component | What it covers | How it is expressed |
|---|---|---|
| Materials | Everything that becomes part of the work | Quantity per unit × price of the material |
| Labour | The crew that does the work, including the legal costs of employing them | Crew cost per day ÷ output per day |
| Equipment and tools | Machines and tools needed for the item | Cost per hour or per day ÷ output |
| Transport | Moving materials to the site | Quantity × cost of transport |
Adding these gives the direct cost of one unit.
The structure, illustrated
The following is a structure, not a price list. Numbers are omitted on purpose, because prices change and depend on the project.
| Line | Unit | Quantity per unit | Unit price | Subtotal |
|---|---|---|---|---|
| Material A | unit | … | … | … |
| Material B | unit | … | … | … |
| Labour (crew) | day | … | … | … |
| Equipment | day | … | … | … |
| Transport | trip | … | … | … |
| Direct cost per unit | sum |
From direct cost to the price you pay
To the direct cost of all the items, builders commonly add AIU: administration, unforeseen items (imprevistos) and profit (utilidad). The percentages should be written in the budget or in the contract. The sum of quantity × unit price for every item, plus AIU, gives the construction price.
How to read an APU
- Check the unit. Is the price per cubic metre, per square metre, per linear metre or per unit? A price is meaningless without its unit.
- Check the components. Are materials, labour, equipment and transport all present? A missing component is a cost that will appear later as an extra.
- Check the quantities of materials. Do they include reasonable waste? Are they consistent with the item’s specification?
- Check the labour. Is the output per day realistic for that work?
- Check what is not in it. Read the exclusions: what the price does not cover.
- Compare like with like. When you compare two budgets, compare the same item with the same specification.
Warning signs
- Prices without any analysis behind them.
- The same cost appearing in two items, or in an item and in the administration percentage.
- Items in the drawings that do not appear in the budget.
- Quantities that do not match the drawings.
- Very high or very low prices without an explanation.
- Unit prices that change from one item to another without a reason.
These are not proof of a problem, but each is a reason to ask a question.
Quantities matter as much as prices
Even perfect unit prices produce a wrong total if the quantities are wrong. The quantities of work (cantidades de obra) should be measured from the drawings, and they should be reviewed whenever the design changes.
What to do with this
When you receive a budget, ask for the APUs and the quantities that support it. If the contractor cannot or does not want to show them, that in itself is information. Our construction cost audit reviews quantities, APUs, indirect costs and payment terms, and it presents the result in COP, USD and EUR. To understand the whole budget, read construction costs in Colombia.