An owner's estimate for AC installation that is too low leads to failed tenders or quietly reduced work on site. One that is too high is hard to defend in an audit. Both usually have the same cause: unit prices taken from a single quote or last year's figures, without any analysis.
This article is for procurement officers (PPK) and design consultants preparing the owner's estimate (HPS) or budget (RAB) for split, cassette or VRV air conditioning in government buildings in Indonesia. The short answer: take quantities from the drawings, build a unit price analysis per item, add indirect costs of 10% to 15%, enter construction safety (SMKK) as its own item, then add VAT.
An HPS for AC installation is the price estimate the procurement officer sets for an AC work package, including indirect costs, profit and VAT. For public works construction, the calculation guideline is Minister of Public Works Regulation 8 of 2023, which replaced Regulation 1 of 2022 on 30 August 2023.
What is the difference between HPS, RAB and HPP?
HPS, RAB and HPP use the same method but are prepared by different parties at different stages. All three are built on unit price analysis (AHSP).
| Term | Prepared by | Used for |
|---|---|---|
| HPP (designer's estimate) | Design consultant | Cost estimate at the design stage |
| RAB (budget plan) | Consultant or agency | Proposing and setting the budget |
| HPS (owner's estimate) | Procurement officer (PPK) | Upper limit for acceptable bids and a check on price reasonableness |
Regulation 8 of 2023 defines the HPS as a price estimate prepared or set by the procurement officer that accounts for indirect costs, profit and VAT. The HPS total is rounded down.
Which regulations apply to an AC installation estimate?
An AC installation estimate refers to procurement rules and the construction cost guideline. For the technical specification side, see our article on AC technical specifications for government procurement.
| Regulation | Key provision for an AC estimate |
|---|---|
| Presidential Regulation 16/2018, amended by 12/2021 and 46/2025 | The HPS is set by the procurement officer, calculated with expertise and defensible data |
| Regulation 8 of 2023, Article 11 | Indirect costs (overhead and profit) are 10% to 15% of direct costs |
| Regulation 8 of 2023, Article 17 | How to build unit prices when the required AHSP item is not available |
| Regulation 8 of 2023, Article 22 | SMKK costs are separate and not part of general overhead |
Regulatory status can change. Check the Ministry of Public Works legal database (JDIH PU) and the latest circulars from the Directorate General of Construction before setting the HPS.
How is a unit price analysis for AC installation structured?
A unit price analysis for AC installation follows the AHSP format: labour, materials and equipment add up to direct cost, then indirect cost is added. The general format:
| Code | Component | Example content for AC installation |
|---|---|---|
| A | Labour | AC technician, assistant, foreman |
| B | Materials | Copper pipe, insulation, power and control cable, drain pipe, brackets, additional refrigerant, nitrogen, brazing material |
| C | Equipment | Vacuum pump, manifold gauge, brazing kit, clamp meter, scaffold or ladder |
| D | Total direct cost | A + B + C |
| E | Overhead and profit | 10% to 15% x D |
| F | Unit price | D + E |
Labour and material coefficients per unit of work should come from the official AHSP where available. If the AC installation item you need is not in the AHSP for its work group, Article 17 of Regulation 8 of 2023 gives three options: AHSP from another work group, an SNI-based reference, or a technical and productivity analysis based on engineering practice.
Where should base prices come from?
Base prices must come from defensible sources, preferably more than one. Common sources:
- The government e-catalogue, for AC units and materials listed there.
- Official manufacturer or distributor price lists.
- A documented market survey at the project location.
- Standard unit prices set by the local government, where available.
- Contract prices from similar completed work, adjusted for time and location.
Record the source and date of every price in the HPS appendix. That trail is what auditors ask for.
Steps to prepare an HPS or RAB for AC installation
An AC installation HPS is built in seven steps, from cooling demand to the summary sheet. The order:
- Calculate the cooling load per room and choose the unit type and number.
- Take quantities for each item from the working drawings: units, pipe length per diameter, cable length, drain length, brackets. A BIM MEP model makes this step traceable.
- Build a unit price analysis for each work item.
- Fill in base prices for labour, materials and equipment from recorded sources.
- Add overhead and profit of 10% to 15% of direct cost in each analysis.
- Prepare SMKK costs as a separate item, based on the construction safety plan.
- Multiply quantities by unit prices, total them, add VAT on the summary sheet, then round down.
Which items are often missing from an AC installation budget?
The items most often missed are supporting works outside the AC units themselves. When they are not in the budget, they usually return as variation orders.
| Item | Why it gets missed |
|---|---|
| Pipe beyond the standard length | Unit packages only include short pipe runs |
| Additional refrigerant for VRV | The amount depends on the total pipe length |
| Outdoor unit mounts and steel frames | Depends on roof or wall conditions |
| Electrical work and panels | Often treated as a separate electrical package |
| Wall chasing, openings and making good | Not visible on the AC drawings |
| Lifting units to the roof | Large units need lifting equipment |
| Commissioning, as-built drawings and training | Assumed to be included without being written |
A fuller list of cost drivers is in our article on central AC installation cost.
Conclusion
A sound HPS or budget for AC installation can be traced from drawing quantities, through unit price analysis, to the source of each base price. The anchor is Regulation 8 of 2023: indirect costs of 10% to 15% of direct cost, SMKK as a separate item, and VAT on the summary.
SOKANTARA is an HVAC, VRV/VRF and MEP contractor with its head office in Medan, serving projects across Indonesia. We build the BOQ from a BIM model so pipe, cable and unit quantities can be checked line by line, then deliver VRV/VRF installation through to commissioning. If you are preparing an HPS or budget, contact our team.
Frequently asked questions
What percentage is allowed for overhead and profit in a construction HPS?
Under Article 11 of Minister of Public Works Regulation 8 of 2023, indirect costs, made up of general overhead and profit, are 10% to 15% of direct costs.
Can SMKK costs be included in overhead?
SMKK costs cannot be included in overhead. Article 22 of Regulation 8 of 2023 states that construction safety (SMKK) costs are a separate cost from general overhead and are entered as their own work item.
What if AC installation is not in the PUPR unit price analysis?
Article 17 of Regulation 8 of 2023 allows using unit price analysis from another work group, an SNI-based reference, or a technical and productivity analysis based on engineering practice.
Is Regulation 1 of 2022 still valid?
Minister of Public Works Regulation 1 of 2022 is no longer valid. It was revoked and replaced by Regulation 8 of 2023, in force since 30 August 2023.
