Annual Use Hours are the average number of hours per year that a machine performs work as determined by surveying equipment owners.

An API, or application programming interface, is a data delivery mechanism that allows for data from one source (EquipmentWatch in this case) to be embedded into the application of a third party. The major benefit to APIs are the following: Workflow efficiency gains Derivative products The EquipmentWatch API, specifically, is an API composed of the […]

Cost of Facilities Capital (CFC), which is not the same as interest charges, addresses the cost of money invested, whether the machinery is purchased with cash or financed.

The Cost Reference Guide is a former EquipmentWatch publication that served as a guide to ownership and operating costs for construction equipment manufactured within the past five years.

The Custom Cost Evaluator is now known as the EquipmentWatch Internal Charge Rate Calculator.

In general terms, depreciation is the loss of fair market value of an asset over time, usually as a result of wear and tear.

Discount refers to the percent off from list price experienced by the equipment buyer. Including discount as an ownership factor will result in more accurate internal charge rate calculation.

Economic Life Hours reflect the average economically productive life of a machine used under average conditions with normal repairs and maintenance.

Equipment overhead costs include the direct costs of normal risk insurance and property taxes along with the indirect costs of storage, security, mechanics supervision, inspection, licenses, and record keeping.

The ownership costs of depreciation, indirect costs, cost of facilities capital, and major overhaul are annualized and then adjusted to reflect the average annual working season to obtain a monthly rate, from which weekly, daily and hourly rates are derived. The FHWA Hourly Ownership Rate in-particular is determined by taking the monthly ownership rate/176.

The FHWA (Federal Highway Administration) has approved the use of Rental Rate Blue Book on federally funded projects. The most common application is in force account work and for federally funded projects. FHWA (Federal Highway Administration) has limited their participation in matching funds with state highway agencies (using Rental Rate Blue Book) to the monthly […]

Equipment field repair is a segment of operating cost defined as routine, daily servicing of the equipment and would include repairing, replacing or adjusting small components such as pumps, carburetors, injectors, batteries, filters, belts, gaskets, and hoses.

Field repair labor costs are accrued on a machine working-hour basis to offset charges incurred to perform normal field repair and maintenance.

Field repair parts costs are accrued on a machine working-hour basis to offset the costs for supplying parts necessary to keep the equipment operating in good condition.

F.O.B. (Free on Board) refers to the practice by which the supplier pays shipping costs from the place of manufacture to a specified destination where the legal title then transfers to the purchaser.

Freight refers to the transportation cost from factory to Owner’s yard in total dollars.

Average cost of fuel in $/gallon or electricity in $/kWh.

Ground Engaging Components Cost include repair and/or replacement, either in whole or part, of ground engaging components such as pads, drums, teeth and cutting edges. 

Hourly Estimated Cost include the cost of labor and parts needed for routine, daily servicing of the equipment.

Idling rates refer to any instance in which a piece of equipment is located on a jobsite and the engine is burning fuel, but no ground engaging or other components are actively engaged in meaningful work. Idling Rates in the EquipmentWatch Cost Recovery Guide are by default the hourly cost associated with an asset idling. […]

Indirect equipment costs consist mostly of overhead costs such as normal risk insurance and property taxes along with storage, security, mechanics supervision, inspection, licenses, and record keeping.

The list price represents the manufacturer suggested price for a complete working machine F.O.B. factory.

Lubrication includes the costs of oils, grease, coolants and filters. Labor and ancillary equipment involved in servicing is also included.

The Mechanic’s Wage is the hourly rate paid for labor including fringe benefits.

Miscellaneous Supply parts are those items normally stocked in bulk for an entire fleet, rather than for individual machines.

No industry standard exists regarding the handling of fixed Ownership costs in computation of overtime rates.

The Operating Rate is the cost to operate an asset per hour.

Overhaul reflects costs necessary to keep a machine functional throughout its economic life: the periodic rebuilding of engines, transmissions, undercarriages, hydraulic pumps, cylinders and other major components.

Overhaul parts costs are accrued for each machine working-hour to offset costs incurred for periodic replacing, rebuilding and reconditioning of major components, such as engines, transmission, undercarriages, etc.

Overhaul labor is accrued for each machine working-hour to offset charges incurred to replace, rebuild and recondition major components and are to be included whether repair is performed in the contractor’s maintenance facility or at an outside shop.

Primary Engine Power Consumption is calculated using average load factors, equipment horsepower, and the price of fuel per gallon. Actual fuel consumption will depend on variations in load factors, elevation, engine performance, operator efficiency, and terrain.

A proprietary EquipmentWatch metric that answers the key equipment manager question: for any given project, should I used an owned asset or a rented asset?

Resale value is the current fair market value of a piece of equipment expressed in total dollars.

Sales tax refers to a compulsory contribution to state revenue imposed by the government a the point of sale on goods and services.

Fuel costs are included for machines that have dual engines or are truck mounted.

Standy refers to the period during which equipment is assigned to a job and available for work, but is not put into operation until needed.

Standby refers to the situation where equipment is on the job and available for work, but is not put into operation until needed.

Tire costs include the repair and/or replacement of tires.

Tire Life is the expected life in hours of a new set of tires, based on severity of application.