EP 1110-1-8
(Vol. 11)
31 July 03
SECTION II. RATE ADJUSTMENTS
3.5
Rate Adjustments
The ownership and/or the operating portion of the hourly rates and standby
hourly rates shall be adjusted whenever one or more of the following rate adjustment
conditions exist (rate adjustments are explained in detail in the following paragraphs).
Changes in operating conditions
Changes in Cost of Money Rate
Actual work hours (hrs) exceed 40 hr per week (wk)
Changes in FUEL cost
Adjustments to FOG cost
Equipment of different age than table 2-1
Rate adjustment for overage equipment
Rate adjustment for overage equipment standby
There are no rate adjustments for appendix B factors except for fuel cost
(electric, gas, diesel off-road, and diesel on-road) and the Cost of Money Rate. Also,
there are no rate adjustments for repairs, tire wear, or tire repair.
3.6
Changes in Operating Conditions
If difficult or severe conditions are justified by the Contracting Officer, selection
or calculation of the appropriate rate is necessary. See chapter 2, section II, for
definition of average, difficult, or severe conditions and determination of condition.
3.7
Change in Cost of Money Rate (CMR)
The Department of the Treasury adjusts the CMR (Prompt Payment Interest
Rate) on or about 1 January and 1 July each year; these revisions are printed in the
Federal Register. The Internet address for Prompt Payment Interest Rate is
If the CMR shown in chapter 2, section VII, is not the current rate, the FCCM
portion of the total hourly rate shall be adjusted upward or downward to match the CMR
for the period of equipment use. See appendix I for a listing of historical CMRs. The
total hourly rate adjusted for a differing CMR is computed by the formula:
(NEW CMR)]
Total Hourly Rate = DEPR/hr + [(FCCM/hr) x
+ Operating Costs/hr
(Old CMR)
Example: Assume that table 2-1 includes a crane [category (CAT) C80,
subcategory (SUB) 0.02] with hourly costs as shown in the following example. The
CMR has increased from 5.00 percent to a current rate of 6.00 percent (increase of 20
percent). The total hourly rate for this piece of equipment is determined as follows:
3-2
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