Standby Rates

Standby refers to the situation where equipment is on the job and available for work, but is not put into operation until needed. Under certain circumstances, for example during forced or legal standby, contractors may be entitled to payments for their equipment on standby. These payments are meant to reimburse the contractor for fixed costs such as depreciation, cost of facilities capital, and indirect equipment costs.

Standby Rates in the EquipmentWatch Cost Recovery Guide are by default the hourly cost associated with an asset on standby.

The hourly standby rate is calculated as:

Hourly depreciation cost + hourly cost of facilities capital + hourly indirect costs

Alternatively, the hourly cost can also be estimated using monthly costs and dividing by 176, the FHWA standard for equipment working hours available in a month.

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