Equipment Rates

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Equipment Rates

• CEE 474 Engineering Project Management

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Corps of Engineers Tech Info

• http//www.hnd.usace.army.mil/techinfo/engpubs.htm
  
• Engineer Publications
• Engineer Manuals (EM 1110-x-xxxx)
• Design Guides
• Engineering and Technical Instructions
• Technical Manuals (TM-5-xxx)

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Website

• Region IV
• http//www.usace.army.mil/publications/eng-pamphle
  ts/ep1110-1-828vol429/toc.htm
• All Regions (and other EPs)
• http//www.usace.army.mil/publications/eng-pamphle
  ts/ep.htm

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EP 1110-1-8

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Required in Federal Contracts

• Federal Acquisition Regulation (FAR)
  31.105(d)(2)(i)(B)
• (B) Predetermined schedules of construction
  equipment use rates (e.g., the Construction
  Equipment Ownership and Operating Expense
  Schedule, published by the U.S. Army  Corps of
  Engineers  , industry sponsored construction
  equipment cost guides, or commercially published
  schedules of construction equipment use cost)
  provide average ownership and operating rates for
  construction equipment. The allowance for
  operating costs may include costs for such items
  as fuel, filters, oil, and grease servicing,
  repairs, and maintenance and tire wear and
  repair. Costs of labor, mobilization,
  demobilization, overhead, and profit are
  generally not reflected in schedules, and
  separate consideration may be necessary.

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Regions
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Area Factors

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Basis of Hourly Rates

• The hourly rates shown in table 2-1 reflect
  catalog list prices of equipment manufactured in
  2004 (3 years old). List prices for equipment
  manufactured in years other than 2004 have been
  adjusted to a 2004 price level using economic
  indexes. Ownership and operating expenses are
  computed using area factors, found in appendix B,
  which are specific to each region and volume.
  This hourly rate methodology assumes that
  equipment furnished to the job is in sound,
  workable condition. Furthermore, the methodology
  applies only to equipment that prime contractors
  or subcontractors either own or control. These
  hourly rates and cost factors do not represent
  rental charges for those in the business of
  renting equipment.

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Trucks

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Link-Belt HC-238H II

• Crane, Mechanical, Lattice Boom, Truck Mounted

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Table 2-1 Headings

• CAT C90 is the category number and identifies
  it as Cranes, Mechanical, Lattice Boom, Truck
  Mounted (from appendix D).
• ID No. C90LB001 is the unique identification
  number for the above Link Belt crane. AM equals
  the manufacturer (see appendix H). 001 equals the
  numeric order of this unit of equipment within
  the manufacturers listing.

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Table 2-1 Headings

• MODEL HC-238H II is the equipment model number.
• EQUIPMENT DESCRIPTION Specific information for
  each particular unit of equipment is described,
  such as 150 ton with a 260-foot boom for the
  Link Belt crane.
• ENGINE HORSEPOWER AND FUEL TYPE The amount of
  horsepower and type of fuel used is stated for
  the main and carrier engines. The Link Belt crane
  carrier has a 430-horsepower engine, and the
  crane has a 207-horsepower engine. Both engines
  are diesel (D).

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Table 2-1 Headings

• VALUE (TEV) This column reflects the
  predetermined equipment cost used to compute
  the rates and is based on equipment purchased new
  in 2004.
• TOTAL HOURLY RATES (/HR) All ownership and
  operating expenses for the average condition are
  included. All cost elements, including fuel, are
  totaled in the AVERAGE column. The STANDBY column
  includes the hourly allowance for equipment on
  legitimate standby status (see section 2-27 for
  more information).

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Hourly Rate Elements

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Table 2-1 Headings

• ADJUSTABLE ELEMENTS This column shows ownership
  elements and fuel costs used to develop the
  average total hourly rates so they can be
  adjusted as indicated in chapter 3. Operating
  costs may be determined by subtracting the
  ownership cost elements (DEPR plus FCCM) from the
  total hourly rate for the average condition.
• CWT The shipping weight of the equipment is
  stated in hundredweight.

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Operating Costs

• 2.22 Operating Cost Elements
• The total operating cost is the sum of the
  following five elements fuel, FOG, repairs, tire
  wear, and tire repair.
• FOG Filters, Oil, Grease

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Depreciation

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FCCM

• FAR 31.205-10 -- Cost of Money.
• (a) General. Cost of money--
• (1) Is an imputed cost that is not a form of
  interest on borrowings (see 31.205-20)
• (2) Is an incurred cost for cost-reimbursement
  purposes under applicable cost-reimbursement
  contracts and for progress payment purposes under
  fixed-price contracts and
• (3) Refers to
• (i) Facilities capital cost of money (48 CFR
  9904.414) and
• (ii) Cost of money as an element of the cost of
  capital assets under construction (48 CFR
  9904.417).
• (b) Cost of money is allowable, provided--
• (1) It is measured, assigned, and allocated to
  contracts in accordance with 48 CFR 9904.414 or
  measured and added to the cost of capital assets
  under construction in accordance with 48 CFR
  9904.417, as applicable
• (2) The requirements of 31.205-52, which limit
  the allowability of cost of money, are followed
  and
• (3) The estimated facilities capital cost of
  money is specifically identified and proposed in
  cost proposals relating to the contract under
  which the cost is to be claimed.
• (c) Actual interest cost in lieu of the
  calculated imputed cost of money is unallowable.

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FCCM (another definition)

• As contractor management considers investment
  opportunities, they must consider the cost of
  capital required to make each investment and the
  potential return from that investment. To attract
  investment, the prospective return on investment
  generally must be higher than the cost of capital
  required to make the investment. Thus, the cost
  of capital is a real cost that effects investment
  decisions. Unfortunately, the cost of capital is
  not the same for all sources (e.g., owner's
  equity and long-term loans), all firms, or all
  periods of time.
•     The purpose of facilities capital cost of
  money criteria is to improve contractor cost
  measurement by providing for allocation of the
  cost of contractor investment in facilities to
  negotiated contracts. To assure uniform
  consideration, the criteria require use of the
  current Treasury-determined cost of money rate
  for all firms and all facility investments.

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Standby Rate

• 2.28 Standby Hourly Rate
• The standby rate is computed by allowing the full
  FCCM hourly cost (based on a 40 hour workweek)
  plus one-half of the hourly depreciation. It is
  expressed as a formula, as follows
• Standby Rate/hr (DEPR/hr x 0.50) FCCM/hr
• a. Paid standby shall not exceed 40 hours per
  week (7 calendar days) (based on a 40 hour
  workweek) per unit of equipment. Actual operating
  hours during a week will be credited against the
  40 hours maximum standby allowance.
• b. Standby costs will not be allowed during
  periods when the equipment would have otherwise
  been in idle status.