Development of Equipment Rental Schedule for Illinois

During highway construction, the Illinois Department of Transportation (IDOT) resident engineer commonly adds “extra work” to the contract as needed for satisfactory completion of the project. One of the formats for contractor reimbursement requires establishing an hourly compensation rate for contractor-owned equipment used to perform the extra work and similar equipment owned by local agencies eligible for Motor Fuel Tax funding. Construction equipment rental rates vary widely according to factors, including equipment age, type, overhaul labor and parts, field labor and parts, capacity, estimated operating costs, availability, the geographic and climatic conditions at the job site, etc. It is critical that each highway agency, including IDOT, establish specific policies and standard guidelines to deal with construction equipment reimbursement in force account work in a fair manner to contractors. This project develops a comprehensive equipment rate schedule model to establish hourly compensation rates for contractor-owned equipment used in performing extra work. The model incorporates ownership costs—such as depreciation, overhead, and overhaul costs—and operating costs, including fuel, tire, and lubrication expenses. A methodology for annual rate updates is also developed. Additionally, the project delivers a user-friendly, web-based tool that can be operated and maintained by IDOT.