Construction Division Memorandum

CONSTRUCTION DIVISION MEMORANDUM
GENERAL SUBJECT: FORCE ACCOUNTS EQUIPMENT	NUMBER: CD-94-18
SPECIFIC SUBJECT: STANDBY TIME	DATE: DECEMBER 15, 1994
	Original w/Signature on file in Construction Division
	C. F. GEE
	CONSTRUCTION ENGINEER
DIRECTED TO - DISTRICT ADMINISTRATORS
In accordance with Section 109.05 (d) of the Specifications, equipment "held in ready" for force account work will be paid at 50 percent of the hourly rental rate for equipment in use. This method is used in lieu of using the Contractor's actual standby costs. Also, FHWA allows payment of 50 percent of the published ownership rates as listed in the Blue Book.
Contractors do incur the cost of ownership for equipment whether it is in use or not. Ownership of equipment not only consists of initial cost of equipment and depreciation but indirect costs as well. Indirect costs include, but are not limited to; risk insurance, property taxes, storage, licenses, record keeping, security and mechanic's supervision. Therefore, the determination of whether or not equipment is "held in ready" for a force account should be made as accurately as possible.
"Held in ready" (standby) means that the equipment necessary for the prosecution of the force account is not currently "in use" but is on site and will be used (to any extent) in the next 24 hours. There may be exceptions to the 24 hour criteria for large equipment or specialized equipment where it is not practical or it is not standard industry practice to move the equipment on and off the force account site for use in other work.
It is the intent of VDOT to pay reasonable prices for force account work and, at the same time, be sure the Contractor is properly compensated for the resources he has provided for the work. Please be guided by the above "held in ready" criteria when determining standby time on your force accounts.
Your cooperation is appreciated.

DWN:er