EP 1110-1-8
(Vol. 1)
31 July 03
CHAPTER 2 METHODOLOGY FOR CONSTRUCTION EQUIPMENT
SECTION I. GENERAL
2.1
Contents
This chapter provides the methodology used to compute the total hourly
ownership and operating rates for construction equipment and marine equipment
(except dredging plant). This detailed methodology includes the formulas and factors
used to develop both total hourly rates and hourly standby rates. If the equipment is
determined to be older than its estimated economic life (overage) or was purchased
used, refer to chapter 3.
2.2
Basis for Equipment Rates
The hourly rates shown in table 2-1 reflect catalog list prices of equipment
manufactured in 2000 (3 years old). List prices for equipment manufactured in years
other than 2000 have been adjusted to 2000 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.
2.3
Total Hourly Rate
Hourly rates for average conditions are shown in table 2-1 and are computed
based on a 40-hour (hr) workweek. The hourly rate is the sum of ownership and
operating costs. Table 2-2 contains all individual rate elements for both average and
severe conditions. An example of the methodology used to compute the total hourly
rate is shown in figure 2-1. For standby calculation, see section IX.
a. Ownership Cost Elements. The ownership portion of the rate consists of an
allowance for depreciation (DEPR) and facilities capital cost of money (FCCM).
b.
Operating Cost Elements. Operating costs include allowances for the
following:
Fuel
Filters, oil, and grease (FOG) (includes servicing)
Repairs (includes maintenance and major overhauls)
Tire wear (replacement)
Tire repair
c. Exclusions to Hourly Rates. Total hourly rates for owning and operating
equipment do not include allowances for the following:
2-1
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