![]() The use of a standby rate is appropriate when equipment has been ordered to be available for force account work but is idle for reasons which are not the fault of the contractor. To allow an equitable compensation, standby rates which fairly reimburse the contractor for the expenses of owning the equipment may be approved for Federal-aid participation. The contractor continues to incur certain ownership costs when equipment is required to be standby. Specifically why the monthly rate should be divided by 176 to obtain the hourly rate and how reduced construction seasons are addressed. These include the use of standby equipment rental rates, the use of equipment the contractor obtains through a third party rental agreement, and the eligibility of mobilization costs associated with the use of misunderstanding on how the Blue Book is developed. Several issues not covered in earlier guidance memorandums have been raised. The principle of equipment rental rate guides for contractor owned equipment is that they should fairly represent the contractor's actual cost of owning and operating equipment. ![]() Weseman's memorandum of January 27, 1988, (copies attached). Gendell's memorandums of August 22, 1986, October 30, 1986, and December 23, 1986, and Mr. Previous memorandums have addressed FHWA's policy concerning the acceptability and use of equipment rental rate guides for contractor owned equipment. Chief, Construction and Maintenance Division
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