Equipment

As already stated, the development of unit prices for construction equipment is complicated by following two factors : 

• there are so many types of equipment from which to choose, and 
• there are so many ways to calculate the probable cost of owning and operating any selected piece of equipment. 

Nevertheless, there are some general aspects of cost that apply to most pieces of construction equipment, with minimal modification. These are presented below under the four headings, namely owning, operating, operator and mobilization costs. 

Owning Costs 

The steps to calculate the hourly owning costs of a piece of construction equipment are as follows : 

1. Find the total delivered price, including attachments and investment costs, such as interest and inflation. 
2. Deduct the cost of all items that will be replaced during the expected life of the machine. 
3. Deduct the estimated salvage value at the end of anticipated useful life of the machine. 
4. Divide the residual cost by the number of years of life expectancy to find the annual cost. 
5. Add all other annual costs, such as permits, storage, insurance, inflation, and the like. 
6. Divisible the total annual cost by-the estimated number of hours of predicted mud use to find the hourly owning cost. 

Note that inflation can be included in either item (1) or item (6). 

Operating Costs 

The steps to calculate the hourly operating costs of a piece of construction equipment are as follows : 

1. Find the annual costs of fuel, lubricants, grease, and other consumable items using data provided by the manufacturer. 
2. Calculate the replacement cost of all replaceable items by dividing replacement cost by anticipated annual life of the items. 
3. Include the manufacturer's recommendations for probable repairs, usually as a percentage of cost. 
4. Divide the total annual operating cost by the estimated number of hours of anticipated use to find the hourly cost. 

Operator Costs 

The steps to calculate the hourly operator costs of a piece of construction equipment are as follows : 

1. Find the equipment operator's costs as already explained in the section dealing with labour cost. 
2. Similarly, find the costs of any support personnel, such as helpers, cleaners. 
3. If the operators do no work other than to operate the equipment, the total annual labour costs are divided by the anticipated hours of use to find the hourly cost. 
4. If the operators do other work, besides operating the machine, only the hours spent on operating the machine should be included in the calculation. 

Mobilization Costs 

The steps to calculate the hourly equivalent cost of the intermittent mobilisation process are as follows : 

1. Find the number of hours to be used transporting the piece of equipment from the storage to the site and back to storage. 
2. Find the hourly cost of transportation of the equipment together with any other vehicles involved in the move. 
3. Find the number of hours the piece of equipment will be located at the site, whether in use or not. 
4. Divide the cost of transportation by the number of hours at the site to find the hourly mobilisation cost. 

The hourly costs, each calculated in the manner described above, can now be added together to produce a price per unit of time for a given piece of equipment. That price can now be converted to a price per unit of measurement, such as cubic meters or other appropriate unit, by dividing the hourly cost by the equipment productivity rate. An allowance for overhead and profit still has to be added, either to each individual unit price or to the estimate as a whole.