How to price an asphalt overlay

The tonnage on an overlay is arithmetic. What goes wrong when you price an overlay is everything around it: the base repair nobody measured, the milling at the edges, the crew day that turned into a day and a half because the trucks couldn't keep up.

Build the price from the lot up, with your own numbers.

Start with the lot, not the square feet

Walk it before you price it. An overlay over a failed base is money lost, and the customer will blame the new asphalt.

Base failures: alligator cracking, soft spots, ruts. Mark them and measure them. They get cut out and patched before the overlay.
Edges and tie-ins: where the new mat meets curbs, drains, sidewalks, garage floors and the street. They usually need milling so the new surface sits flush.
Drainage: where the water goes now, and where it will go after you raise the surface.
Existing thickness and cracking you'll want to seal or address first.

Tons

Tons = square feet × (depth in inches ÷ 12) × 145 ÷ 2,000

For a 5,000 sq ft overlay at 2 inches compacted:

5,000 × (2 ÷ 12) = 833 cubic feet
833 × 145 = 120,833 lb
120,833 ÷ 2,000 = about 60 tons

Add your waste and handling allowance, based on what your plant tickets have shown against your estimates. Use the density on your plant's mix design sheet if it isn't 145.

Material cost = tons × your plant price for that mix, plus any small-load charge.

The rest of the direct costs

Milling. Full-width milling, or just the edges and tie-ins? Price the square feet and depth, the trucking to transport the millings, and what your plant pays or charges to take them.

Base repair. Each failed area: cut, remove, rebuild the base if needed, and patch. Price it by area and depth, separately from the overlay, so the customer sees it.

Tack. Square feet × your application rate × your tack price.

Crew and equipment days. This is where overlays are won and lost. Work it out from your own production:

How many tons does your crew lay in a day on a lot like this? Islands, hand work and tight corners slow it down.
Tons ÷ tons per day = crew days. Round up to the half day or day, the way you actually pay people.
Crew days × your crew's daily cost with burden.
Crew days × the daily cost of the paver, rollers and support equipment, owned or rented.

Trucking. Number of trucks for the transport distance and the crew's pace, times the hours.

Equipment transport and setup. Getting the paver and rollers there and back. On a small job this can be a big share of the price.

Traffic control, permits and striping if they're part of the job.

Margin, then the price

Add up the direct costs. Then set the margin you need to cover your overhead and make a profit.

Price = total cost ÷ (1 − margin)

Say the direct costs on the 5,000 sq ft lot come to $12,000 and you need a 30% margin: $12,000 ÷ 0.70 = $17,143. Markup and margin aren't the same number. A 30% markup on $12,000 is $15,600, which is only a 23% margin.

Compare the result to what you know the market pays. If you go under your number, make it a decision, not an accident.

Present it so it holds up

Show the base repair, milling, overlay and striping as separate lines.
Give the compacted depth and the mix on the proposal.
Add unit prices for the things that grow on site, like extra base repair per square foot. When you find more, the change order already has its price.
Put an expiration date on it. Plant prices move.

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How to price an asphalt overlay: tons, crew days and the margin you need