Estimating in Building Construction

61

EQUIPMENT

CHAPTER EIGHT

8–1 General

One problem an estimator faces is the selection of equip-
ment suitable to use for a given project. The equipment must
pay for itself. Unless a piece of equipment will earn money
for the contractor, it should not be used.
Because it is impossible for contractors to own all types
and sizes of equipment, the selection of equipment will be
primarily from that which they own. However, new equip-
ment can be purchased if the cost can be justified. If the cost
of the equipment can be charged off to one project or written
off in combination with other proposed uses of the equip-
ment, the equipment will pay for itself and should be pur-
chased. For example, if a piece of equipment costing $15,000
will save $20,000 on a project, it should be purchased regard-
less of whether it will be used on future projects or whether it
can be sold at the end of the current project.
Figuring the cost of equipment required for a project
presents the same problems to estimators as figuring labor. It
is necessary for the estimator to decide what equipment is
required for each phase of the work and for what length of
time it will have to be used.
If the equipment is to be used for a time and then will not
be needed again for a few weeks, the estimator should ask the
following: What will be done with it? Will it be returned to the
main yard? Is there room to store it on the project? If rented,
will it be returned so that the rental charge will be saved?
Equipment that is required throughout the project is
included under equipment expenses, because it cannot be
charged to any particular item of work. This equipment
often includes the hoist towers and material-handling equip-
ment such as lift trucks and long-reach forklifts.
As the estimator does a takeoff of each item, all equip-
ment required should be listed so that the cost can be totaled
in the appropriate column.
Equipment required for one project only or equipment
that might be used infrequently may be purchased for the
one project and sold when it is no longer needed. In addition

to the operating costs, the difference between the purchase

price and the selling price would then be charged to the pro-

ject. Alternately, the equipment may be rented.

8–2 Operating Costs

The costs of operating the construction equipment should

be calculated on the basis of the working hour since the

ownership or rental cost is also a cost per hour. Included are

items such as fuel, grease, oil, electricity, miscellaneous sup-

plies, and repairs. Operators’ wages and mobilization costs

are not included in equipment operation costs.

Costs for power equipment are usually based on the

horsepower of the equipment. Generally, a gasoline engine

will use between 0.06 and 0.07 gallons of gasoline per horse-

power per hour when operating at full capacity. Fuel costs

are calculated using Formula 8-1. When operating, the

engine will probably operate at 55 to 80 percent of full

capacity, or 55 to 80 percent of its available power will be uti-

lized. This is known as power utilization and reduces fuel

consumption. In addition, it will not be operated for the full

hour. Typically, equipment is operated between 30 and 50

minutes per hour. This is known as the system efficiency or

use factor and is expressed as a percentage of the hour that

the equipment is operating. For example, 45 minutes per

hour would be 75 percent (0.75) and 50 minutes per hour

would be 83 percent (0.83).

Fuel Cost per Hour Formula 8-1

EXAMPLE 8-1 FUEL COST

What is the estimated fuel cost of a 120-horsepower payloader? A job

condition analysis indicates that the unit will operate about 45 min-

utes per hour (75 percent) at about 70 percent of its rated horsepower.

Consumption rateFuel cost

Fuel costhp ratingPower utilizationUse factor